Chapter 16 Sales Promotion

Chapter 16 Sales Promotion - C hapter 16 Sales P romotion...

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Chapter 16 Sales Promotion Sales Promotion Sales promotion is an inducement or incentive to the sales force, distributors, or ultimate customer with the primary objective of creating immediate sales. There are three important aspects of sales promotion: An extra incentive to buy, such as coupons, rebates, and premiums provide extra reason to buy Acceleration tools to speed up sales and shorten the purchase cycle Targeting different consumers or businesses Sales Promotion Vehicles Sales promotion can be broken into two major categories, consumer-oriented and trade- oriented. This slide shows the types of activities related to each. Consumer-oriented promotion includes such things as samples, coupons, premiums, contests, sweepstakes, refunds and rebates, bonus packs, price-off deals, frequency programs, and event marketing. Trade-oriented promotion includes such things as contests and dealer incentives, trade allowances, point-of-purchase displays, training programs, trade shows, and cooperative advertising. Consumer-oriented promotions are generally used as part of a push channel strategy , while trade-oriented promotions are part of a pull strategy . Media Delivers a Promotion Message This slide shows a print ad for the Chevy Avalanche truck that promotes the "Outdoor Adventure Sweepstakes." A significant amount of the money that marketers allocate to media advertising is spent on ads that promote contests, games, sweepstakes, rebates, and other promotional offers. Sales Promotion Increases
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This slide summarizes the reasons for the growth in sales promotion, including: The growing power of retailers . Manufacturers used to have most of the power, now retailers through technology, consolidation, and private labeling have more. Declining brand loyalty . Consumers are basing more purchases on price and value. Increased promotional sensitivity . Consumers want to save money and respond well to promotions that give them the opportunity to do so. Brand proliferation . Many new brands offer little differentiation. Fragmentation of consumer markets . Traditional mass media advertising has become less effective and promotions are a way to reach market segments. Short-term focus . Sales promotion is a way to generate an immediate increase in sales. Increased accountability . Managers are under pressure to produce sales results. Competition . Promotions are seen as way to gain a competitive advantage. Clutter . Promotional offers can break through the clutter and attract attention. Another reason for the increase in spending is that the promotion industry has become more sophisticated and plays a more strategic role in the IMC program of many companies. Franchise-Building Promotions Consumer franchise-building promotions communicate distinctive brand attributes, contribute to the development and reinforcement of brand identity, and build long-term brand preferences through: Frequency programs that encourage repeat purchases Contests and sweepstakes that increase involvement with the brand and help build equity, and Premium offers
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