Chapter 17 - Chapter 17 Sales Promotion Point-of-Purchase...

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Chapter 17 -- Sales Promotion, Point-of-Purchase Advertising, and Support Media (5e) 563-4 sales promotion definition and intent; three types of sales promotion; role of sales promo is to elicit an immediate purchase Sales promotion- the use of incentive techniques that create a perception of greater brand value among consumers, the trade, and business buyers. Intent= to make things happen in a hurry (elicit an immediate purchase) 3 Types: Consumer-market- incentives that induce household consumers to purchase a firm’s brand rather that a competitor’s brand Trade-market-ways of motivating distributors, wholesalers, and retailers to stock and feature a firm’s brand in their store merchandising program. Business-market- designed to cultivate buyers in large corporations who are making purchase de- cisions about a wide range of products including computers, office supplies, and consulting services. !564 Ex. 17.3 -- contrast of 5 purposes of sales promotion versus advertising Purpose of Sales Promo Purpose of Advertising Stimulate short-term demand Cultivate long-term demand Encourage brand switching Encourage brand loyalty Induce trial use Encourage repeat purchases Promote price orientation Promote image/feature orientation Obtain immediate, often measur- able results Obtain long-term effects, often difficult to measure 565 as a %age increase year-to-year, sales promo has been growing at about double adv. as big consumer product firms (e.g., P&G) shift dollars out of adv. and into sales promo Sales promo= 4-8% increase annually Advertising= 3-5% increase annually Sales promo spending in US exceed $300 billion annually Big firms sifting $’s away from media advertising and into promotions !565-8 six reasons for shift away from mass media advertising to sales promotion (these trends capture much about marketing in the U.S. today) Demand for Greater Accountability Companies demanding greater accountability across all functions: marketing, advertising and promo- tions Immediate effects that sales promotions has is easier to document Studies show only 18% TV ad campaigns produced short-term positive return on investment of pro- motional dollars Point-of-purchase in store displays have shown to positively affect sales by as much as 35% in some product categories. Short-Term Orientation Factors that have created short-term orientation among managers Pressure stockholders give to increase quarter by quarter revenue and profit per share Bottom-line mentality Organizations developing marketing plans- (w/ rewards and punishments for manager performance) that are based on short-term revenue generation
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Chapter 17 -- Sales Promotion, Point-of-Purchase Advertising, and Support Media (5e) Seeking tactics that have short-term effects (e.g McDonalds “play to win” game boost sales 15%) Consumer Response to Promotions Precision shopper in contemporary marketplace demanding greater value across all purchase situ-
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Chapter 17 - Chapter 17 Sales Promotion Point-of-Purchase...

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