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Unformatted text preview: Chapter 16
Sales Promotion, Events, and Sponsorships WEB REVIEW QUESTIONS
1. Why is sales promotion on the increase as a percentage of the marketing
The chief reasons are the pressure for short-term profits and the need for
accountability for marketing communication efforts.
2. Explain the three types of sales promotion and how they differ.
The most common sales promotion strategies target the three audiences of
promotions: consumer, trade, and sales force. The first two—consumer sales and
trade support—have direct implications for advertising and are the focus of this
chapter. In the third category, sales force promotions include two general sets of
promotional activities directed at the firm’s salespeople to motivate them to increase
their sales levels. The first set of activities includes programs that better prepare
salespeople to do their jobs, such as sales manuals, training programs, sales
presentations, and supportive materials—training films, slides, videos, and visual
aids. The second set of activities deals with promotional efforts or incentives that
motivate salespeople to work harder. Contests dominate this category.
3. What is the difference between a contest and a sweepstakes?
Contests require participants to compete for a prize or prizes based on some sort of
skill or ability. Sweepstakes require only that participants submit their names to be
included in a drawing or other chance selection.
4. What is the difference between a premium and an advertising specialty?
A premium is a tangible reward for a particular act, usually purchasing a product or
visiting the point-of-purchase. Premiums are a type of incentive that work by adding
value to the product.
An advertising specialty presents the brand’s name on something that is given away
as a reminder, such as a calendar, pen, water bottle, and so forth. 366 Chap ter 16 : Sales Pro motion, Ev ents, and Sponsorships 5. What are the primary objectives that consumer promotions can deliver?
Consumer promotions can create awareness, cause trial, maintain or increase market
share, and serve as a brand reminder
6. Who is trade promotion directed to? Why is that audience important?
Trade refers to all the people involved in the channel of distribution—buyers, brokers,
distributors, wholesalers, dealers, franchisees, retailers, and so on. Trade advertising
directed at wholesalers and retailers provides trade members with information about
new products and their selling points. In addition trade promotion techniques,
especially price discounts, point-of-purchase displays, and advertising allowances,
motivate retailers to provide shelf space for products and consumer promotions.
7. How does sales promotion affect push and pull marketing strategies?
Manufacturers hope to see their trade partners push a product. Consumer and trade
promotions interact through complementing push and pull strategies. If consumers
really want to try a product, based on what they have heard in advertising and
publicity stories, they will ask their local retailers for it, which is called a pull
strategy; that is, by asking for it they will pull the product through the distribution
A push strategy pushes the product through the channel by convincing (motivating or
rewarding) members of the distribution network to carry a product.
8. What are the key objectives of trade promotions?
• Increase sales.
Gain trade support and cooperation and encourage their promotion of the
product to the consumer.
Manipulate levels of inventory.
Expand product distribution. 9. How can the Internet be used as a sales promotion tool?
There are a number of ways that advertisers can use the Internet for sales promotion
programs, including sampling, sweepstakes and contests, price deals, and coupons.
Internet promotion is one of the hot areas of sales promotions. Many advertising
campaigns include a campaign-dedicated Website designed as a tie-in for other
promotions. 367 Part 5: In tegration and Evalu ation 10. What is the primary objective of loyalty programs?
A loyalty program, also called a continuity or frequency program (such as airline
frequent flyer programs), is a promotion to increase customer retention and reward
customers for continued patronage. Typically, the higher the purchase level, the
greater the benefits.
11. What is the difference between co-branding, licensing, and tie-in programs?
When two companies come together to offer a product the effort is called cobranding.
With licensing, legally protected brand identity items, such as logos, symbols, and
brand characters, must be licensed, that is, a legal contract gives another company the
right to use the brand identity element. In brand licensing, a company with an
established brand “rents” that brand to other companies, allowing them to use its logo
on their products and in their advertising and promotional events.
A tie-in is an effective strategy for marketers using associations between
complementary brands to make one-plus-one equal three. The biggest tie-in deals are
arranged around movies and other entertainment events.
12. Explain how payout planning works.
Payout planning refers to providing something of value as a reward for purchasing a
product. The text provides examples of payout planning gone wrong in a Maytag
promotion as well as a Burger King promotion. 368 ...
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This note was uploaded on 11/19/2011 for the course ECON 101 taught by Professor Smith during the Spring '11 term at AIB College of Business.
- Spring '11