What is it?

SALES PROMOTION „ Direct inducement to buy

„ Offers extra value to the consumer

„ Acceleration tool

„ Speeds up the selling process

How does it differ from Shift from Advertising to Advertising? Sales Promotion

„ Sales Promotion „ Power of retailers

„ Short-term focus - immediate response „ Less brand loyalty „ Quick sales „ Promotional sensitivity „ Helps boost market share „ Brand proliferation „ Advertising

„ Long-term focus „ Need quick results

„ Image building, positioning „ Accountability

How do you increase sales and market share? Communications Hierarchy

„ Penetration Level Strategy „ Get more people to buy Awareness Advertising – repetition „ Encourage brand switching Knowledge Slogans, jingles, copy „ Trial Liking Image copy „ Increase buying rate

„ Encourage multiple purchases Preference Competitive ads „ Encourage repeat purchases Trial/Purchase Sales Promotion, price

1 Consumer Promotions

„ Coupons

„ Price-off deals

„ Premiums

„ Contests/sweepstakes

„ Samples & trial offers

„ Product placement

„ Refunds/rebates

„ Frequency programs

On-line Coupons

„ http://www.hotcoupons.com/

„ http://www.coolsavings.com/

„ http://www.e-centives.com/

2 What is the Goal for Consumer Which promos are best for Promotions? inducing trial?

„ Trial „ Sampling - strongest

„ 75% of HH sampled will try the product „ Repeat purchase „ 15-20% will buy it later at full price „ Consume more nd „ Coupons – 2 best „ Introduce a new brand „ 3-5% of couponed HH will buy later „ 10% of direct mail coupons are redeemed „ Defend against competition „ Other Price-Off Techniques „ Contribute to the IMC – Build Brand „ Refunds generate 3-4% purchase rate Equity „ Price reductions, bonus packs

Which promos are best for Which promos are best for encouraging usage? enhancing brand equity?

„ Bonus packs „ Contests and sweepstakes

„ Price-offs „ Frequency or loyalty programs

„ Premiums „ Event marketing

„ Continuity programs „ Premium offers

„ Contests, sweepstakes

„ Redemption Premiums (proof of purchase)

Consumer Franchising-Building Non-Franchise-Building Promotions Promotions

„ Enhance a brand’s identity or image „ Accelerate purchases

„ Communicate distinctive attributes „ Do little to contribute to a brand’s image or identity

3 What is the Goal of Trade Promos? Trade Promotions

„ Motivate distributors and retailers to „ POP displays

stock and promote a product „ Incentives and contests

„ Gain distribution „ Trade allowances

„ Build retail inventories „ Trade shows

„ Increase store traffic „ Sales Training programs

„ Gain cooperation of trade „ Co-op advertising

4 What can’t sales promotion do? What are the RISKS?

„ Creating a price-orientation

„ Reverse a declining sales trend „ Borrowing from future sales

„ Hurting the equity of the brand

„ Make people accept an inferior product „ Over reliance and abuse

„ Promotional trap or spiral

„ Not building the long-term value of the brand

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