CSULB / MKTG 300 – Ch. 17: Advertising, Public Relations, and Sales Promotion

Advertising
– Impersonal, one-way mass communication about a product or organization that is paid for by a marketer.

– It is a popular form of promotion, especially for consumer packaged goods and services.

Advertising Response Function
– A phenomenon in which spending for advertising and sales promotion increases sales or market share up to a certain level but then produces diminishing returns.
Major Types of Advertising
– A firm’s promotional objectives determine the
type of advertising it uses. Some major types of advertising used are the following:

1) Institutional Advertising

2) Product Advertising

Institutional Advertising (Major Types of Advertising)
Major Types of Advertising:

– A form of advertising designed to enhance a company’s image rather than promote a particular product; usually done through advocacy advertising.

– Designed to establish, change, or promote the corporation’s identity as a whole.

– For instance, a beer company running a series of television spots advocating designated driving is an example of this type of advertising.

Advocacy Advertising (Institutional Advertising)
Institutional Advertising:

– A form of advertising in which an organization expresses its views on controversial issues or responds to media attacks.

– It is typically used to safeguard against negative consumer attitudes and to enhance the company’s
credibility among consumers who already favor its position.

– For example, in celebration of the one-year anniversary of New York’s Marriage Equality Act, Nabisco’s Oreo posted a gay pride-themed image (an Oreo cookie with six rainbow-colored layers of cream filling) on its Facebook page.

Product Advertising (Major Types of Advertising)
Major Types of Advertising:

– A form of advertising that touts the benefits of a specific good or service.

– The PLC often determines which type of advertising is used:

1) Pioneering Advertising

2) Competitive Advertising

3) Comparative Advertising

Pioneering Advertising (Product Advertising)
Product Advertising:

– A form of advertising designed to stimulate primary demand for a new product or product category.

– Heavily used during the introductory stage of the PLC, this form of advertising offers consumers in-depth information about the benefits of the product class.

– It also seeks to create interest and, as such, can be
quite innovative in its own right.

– For example, Motorola placed an ad for its new flagship Smartphone, the Moto X, in the January 2014 issue of Wired.

Competitive Advertising (Product Advertising)
Product Advertising:

– A form of advertising designed to influence demand for a specific brand.

– Firms use this form of advertising when a product enters the growth phase of the PLC and other companies begin to enter the marketplace.

– Advertisements focus on showing subtle differences between brands, building recall of a brand name, and creating a favorable attitude toward the brand.

– For example, GEICO uses this form of advertising that discusses the attributes of the brand, how little time it takes to get a quote, how much customers can save, and the ease of submitting a claim.

Comparative Advertising (Product Advertising)
Product Advertising:

– A form of advertising that compares two or more specifically named or shown competing brands on one or more specific attributes.

– Products experiencing slow growth or those entering the marketplace against strong competitors are more likely to employ this type of advertising.

– Federal rulings prohibit advertisers from falsely describing competitors’ products and allow competitors to sue if ads show their products or mention their brand names in an incorrect or false manner.

Advertising Campaign
– A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals.

– It is a specific advertising effort for a particular product that extends for a defined period of time.

– Before any creative work can begin on an advertising campaign, it is important to determine what goals or objectives the advertising should achieve.

Advertising Objective
– A specific communication task that a campaign should accomplish for a specified target audience during a
specified period.

– The DAGMAR approach (Defining Advertising Goals for Measured Advertising Results) is one method of setting objectives.

– According to this method, all advertising objectives should precisely define the target audience, the desired percentage change in some specified measure of effectiveness, and the time frame in which that change is to occur.

Creative Decisions in Advertising
– These type of decisions include:

1) Identifying Product Benefits
2) Developing and Evaluating Advertising Appeals
3) Executing the Message
4) Post-campaign Evaluation

Identifying Product Benefits (Creative Decisions in Advertising)
Creative Decisions in Advertising:

– In advertising, the goal is to sell the benefits of the product, not its attributes.

– Customers do not buy attributes, they buy benefits.

– A quick test to determine whether you are offering attributes or benefits in your advertising is to ask “So?”

Developing and Evaluating Advertising Appeals (Creative Decisions in Advertising)
Creative Decisions in Advertising:

– Advertising Appeal
– Unique Selling Proposition

Advertising Appeal (Developing and Evaluating Advertising Appeals)
Developing and Evaluating Advertising Appeals:

– A reason for a person to buy a product.

– Typically the responsibility of the creative team (e.g., art directors and copywriters) in the advertising agency.

– Typically play off consumers’ emotions or address some need or want consumers have.

Unique Selling Proposition (Developing and Evaluating Advertising Appeals)
Developing and Evaluating Advertising Appeals:

– A desirable, exclusive, and believable advertising appeal selected as the theme for a campaign.

– Often becomes all or part of the campaign’s slogan.

Executing the Message (Creative Decisions in Advertising)
Creative Decisions in Advertising:

– Any ad should immediately draw the reader’s, viewer’s, or listener’s attention.

– The advertiser must then use the message to hold interest, create desire for the good or service, and ultimately motivate a purchase.

– The style in which the message is executed is one of the most creative elements of an advertisement; therefore, executional styles often dictate what type of media is to be employed to convey the message.

Execution Styles for Advertising (Executing the Message)
Executing the Message:

– Slice-of-Life
– Lifestyle
– Spokesperson / Testimonial
– Fantasy
– Humorous
– Real / Animated Product Symbols
– Mood or Image
– Demonstration
– Musical
– Scientific

Slice-of-Life (Execution Styles for Advertising)
Execution Styles for Advertising:

– Depicts people in normal settings, such as at the dinner table or in their car.

– McDonald’s often uses slice-of-life styles showing youngsters munching on french fries from Happy Meals on family outings.

Lifestyle (Execution Styles for Advertising)
Execution Styles for Advertising:

– Shows how well the product will fit in with the consumer’s way of living.

– As his Volkswagen Jetta moves through the streets of the French Quarter, a Gen X driver inserts a techno music CD and marvels at how the rhythms of the world mimic the ambient vibe inside his vehicle.

Spokesperson / Testimonial (Execution Styles for Advertising)
Execution Styles for Advertising:

– Can feature a celebrity, company official, or typical consumer making a testimonial or endorsing a product.

– Sheryl Crow represented Revlon’s Colorist hair coloring, while Beyoncé Knowles was named the new face of American Express.

– Dell Inc. founder Michael Dell touts his vision of the customer experience via Dell in television ads.

Fantasy (Execution Styles for Advertising)
Execution Styles for Advertising:

– Creates a fantasy for the viewer built around use of the product.

– Carmakers often use this style to let viewers fantasize
about how they would feel speeding around tight corners or down long country roads in their cars.

Humorous (Execution Styles for Advertising)
Execution Styles for Advertising:

– Advertisers often use humor in their ads, such as Snickers’ “Not Going Anywhere for a While” campaign featuring hundreds of souls waiting, sometimes impatiently, to get into heaven.

Real / Animated Product Symbols (Execution Styles for Advertising)
Execution Styles for Advertising:

– Creates a character that represents the product in advertisements, such as the Energizer Bunny or Starkist’s Charlie the Tuna.

– GEICO’s suave gecko and disgruntled cavemen became cult classics for the insurance company.

Mood or Image (Execution Styles for Advertising)
Execution Styles for Advertising:

– Builds a mood or image around the product, such as peace, love, or beauty.

– De Beers ads depicting shadowy silhouettes wearing diamond engagement rings and diamond necklaces portrayed passion and intimacy while extolling that “a diamond is forever.”

Demonstration (Execution Styles for Advertising)
Execution Styles for Advertising:

– Shows consumers the expected benefit of a product or service.

– Many consumer products and / or services use this technique.

– Laundry detergent spots are famous for demonstrating how their product will clean clothes whiter and brighter.

– Fort James Corporation demonstrated in television commercials how its Dixie Rinse & ReUse disposable stoneware product line can stand up to the heat of a blowtorch and survive a cycle in a clothes washer.

Musical (Execution Styles for Advertising)
Execution Styles for Advertising:

– Conveys the message of the advertisement through song.

– For example, Nike’s ads depicted a marathoner’s tortured feet and a surfer’s thigh scarred by a shark attack while strains of Joe Cocker’s “You Are So Beautiful” could be heard in the background.

Scientific (Execution Styles for Advertising)
Execution Styles for Advertising:

– Uses research or scientific evidence to give a brand superiority over competitors.

– Pain relievers like Advil, Bayer, and Excedrin use scientific evidence in their ads.

Post-campaign Evaluation (Creative Decisions in Advertising)
Creative Decisions in Advertising:

– Testing ad effectiveness can be done before and / or
after the campaign; before a campaign is released, marketing managers use pretests to determine the best advertising appeal, layout, and media vehicle.

– After advertisers implement a campaign, they use several monitoring techniques to determine whether the campaign has met its original goals.

– Even if a campaign has been highly successful, advertisers still typically do a post-campaign analysis to identify how the campaign might have been more efficient and what factors contributed to its success.

Media Decisions in Advertising
– These type of decisions include:

1) Media Types

2) Media Selection Considerations

3) Media Scheduling

Media Types (Media Decisions in Advertising)
Media Decisions in Advertising:

– Advertising media are channels that advertisers use in
mass communication.

– The six major advertising media are:

1) Newspapers
2) Magazines
3) Radio
4) Television
5) Internet
6) Outdoor Media

– Exhibit 17.3 summarizes the advantages and disadvantages of some of these major channels.

Newspapers (Media Types)
Media Types:

– It is one of the oldest forms of media.

– The main sources of this media’s revenue are local retailers, classified ads, and cooperative advertising.

Cooperative Advertising (Newspapers)
Newspapers:

– An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand.

– For example, Estée Lauder may split the cost of an advertisement with Macy’s department store provided that the ad focuses on Estée Lauder’s products.

Advantages of Newspapers (Media Types)
Media Types:

– Geographic selectivity and flexibility.

– Short-term advertiser commitments.

– News value and immediacy.

– Year-round readership.

– High individual market coverage.

– Co-op and local tie-in availability

– Short lead time.

Disadvantages of Newspapers (Media Types)
Media Types:

– Little demographic selectivity.

– Limited color capabilities.

– Low pass-along rate.

– May be expensive.

Magazines (Media Types)
Media Types:

– Another traditional medium that has been successful.

– However, compared to the cost of other media, the cost per contact is usually high.

– The cost per potential customer may be much lower, however, because this type of media is often targeted to specialized audiences and thus reaches more potential customers.

Advantages of Magazines (Media Types)
Media Types:

– Good reproduction; especially for color.

– Demographic selectivity.

– Regional selectivity.

– Local market selectivity.

– Relatively long advertising life.

– High pass-along rate.

Disadvantages of Magazines (Media Types)
Media Types:

– Long-term advertiser commitments.

– Slow audience buildup.

– Limited demonstration capabilities.

– Lack of urgency.

– Long lead time.

Radio (Media Types)
Media Types:

– Has several strengths as an advertising medium:

1) Selectivity and audience segmentation.

2) A large out-of-home audience.

3) Low unit and production costs, timeliness, and geographic flexibility.

– Local advertisers are the most frequent users of this type of media, contributing over 75 percent of all its revenue.

– Like newspapers, this type of media also lends itself well to cooperative advertising.

Advantages of Radio (Media Types)
Media Types:

– Low cost.

– Immediacy of message.

– Can be scheduled on short notice.

– Relatively no seasonal change in audience.

– Highly portable.

– Short-term advertiser commitments.

– Entertainment carryover.

Disadvantages of Radio (Media Types)
Media Types:

– No visual treatment.

– Short advertising life of message.

– High frequency required to generate comprehension and retention.

– Distractions from background sound.

– Commercial clutter.

Television (Media Types)
Media Types:

– Broadcasters for this type of media include:

1) Network Television (ABC, MSNBC, FOX)
2) Independent Stations
3) Cable Television (AMC, ESPN)
4) Direct Broadcast Satellite Television (DISH)

– Advertising time on this type of media can be very expensive, especially for network and popular cable channels.

– Types of advertisements that can be made through this medium are commercials or infomercials.

Infomercial (Television)
Television:

– A thirty-minute or longer advertisement that looks more like a television talk show than a sales pitch.

– Advertisers say that this type of advertisement is an ideal way to present complicated information to potential customers, which other advertising vehicles typically do not allow time to do.

Advantages of Television (Media Types)
Media Types:

– Ability to reach a wide, diverse audience.

– Low cost per thousand.

– Creative opportunities for demonstration.

– Immediacy of messages.

– Entertainment carryover.

– Demographic selectivity with cable stations.

Disadvantages of Television (Media Types)
Media Types:

– Short life of message.

– Some consumer skepticism about claims.

– High campaign cost.

– Little demographic selectivity with network stations.

– Long-term advertiser commitments.

– Long lead times required for production.

– Commercial clutter.

Internet (Media Types)
Media Types:

– Online advertising has become a versatile medium to target specific groups, so it should come as no surprise that U.S. digital ad revenues reached $110 billion in 2013.

– Online advertising includes:

1) Search Engine Marketing (e.g., pay-per-click ads like Google AdWords.)

2) Display Advertising (e.g., banner ads, video ads.)

3) Social Media Advertising (e.g., Facebook ads.)

4) E-mail Marketing

5) Mobile Marketing (including mobile advertising and
SMS.)

6) Advergaming

Advergaming (Internet)
Internet:

– Placing advertising messages in Web-based, mobile, console, or handheld video games to advertise or promote a product, service, organization, or issue.

– A result of placing advertising messages in video games. whether console or handheld, is gamification.

Gamification (Advergaming)
Advergaming:

– The process of using game mechanics and a gaming mindset to engage an audience, which is increasingly important for marketers to know about and utilize.

Advantages of Internet (Media Types)
Media Types:

– Fastest-growing medium.

– Ability to reach a narrow target audience.

– Relatively short lead time required for creating Web-based advertising.

– Moderate cost.

– Ability to measure ad effectiveness.

– Ability to engage consumers through search engine marketing, social media, display advertising, and mobile marketing.

Disadvantages of Internet (Media Types)
Media Types:

– Most ad exposure relies on “click-through” from display ads.

– Measurement for social media needs much improvement.

– Not all consumers have access to the Internet, and many consumers are not using social media.

Outdoor Media (Media Types)
Media Types:

– Out-of-home advertising is a flexible, low-cost medium that may take a variety of forms.

– Examples include billboards, skywriting, giant inflatables, mini billboards in malls and on bus stop shelters, signs in sports arenas, and lighted moving signs in bus terminals and airports, as well as ads painted on cars, trucks, buses, water towers, manhole covers, drinking glass coasters, and even people, called “living advertising.”

– It reaches a broad and diverse market and is therefore ideal for promoting convenience products and services as well as directing consumers to local businesses.

Advantages of Outdoor Media (Media Types)
Media Types:

– Repetition

– Moderate cost.

– Flexibility

– Geographic selectivity.

Disadvantages of Outdoor Media (Media Types)
Media Types:

– Short message.

– Lack of demographic selectivity.

– High “noise” level distracting audience.

Advertainments
– Mini movies that promote a product and are shown online.
Media Selection Considerations (Media Decisions in Advertising)
Media Decisions in Advertising:

– Media Mix

– Cost Per Contact

– Cost Per Click

– Reach

– Frequency

– Audience Selectivity

Media Mix (Media Selection Considerations)
Media Selection Considerations:

– The combination of media to be used for a promotional campaign.

– It is typically based on several factors: cost per contact, cost per click, reach, frequency, target audience considerations, flexibility of the medium, noise level, and the life span of the medium.

Cost Per Contact (Media Selection Considerations)
Media Selection Considerations:

– The cost of reaching one member of the target market.

– Enables an advertiser to compare the relative costs of specific media vehicles (such as television versus radio or magazine versus newspaper), or more
specifically, within a media category (such as People
versus US Weekly).

Cost Per Click (Media Selection Considerations)
Media Selection Considerations:

– The cost associated with a consumer clicking on a display or banner ad.

– This option enables the marketer to pay only for “engaged” consumers — those who opted to click on an ad.

Reach (Media Selection Considerations)
Media Selection Considerations:

– The number of target consumers exposed to a commercial at least once during a specific period, usually four weeks.

– It is related to a medium’s ratings, generally referred to in the industry as gross ratings points, or GRP.

– For example, a television program with a higher GRP means that more people are tuning in to the show and the reach is higher.

Frequency (Media Selection Considerations)
Media Selection Considerations:

– The number of times an individual is exposed to a given message during a specific period.

– Advertisers repeat their ads so that potential
customers will remember the message because the typical ad is short-lived and often only a small portion of an ad may be perceived at one time.

Audience Selectivity (Media Selection Considerations)
Media Selection Considerations:

– The ability of an advertising medium to reach a precisely defined market.

– It is determined through by the advertising medium’s flexibility, noise level, and life-span.

Medium
– The channel used to convey a message to a target market.

– It is a major decision for advertisers.

Media Planning
– The series of decisions advertisers make regarding the selection and use of media, allowing the marketer to optimally and cost-effectively communicate the message to the target audience.

– Specifically, advertisers must determine which types of media will best communicate the benefits of their product or service to the target audience, and when and for how long the advertisement will run.

Media Scheduling (Media Decisions in Advertising)
Media Decisions in Advertising:

– After choosing the media for the advertising campaign, advertisers must schedule the ads; they could do so through the four types of media schedules:

1) Continuous Media Schedule

2) Flighted Media Schedule

3) Pulsing Media Schedule

4) Seasonal Media Schedule

Media Schedule (Media Scheduling)
Media Scheduling:

– Designation of the media, the specific publications or programs, and the insertion dates of advertising.

Continuous Media Schedule (Media Scheduling)
Media Scheduling:

– A media scheduling strategy in which advertising is run steadily throughout the advertising period; used for products in the later stages of the product life cycle.

– Examples include Ivory soap and Charmin toilet tissue, which may have an ad in the newspaper every Sunday and a television commercial on NBC every Wednesday at 7:30 p.m. over a three-month time period.

Flighted Media Schedule (Media Scheduling)
Media Scheduling:

– A media scheduling strategy in which ads are run heavily every other month or every two weeks to achieve a greater impact with an increased frequency and reach at those times.

– Movie studios might schedule television advertising on
Wednesday and Thursday nights, when moviegoers are deciding which films to see that weekend.

Pulsing Media Schedule (Media Scheduling)
Media Scheduling:

– A media scheduling strategy that uses continuous scheduling throughout the year coupled with a flighted schedule during the best sales periods.

– A retail department store may advertise on a year-round basis but place more advertising during certain sale periods such as Thanksgiving, Christmas, and back-to-school.

Seasonal Media Schedule (Media Scheduling)
Media Scheduling:

– A media scheduling strategy that runs advertising only during times of the year when the product is most likely to be used.

– Products like Sudafed cold tablets and Coppertone sunscreen, which are used more during certain times of
the year, tend to follow a seasonal strategy.

Creative and Media Decisions
– Decisions that are made at the same time because creative work cannot be completed without knowing which medium will be used to convey the message to the target market.

– In many cases, the advertising objectives dictate the medium and the creative approach to be used.

– For example, if the objective is to demonstrate how fast a product operates, a television commercial that shows this action may be the best choice.

Public Relations
1) Public Relations

2) Major PR Tools

3) Duties of PR Departments

PR (Public Relations)
Public Relations:

– The element in the promotional mix that evaluates public attitudes, identifies issues that may elicit public
concern, and executes programs to gain public understanding and acceptance.

– PR campaigns should capitalize on the factors that enhance the firm’s image and minimize the factors that could generate a negative image.

Publicity (Public Relations)
Public Relations:

– An effort to capture media attention, often initiated
through press releases that further a corporation’s public relations plans.

Major PR Tools (Public Relations)
Public Relations:

– Public relations professionals commonly use several
tools, many of which require an active role on the part
of the public relations professional, such as writing press releases and engaging in proactive media relations.

– Sometimes, however, the following techniques create their own publicity:

1) New-product Publicity
2) Product Placement
3) Consumer Education
4) Sponsorship
5) Experiential Marketing
6) Company Web Sites

New-product Publicity (Major PR Tools)
Major PR Tools:

– During the introductory period, an especially innovative new product often needs more exposure than conventional, paid advertising affords.

– Public relations professionals write press releases or develop videos in an effort to generate news about their new product.

– They also jockey for exposure of their product or service at major events, on popular television and news shows, or in the hands of influential people.

Product Placement (Major PR Tools)
Major PR Tools:

– A PR strategy that involves getting a product, service, or company name to appear in a movie, television show, radio program, magazine, newspaper, video game, video or audio clip, book, or commercial for another product; on the Internet; or at special events.

– They are arranged through barter (trade of product for placement), through paid placements, or at no charge when the product is viewed as enhancing the vehicle it is placed in.

– Overall, companies obtain valuable product exposure, brand reinforcement, and increased sales through product placement, often at a much lower cost than in mass media like television ads.

Consumer Education (Major PR Tools)
Major PR Tools:

– Some major firms believe that educated consumers are more loyal customers.

– Financial planning firms often sponsor free educational seminars on money management, retirement planning, and investing in the hope that the seminar participants will choose the sponsoring organization for their future financial needs.

Sponsorship (Major PR Tools)
Major PR Tools:

– A public relations strategy in which a company spends money to support an issue, cause, or event that is consistent with corporate objectives, such as improving brand awareness or enhancing corporate image.

– Although the most popular sponsorship events are still those involving sports, music, or the arts, companies have recently been turning to more specialized events such as tie-ins with schools, charities, and other community service organizations.

– Also, sponsorship issues are quite diverse, but the three most popular are education, health care, and social programs.

Experiential Marketing (Major PR Tools)
Major PR Tools:

– Involves engaging with consumers in a way that enables them to feel the brand — not just read about it.

– Examples of this marketing type include American Express’s Small Business Saturday, which promotes shopping at local businesses, and Clear Channel’s effort to run a carnival-style dunk tank in NYC’s Times Square.

Company Web Sites (Major PR Tools)
Major PR Tools:

– They are used to introduce new products; provide information to the media including social media news releases; promote existing products; obtain consumer feedback; communicate legislative and regulatory information; showcase upcoming events; provide links to related sites (including corporate and non-corporate blogs, Facebook, and Twitter); release financial information; interact with customers and potential customers; and perform many more marketing activities.

Duties of PR Departments (Public Relations)
Public Relations:

– PR departments may perform any or all of the following functions:

1) Press Relations
2) Product Publicity
3) Corporate Communication
4) Public Affairs
5) Lobbying
6) Employee and Investor Relations
7) Crisis Management

Press Relations (Duties of PR Departments)
Duties of PR Departments:

– Placing positive, newsworthy information in the news media or in the hands of influential bloggers to attract attention to a product, a service, or a person associated with the firm or institution.

Product Publicity (Duties of PR Departments)
Duties of PR Departments:

– Publicizing specific products or services through a variety of traditional and online channels.

Corporate Communication (Duties of PR Departments)
Duties of PR Departments:

– Creating internal and external messages to promote a positive image of the firm or institution.

Public Affairs (Duties of PR Departments)
Duties of PR Departments:

– Building and maintaining local, national, or global community relations.

Lobbying (Duties of PR Departments)
Duties of PR Departments:

– Influencing legislators and government officials to promote or defeat legislation and regulation.

Employee and Investor Relations (Duties of PR Departments)
Duties of PR Departments:

– Maintaining positive relationships with employees, shareholders, and others in the financial community.

Crisis Management (Duties of PR Departments)
Duties of PR Departments:

– A coordinated effort to handle all the effects of unfavorable publicity or another unexpected unfavorable event.

Sales Promotion
– SP

– Tools for Trade Sales Promotion

– Tools for Consumer Sales Promotion

– Trends in Sales Promotion

SP (Sales Promotion)
Sales Promotion:

– Consists of marketing communication activities other than advertising, personal selling, and public relations, in which a short-term incentive motivates consumers or members of the distribution channel to purchase a good or service immediately, either by lowering the price or by adding value.

– There are two types:

1) Trade Sales Promotion
2) Consumer Sales Promotion

Trade Sales Promotion (Sales Promotion)
Sales Promotion:

– Promotion activities directed to members of the marketing channel, such as wholesalers and retailers.

Consumer Sales Promotion (Sales Promotion)
Sales Promotion:

– Promotion activities targeted to the ultimate consumer market.

Tools for Trade Sales Promotion (Sales Promotion)
Sales Promotion:

– Manufacturers use many of the same sales promotion tools used in consumer promotions, such as sales contests premiums and point-of-purchase displays.

– Several tools, however, are unique to manufacturers and intermediaries:

1) Trade Allowance
2) Push Money
3) Training
4) Free Merchandise
5) Store Demonstrations
6) Business Meetings, Conventions, and Trade Shows

Trade Allowance (Tools for Trade Sales Promotion)
Tools for Trade Sales Promotion:

– A price reduction offered by manufacturers to intermediaries such as wholesalers and retailers.

– The price reduction or rebate is given in exchange for doing something specific, such as allocating space for a new product or buying something during special periods.

– For example, a local Best Buy outlet could receive a special discount for running its own promotion on Sony surround sound systems.

Push Money (Tools for Trade Sales Promotion)
Tools for Trade Sales Promotion:

– Money offered to channel intermediaries to encourage them to “push” products — that is, to encourage other members of the channel to sell the products.

– Often the money is directed toward a retailer’s salespeople.

– LinoColor, the leading high-end scanner company, produces a Picture Perfect Rewards catalog filled with
merchandise retailers can purchase with points accrued for every LinoColor scanner they sell.

Training (Tools for Trade Sales Promotion)
Tools for Trade Sales Promotion:

– Sometimes a manufacturer will train an intermediary’s personnel if the product is rather complex — as frequently occurs with the computer and telecommunications industries.

– For example, representatives of major pharmaceutical companies receive extensive training because they need to provide accurate information to doctors and nurses.

Free Merchandise (Tools for Trade Sales Promotion)
Tools for Trade Sales Promotion:

– Often a manufacturer offers retailers free merchandise in lieu of quantity discounts.

– Occasionally, free merchandise is used as payment for trade allowances normally provided through other sales promotions.

– For example, instead of giving a retailer a price reduction for buying a certain quantity of merchandise, the manufacturer may throw in extra merchandise “free” (i.e., at a cost that would equal the price reduction).

Store Demonstrations (Tools for Trade Sales Promotion)
Tools for Trade Sales Promotion:

– Manufacturers can also arrange with retailers to perform an in-store demonstration.

– Food manufacturers often send representatives to grocery stores and supermarkets to let customers sample a product while shopping.

Business Meetings, Conventions, and Trade Shows (Tools for Trade Sales Promotion)
Tools for Trade Sales Promotion:

– They are an important aspect of sales promotion and a growing, multi-billion-dollar market.

– At these shows, manufacturers, distributors, and other vendors have the chance to display their goods or describe their services to potential customers.

– Companies participate in trade shows to attract and identify new prospects, serve current customers, introduce new products, enhance corporate image, test
the market response to new products, enhance corporate morale, and gather competitive product information.

Tools for Consumer Sales Promotion (Sales Promotion)
Sales Promotion:

– Marketing managers must decide which consumer sales promotion devices to use in a specific campaign.

– The popular tools for consumer sales promotion, which have also been easily transferred to online versions to entice Internet users to visit sites, purchase products, or use services on the Web. are the following:

1) Coupon
2) Rebate
3) Premium
4) Loyalty Marketing Programs
5) Contests
6) Sweepstakes
7) Sampling
8) Point-of-Purchase Displays

Coupon (Tools for Consumer Sales Promotion)
Tools for Consumer Sales Promotion:

– A certificate that entitles consumers to an immediate price reduction when the product is purchased.

– It a particularly good way to encourage product trial and repurchase, and it is also likely to increase the amount of a product bought.

– It can be distributed in stores as instant coupons on packaging, on shelf displays with pull-off coupon dispensers, and at cash registers, printed based on
what the customer purchased; through freestanding inserts (FSIs); and through various Internet daily deal sites.

Rebate (Tools for Consumer Sales Promotion)
Tools for Consumer Sales Promotion:

– A cash refund given for the purchase of a product during a specific period.

– They allow manufacturers to offer price cuts to consumers directly.

– Manufacturers also have more control over rebate promotions because they can be rolled out and shut off quickly.

Premium (Tools for Consumer Sales Promotion)
Tools for Consumer Sales Promotion:

– An extra item offered to the consumer, usually in exchange for some proof of purchase of the promoted product.

– Can also include more product for the regular price, such as two-for-the-price-of-one bonus packs or packages that include more of the product.

– This promotional tool helps reinforce the consumer’s purchase decision, increase consumption, and persuade nonusers to switch brands.

Loyalty Marketing Programs (Tools for Consumer Sales Promotion)
Tools for Consumer Sales Promotion:

– A promotional program designed to build long-term, mutually beneficial relationships between a company and its key customers.

– One of the most popular types of loyalty programs is the frequent buyer program.

Frequent Buyer Program (Loyalty Marketing Programs)
Loyalty Marketing Programs:

– A loyalty program in which loyal consumers are rewarded for making multiple purchases of a particular good or service.

Contests (Tools for Consumer Sales Promotion)
Tools for Consumer Sales Promotion:

– Promotions in which participants use some skill or ability to compete for prizes.

– A consumer contest usually requires entrants to answer questions, complete sentences, or write a paragraph about the product and submit proof of purchase.

Sweepstakes (Tools for Consumer Sales Promotion)
Tools for Consumer Sales Promotion:

– Promotion that depends on chance, and participation is free.

– It usually draws about ten times more entries than contests do.

Sampling (Tools for Consumer Sales Promotion)
Tools for Consumer Sales Promotion:

– A promotional program that allows the consumer the opportunity to try a product or service for free.

Point-of-Purchase Display (Tools for Consumer Sales Promotion)
Tools for Consumer Sales Promotion:

– A promotional display set up at the retailer’s location to build traffic, advertise the product, or induce impulse buying.

– Displays include shelf “talkers” (signs attached to store
shelves), shelf extenders (attachments that extend
shelves so products stand out), ads on grocery carts and bags, end-aisle and floor-stand displays, television monitors at supermarket checkout counters, in-store audio messages, and audiovisual displays.

Trends in Sales Promotion (Sales Promotion)
Sales Promotion:

– The biggest trend in sales promotion on both the
trade and consumer side has been the increased
use of the Internet.

– Social media, e-mail, and Web site-based promotions have expanded dramatically in recent years.

– Marketers are now spending billions of dollars annually on such promotions.

– A final major trend in sales promotion is the utilization of sales promotions on social media and at the point of purchase.