MKTG 455 EXAM 3
strengths of sales promotions stimulates demand (in the short run) flexibility weaknesses of sales promotions clutter consumers are not actually loyal to the brand promotion wars easily duplicated Waste different types of sales promotions premiums , price-offs, bonus packs, games, refunds and rebates, sweepstakes and contests, continuity and tie-ins premiums free with purchase mail-in or online offers in or near pack premiums self-liquidating offers (SLOs) Price-offs rewards present brand users establishes repeat purchase obtaining off shelf space bonus packs provides customer with the additional quantity at the regular price of one item games Activities engaged in for pleasure that include rules and often competition with one or more individuals.ex. coca-cola bottle caps refunds and rebates Offers by the manufacturer to return a portion of the product purchase price entices interest few customers actually redeem sweepstakes and contests requires proof of purchase plus some activity or playing involved continuity promotion (loyalty or point programs) allow customers to earn points or credit toward free or discounted merchandise Over lay program combines 2 or more offers ex. discount coupom plus two for one packaging tie-in programs combines complementary brands ex toothpaste plus tooth brush retailer promotions ex khols cash or belk rewards
objective of sales promotions Short term stimulus on behavorial response Targets of sales promotions consumers trade (distributors, wholesalers, retailers) company's sales force Functional rewards monetary (savings) Reduced need for search and decision precieved product quality provided by a discount on superior products Hedonistic rewards sense of being a wise shopper need for stimulation and variety obtaining entertainment value (sweepstakes and contests) 10 Things Sales Promotions CAN Accomplish stimulate the sales force for new, improved and mature products invigorate the sale of mature products facilitate introduction of new product to the trade increase on and off shelf merch space obtain trail purchase by customers (get them to try it) neutralize competitive advertising hold on to current users by encouraging repeat purchase increase product usage by loading consumers up with product preempt competition from loading consumers Reinforce advertising Sales promotion CANNOT accomplish compensate for a poorly trained sales team no long term reason to engage with the brand wont stop declining sales of general non acceptance of a brand rebate pros effective at stimulating demand for a product rebates cons easily copied, steals sales from the future, reduced precieved product value customers do not redeem Key feature of continuity programs encourages brand loyalty benefit of direct marketing highly selective audience Public Relations (PR) building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events Feature articles designed to get the paper's reader interested in a new product. is a detailed description of the product features for interested readers.View Model
visibility, information, emotional appeal, workability visability does the package get the customers attention Information does it communicate the benefits, use of the product Emotional appeal does it make the consumer feel something Workability how well does it function does it protect the contents or display the right amount of info Different kinds of billboards posters bulletins digital boards specialty "showings" percentage of people who see the billboard in a day usually in increments of 25 Strengths of billboards broad reach high frequency geographic flexibility Low CMP (cost per thousand) based on traffic count high brand identification weakness of billboards non-selectivity- only a finite number of available locations short exposure time environmental concerns In store media in store radio and tv, shelf talkers, shopping cart ads, floor graphics, coupon dispensers, signage Brand lift increase in the interaction with the brand Proactive PR Used for product releases and introductions of new products takes and offensive position seeks opportunity and is effective because it can build credibility Reactive PR Takes defensive approach.does damage control caused by outside sources prevents the market from eroding and attempts to regain lost customers must be quick and positive in response commercial rumors unverified rumors -may of may not be true Conspiracy Rumors
involve supposed company policies or practices that are threatening or undesirable to consumers Contamination rumors deal with undesirable or harmful product or store features word of mouth most influential informal communication about products and services that circulates between customers complex and hard to control Buzz organized effort to encourage favorable talk about a brand. get people to talk about them on their social network Viral marketing (works like a virus) customer talk about a product or service via the internet law of the few, the stickness factor and the power of context are some rules Urban legend crazy rumors about a brand that were never true Anti-Rumor Campaign STEP 1 focus on the specific points of the rumor that need to be addressed Anti-rumor Campaign STEP 2 emphasize that the conspiracy or rumor is untrue or unfair Anti-Rumor Campaign STEP 3 choose the appropriate media and vehicle for the message to be delivered Anti-Rumor Campaign STEP 4 Select a credible spokerperson to deliver the PR message on behalf of the company Manufacturers role on sales promotion collaborate with retailers, provide the product the promotion idea and the coupons. Pay for the clearing house Retailers role on sales promotion put it in the store and are trained to sell the product Consumer role on sales promotion understand how the promo works and how to interact SAles force role on sales promotion encourages consumers to interest trail and eventual purchase Largest use of sales promotion consumer packaged goods P&G Slotting money paid by the manufacturer to the retailer as a cost incurred for providing a slot or location in the retailers warehouse to accommodate the new brand is money given to the retailer to put your brand on the shelf Sampling try it before you buy it The primary goal is to encourage trial ex. direct mail, online sampling, in-store sampling How are promotion ideas evaluated (pre)
