Sales promotion

Résumé du document

Sales promotion consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker and/or greater purchase of particular products/services by consumers or the trade. Advertising offers a reason to buy, sales promotion offers an incentive to buy. There are 3 types of sales promotions: Consumer Promotions (samples, coupons, cash refund offers, prices off, premiums, prizes, patronage rewards, free trials, warranties, tie-in promotions, cross promotions, point-of-purchase displays, demonstrations); Trade Promotions (prices off, advertising and display allowances and free goods); and Consumer Promotions (samples, coupons, cash refund offers, prices off, premiums, prizes, patronage rewards, free trials, warranties, tie-in promotions, cross promotions, point-of-purchase displays, demonstrations).

Extraits

[...] A with-pack premium accompanies the product inside (in-pack) or on pack) the package. The package itself, if a reusable container, can serve as a premium. A free-in-the-mail premium is an item mailed to consumers who send in a proof of purchase Prizes (contests) Prizes are offers on the change to win cash, trips or products as a result of purchasing something. A contest calls for consumers to submit an entry jingle, estimate, slogan) to be examined by judges who will select the best entries Patronage Awards Values in cash or in other forms that are proportional to one's patronage of a certain seller or group of sellers. [...]

[...] These include: 1. The growing power of retailers—In recent years several developments have helped to transfer power from the manufacturers to the retailers. With the advent of optical checkout scanners and sophisticated in-store computer systems, retailers gained access to data concerning how quickly products turn over, which sales promotions are working and which products make money. Retailers use this information to analyze sales of manufacturers' products and then demand discounts and other promotional support from manufacturers of lagging brands. Consolidation of the grocery store industry has also resulted in larger and more powerful retailers who can use their purchasing power to demand more trade promotion deals Declining brand loyalty—Consumers have become less brand loyal and are purchasing more on the basis of price, value, and convenience. [...]

[...] Sales promotion offers such as coupons, contests and sweepstakes are often used to attract attention to ads and increase consumers involvement with a marketer's IMC program. Consumer promotion tools 1. Samples Offer of a free amount of a product or service. The sample might be delivered door to door, sent in the mail, picked up in a store, found attached to another product, or featured in an advertising offer. Sampling is the most effective and most expensive way to introduce a new product Coupons Certificates entitling the bearer to a stated saving on the purchase of a specific product. [...]

[...] Sales promotions are unlikely to turn them into loyal brand users. Sales promotions used in markets of high brand similarity produce a high sales response in the short run by little permanent gain in market share. In markets of high brand dissimilarity, sales promotions can alter market shares permanently. Advertising typically acts to build brand loyalty, while sales promotion aims to weaken brand loyalty. When a brand is price promoted too much of the time, the consumer begins to think less of it and buy it mainly when it goes on sale. [...]

[...] There are 3 types of sales promotion: 1. Consumer Promotions (samples, coupons, cash refund offers, prices off, premiums, prizes, patronage rewards, free trials, warranties, tie- in promotions, cross promotions, point-of-purchase displays, demonstrations) 2. Trade Promotions (prices off, advertising and display allowances and free goods) 3. Business and sales force promotion (trade shows and conventions, contests for sales reps, and speciality advertising) The purpose of sales promotion Sellers use incentive-type promotions to: 1. Attract new triers; 2. Reward loyal customers Increase the repurchase rates of occasional users. [...]