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Sales promotions and characteristics

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Any incentive that is additional to the basic benefits provided by the brand and temporarily changes its perceived price or value -Short-term oriented -Capable of influencing behavior b/c it offers buyers superior value and can make them feel better about the buying experience

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Sales promotions examples

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Consumer: samples, coupons, premiums, contests, sweepstakes, etc. Trade: buying allowances, push money, advertising allowances, display allowances, trade shows Sales force: sales contests, bonuses, meetings, POP displays

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Purposes of sales promotion

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- To induce trade (wholesalers/retailers) or consumers to buy a brand -To encourage the manufacturers sales force to sell a brand aggressively -To encourage immediate, desired shopping and purchasing behaviors from consumers -To encourage people to increase their donations to nonprofits now rather than later

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Advertising spending

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Advertising expenditures have declined in recent years while promotion spending has increased -Encourage the sales force

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What types of companies use sales promotions

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-Mature brands?

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How sales promotions relates to push strategies

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Using promotional efforts to push product through the selling chain -Push retailers to sell

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How sales promotions relates to pull strategies

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Using consumer advertising to pull product through the channel of distribution -Pull consumers in

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Who are the targets/audiences for brand promotions and how this relates to push vs. pull

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Encourage = sales force Push = retailers Pull = consumers

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What has led to growth in sales promotions

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-Shift in balance of power from manufacturers to retailers -Increased brand parity and price sensitivity -Reduced brand loyalty -Splintered mass market reduced media effectiveness -Emphasis on short term results in corporate reward structures -Responsive consumers

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Sales promotions CAN...

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-Stimulate sales force enthusiasm for a new, improved, or mature product -Invigorate sales of a mature brand -Facilitate the introduction of new products to the trade

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Sales promotions CAN...

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-Increase on and off shelf merchandising space -Neutralize competitive advertising and sales promotions -Obtain trial purchases from consumers

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Sales promotions CAN...

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-Hold current users by encouraging repeat purchases -Increase product usage by loading consumers -Preempt competition by loading consumers -Reinforce advertising

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Sales promotions CANNOT...

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-Compensate for a poorly trained sales force or for a lack of advertising - Give the trade or consumers any compelling long-term reason to continue purchasing a brand -Permanently stop an established brands declining sales trend or change the basic non-acceptance of an undesired product

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Problems with an excessive emphasis on sales promotion

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-Damage image of product -Diminish brand loyalty -Reduce consumption Examples: Kohl's, Justice for Girls

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Brand management objectives of sales promotions

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(influencing consumer behavior) -Generate purchase trial and re-trial for new customers -Encourage repeat purchases for current customers -Reinforce brand image

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Consumer rewards provided by sales promotions

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-All promotion techniques provide consumers w/ rewards (benefits, incentives, inducements) -They encourage certain forms of behavior -Utilitarian and hedonistic

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Utilitarian benefits of rewards

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*physical rewards* -Obtaining monetary savings -Reducing search and decision costs -Obtaining improved product quality made possible by a price reduction that allows consumers to buy superior brands they might not otherwise purchase

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Hedonistic benefits of rewards

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*emotional rewards* -Accomplishing a sense of being a wise shopper -Achieving a need for stimulation and variety when trying a brand that might not be purchased if it were not for an attractive promotion -Obtaining entertainment value when, for example, the consumer competes in a promotional contest or a sweepstakes

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Sampling

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Any method used to deliver an actual or trial-sized product to consumers

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Sampling distribution methods

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-Direct Mail -Newspapers/magazines -Door to door -On or in-pack sampling -High traffic locations/unique venues -In-store sampling -Online sampling Examples: Gillette on mans 18th bday, Bobbi Brown samples with orders

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Why is sampling effective?

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-Gives consumers an opportunity to experience a new brand personally -Allows an active, hands-on interaction rather than a passive encounter (coupons) -It is almost a necessity when introducing truly new products that can afford this form of promotion

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When is it good to use sampling?

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1. When the new or improved brand is demonstrably superior or has distinct relative advantages 2. When an innovative product concept is difficult to communicate by advertising alone 3. When promotional budgets can afford to generate consumer trial quickly

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Sampling problems

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-Expensive -Mishandling in distribution -Distributed to the wrong market -In or on-package samples do not capture current non-consumers -Can fail to reach sufficient numbers of consumers to justify its expense -May be misused by customers -Pilferage (petty theft or shoplifting)

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Coupons as an IMC tool

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A promotional device that rewards consumers for purchasing the brand by providing cents-off savings -Instant digital or mail/media delivered

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Paper coupons

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-Vendors have many years experience -Manufacturers have data to prove it is effective in increasing sales -Have established guidelines -Manufacturer has full control in the creation and distribution

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Digital coupons

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-Many digital vendors are new to the industry -Guidelines are being developed -Require much more systems integration -Redemption is for the product UPC, not the generic family code -Can reach a growing target for CPGs and the millennials

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Coupon methods of distribution

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-Freestanding Inserts (FSIs): still largest at apx. 90% of all coupons -In stores (shelf delivered, handouts, scanner delivered) -Direct mail -Newspapers/magazines -In and on-package -Online and mobile

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Redemption rate

answer

??

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Premiums

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Articles of merchandise or services offered as a gift to induce action by consumers, retailers, and the sales force Example: cereal box prizes (free car toy and if you got all the colors you win a free Ford Fusion)

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Benefits of premiums

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-Represent versatile promotional tools that generate trial purchases, encourage repeat purchasing, and reinforce brand images -Provided to increase consumer brand loyalty and to motivate new purchases

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Self-liquidating premium

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A sales promotion technique that pays for itself, in which customers send money and vouchers or proof of purchase to obtain a premium gift -The value of the premium is greater than the price of the product -The idea is that you'll sell enough with the deal to cover the costs of the gift

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Price-offs

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A reduction in a brand's regular price -basically a discount

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Marketing objectives of using a price off

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-To reward present brand users -To get consumers to purchase larger quantities -To establish repeat purchases -To ensure promotion dollars reach consumers -To obtain off-shelf display space -To provide the sales force with incentives

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Bonus pack

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Extra quantities of a product that are offered for the same price Example: fabric softener offered w/ laundry detergent

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Marketing objectives of using a bonus pack

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-Offer an alternative to price-off deals -Will be purchased by regular customers who would have purchased the brand anyways -Load current users; thereby removing them form the market

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Sweepstakes and contests

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-Primarily to enhance a brand's image -Sweepstakes are preferred b/c they are relatively inexpensive and simple to execute -Sweeps: purely based on chance, no need for proof of purchase -Contest: Solve a specific problem, may need proof of purchase

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Games

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-Provide an instant reward -Create excitement, stimulate brand interest, and reinforce brand loyalty -Must avoid chaos that threatens the consumers confidence

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Rebates (aka refunds)

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The practice in which manufacturers give cash discounts or reimbursements to consumer who submit proof of purchase Example: fill out survey after purchase and get discount next time? 20% off next purchase if you spend $200 or more right now?

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Marketing objectives of using rebates

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-Offers consumers delayed rather than immediate value, b/c the consumer has to wait to receive the reimbursement -Not redeemed = phantom rebate -Can attract switchers from competitive brands

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Continuity Promotions

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Reward consumers repeat purchasing behaviors -Cement long-term relationship with the consumers Example: Loyalty programs, point programs, frequent-flyer program

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Various Consumer Sales Promotion Tools

answer

???

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Public Relations

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An organizational activity involved w/ fostering goodwill between a firm and all of its various publics -Employees, suppliers, stockholders, governments, the public, labor groups, citizen action groups, and consumers

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5 Functions of Public Relations

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1. Advise and counsel (political campaigns, damage control) 2. Publications (lots of writing, can be internal or external) 3. Publicity (positive contact w/ the media) 4. Corporate image advertising (Ex: J&J or P&G) 5. Monitoring public opinions through research and customer feedback

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Marketing Public Relations (MPR)

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Involves an organization's interactions with actual or prospective customers -Increasingly important MARCOM function for both B2C and B2B firms -Are more credibly and less expensive in comparison with advertisements

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Proactive MPR

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-Dictated by a company's marketing objectives -Offensively oriented and opportunity seeking -Credibility accounts for the effectiveness -On the offense

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Forms of proactive MPR

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-Product releases -Executive statement news releases -Feature articles

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Reactive MPR

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-The conduct of public relations in response to outside influences -Attempt to repair company's reputation, prevent market erosion, and regain lost sales -Quick and positive responses are imperative -On the defense

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Forms of reactive MPR

answer

-Product recall -Crisis management -Usually product failures/defects Example: Blue Bell, Domino's video, Walmart fat girl costumes, BP oil spill

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Word-of-Mouth (WOM)

answer

Informal communication among consumers about products and services. -Is both complex and difficult for brand managers to control

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Preventing Negative WOM

answer

Manufacturers: provide detailed warranty and complaint procedure information on labels or in package inserts Retailers: -employees w/ + attitudes -Store signs and inserts in monthly billings -Offer toll-free numbers/ e-mails

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Viral Marketing

answer

Techniques that use social networks to increase brand awareness or other marketing objectives , through a self-replicating, viral process, similar to the spread of a virus

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Buzz Creation

answer

Is the systematic and organized effort to encourage people to talk favorably about a particular brand—either over the fence or online—and to recommend its usage to others who are part of their social network.

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Buzz Creation & Viral Marketing - Proactive Efforts Used

answer

-Guerrilla marketing -Diffusion marketing -Street marketing -Anecdotal evidence? Examples: Halo leak, Taco Bell Quesalupa reveal at superbowl (taco emoji)

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What makes viral marketing viral?

answer

-Can be compared to the spread of an epidemic -There must be a tipping point or moment of critical mass when enough people are "infected"

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Rules for social epidemics

answer

-Law of the few -Stickiness factor -Power of context

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Law of the Few

answer

It takes only a few well-connected people to make things happen -Celebs

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Stickiness Factor

answer

The nature of the message (emotions) Example: Budweiser puppy commercial

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Power of Context

answer

Doing something when the conditions are just right Example: real time marketing with Oreo - you can still dunk in the dark

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Sponsorship Marketing

answer

Sponsorship is an exchange between a sponsor [such as a brand] and a sponsee [such as a sporting event] whereby the latter receives a fee and the former obtains the right to associate itself with the activity sponsored Example: Pepsi sponsors super bowl halftime show, Bud Light sponsors super bowl

question

Why have we seen a growth in sponsorships?

answer

-Avoid advertising clutter -Gain the approval of various constituencies -Can enhance brand equity by increasing consumer awareness/enhancing brand image -Enable marketers to target their marcom efforts to specific geographic regions and lifestyle groups

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Event Sponsorship

answer

A form of brand promotion that ties a brand to a meaningful athletic, entertainment, cultural, social, or other type of high-interest public activity Example: Nascar

question

Factors in selecting sponsorship events

answer

-Image match-up -Target audience fit -Sponsor misidentification -Clutter -Complement other marcom effects -Economic viability

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Cause-Related Marketing (CRM)

answer

Entails alliances that companies form with nonprofit organizations to promote their mutual interests -Based on the idea that a firm will contribute to a cause every time the customer undertakes some action that supports the firm and its brands Example: NFL and Susan G. Komen

question

Benefits of Cause-Related Marketing

answer

-Enhances corporate or brand image -Thwarts negative publicity -Generates incremental sales -Increases brand awareness -Broadens customer base -Reaches new market segments -Increases sales at retail level

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Requirements For Successful Cause-Related Marketing

answer

-Fit: does the brand naturally relate to the cause? -Accountability: Will the CRM yield sufficient ROI or achieve non-financial objectives?

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Qualities Purchasing Agents Value Most in Salespeople

answer

In order: -Reliability/credibility -Professionalism/integrity -Product knowledge -Innovativeness in problem solving -Presentation/preparation

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Qualities Purchasing Agents Value Least in Salespeople

answer

In order: -Supplies market data -Appropriate frequency of calls -Knowledge of competitor's products -Knowledge of buyer's business and negotiation skills (tie at 45.8%)

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Personal Selling

answer

Person to person communication in which a salesperson works with prospective buyers in attempting to determine their purchasing needs to provide a match with his or her company's products or services Example: Dunder Mifflin

question

Personal Selling's Role in the Promotion Mix and IMC

answer

1. Contributes a relatively high level of customer attention 2. Enables the salesperson to customize the message to the customer's specific interests/needs 3. Two-way communication yields immediate feedback 4. Enables a salesperson to communicate a large amount of technical/complex information 5. Greater ability to demonstrate a product's functioning and performance characteristics 6. Frequent interactions permit the opportunity for developing long-term relations

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Attitudes Toward Personal Selling

answer

-Historically held in low self-esteem (deception, false promises, trickery and misrepresentation to persuade) -Popular w/ college students

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Pros of Personal Selling

answer

-Job freedom -Variety and challenge -Opportunities for advancement -Attractive compensation and non-financial rewards

question

Modern Selling Philosophy

answer

1. The sales process must be built on a foundation of trust and mutual agreement 2. A customer-driven atmosphere is essential to long-term growth 3. Sales representatives should act as if they were on the customer's payroll 4. Getting the order is only the first step; after sales service is what counts 5. In selling, as in medicine, prescription before diagnosis is malpractice.

question

Various Selling Activities

answer

-Selling Function -Working with others -Servicing the Product -Information management -Servicing the Account -Conferences/Meetings -Training/Recruiting -Entertaining

question

7 Steps of the Personal Selling Process

answer

1. Prospecting and Qualifying: finding the clients and making sure they're a good fit 2. Pre-approach: ??? 3. Approach: organizing objectives 4. Sales presentation: presenting to the client -- demonstrating, showing solutions 5. Handling objections: ??? 6. Close: confirmation, closing the deal 7. Follow-up: ???

question

High Performing Salespeople

answer

-Represent the interest of their companies and their clients simultaneously to achieve two-way advocacy -Exemplify professionalism -Are committed to selling and the sales process, because they believe the sales process is in the customer's best interests. -Actively plan and develop strategies that will lead to programs benefiting the customer.

question

Characteristics of high sales performers

answer

-The first impression -Depth of knowledge -Breadth of knowledge -Adaptability -Sensitivity (empathy and good listening skills) -Enthusiasm -Self-esteem -Extended focus -Taking risks -Creativity - ?? -Sense of honesty/ethics

question

Green Marketing

answer

A firm's introduction of environmentally oriented products and its undertaking of marcom programs to promote them

question

Objectives of Green Marketing

answer

1. Improve environmental quality (sustainability practices) -Pollution prevention -Water and energy conservation -Recycling -Sourcing (where they get products from) 2. Satisfy customers

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Green Washing

answer

When a company/organization spends more time and money claiming to be "green" through advertising and marketing than actually implementing business practices that minimize environmental impact

question

Green Marketing Initiatives

answer

-Advertisements that promote green products -Environmentally friendly packaging -Seal-of-approval programs promoting green products -Cause and event-oriented marcom efforts that support environmental consciousness -Point-of-purchase display materials that are environmentally efficacious -Direct marketing programs that reduce resource usage by developing more efficient solicitations -Outdoor advertising efforts that reduce the usage of environmentally damaging materials. -Social media campaigns

question

Seal of Approval Programs - What Do They Tell Consumers?

answer

Designed to assist consumers in identifying environmentally-friendly products and brands -Green Seal of Approval and Germany's Blue Angel -100% Recycled Paperboard Alliance -McCormick example??

question

3 Types of Ads That Promote Green Products

answer

1. Addressing the relationship between product/service and the biophysical environment (Shell) 2. Promoting a green lifestyle (National Parks) 3. Presenting a corporate image of environmental responsibility (Toyota)

question

FTC Green Guidelines

answer

-Qualifications and disclosures should be sufficiently clear and prominent to prevent deception -Claims should make clear whether they apply to the product, the package, or a component of either -Claims should not overstate an environmental attribute or benefit, either expressly or by implication -Comparative claims should be presented in a manner that makes the basis for the comparison sufficiently clear to avoid consumer deception

question

Justifications for Regulation of MARCOM??

answer

-When consumer decisions are based on false or limited information -When benefits realized exceed the costs

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Benefits of the Regulation of MARCOM

answer

-Improved consumer choices -Improved product quality -Reduction in prices

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Costs of the Regulation of MARCOM

answer

-Regulatory compliance -Enforcement costs (FTC enforcement division)

question

Deceptive Advertising vs. Unfair Practices

answer

???

question

Deceptive Advertising - Misleading

answer

There must be a representation, omission, or practice likely to mislead the consumer. -Misrepresentation: An express or implied statement contrary to fact

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Deceptive Advertising - Reasonable Consumer

answer

The act or practice must be considered from the perspective of the "reasonable consumer"

question

Deceptive Advertising - Material

answer

The representation, omission, or practice must be "material," involving a central characteristics of the product important to consumers and likely to influence their choice or conduct regarding a product

question

3 Parts of the Unfairness Definition - What Do They Refer To?

answer

The act or practice (1) causes or is likely to cause substantial injury (e.g., monetary, health/safety) to consumers, (2) which is not reasonably avoidable by consumers themselves and (3) not outweighed by countervailing benefits to consumers or competition." -Not whether the ad practice is immoral, unethical, offends public policy...

question

Food and Drug Administration (FDA)

answer

-Responsible for regulating information on the packages of food, drug, and tobacco products -Responsible for regulating ads for prescription drugs -Requires advertisers to present a balanced perspective when advertising drugs

question

Prescription Drug Advertising

answer

-FTC regulates deceptive and unfair advertising for over-the-counter drugs -FDA regulates ads for prescription drugs in requiring advertisers to present a balanced perspective when advertising drugs

question

Ethics

answer

Involves matters of right and wrong, or moral, conduct pertaining to any aspect of marketing communications

question

Debate Regarding the Ethics of Targeting

answer

Is it ethical to target products and communications efforts to segments that are vulnerable or put at risk by these actions? -Is targeting unethical or just good marketing?

question

Vulnerable Populations

answer

-Children/teens -Disabled -Elderly Examples: Old Joe the Camel, vapes, e-cigs, marketing violent entertainment to kids, food marketing practices and childhood obesity

question

Children and Deceptive Advertising

answer

Children can't distinguish the concept of selling, if it's right of wrong, until the age of 8 -Any ad under the age of 12 is deceptive

question

6 Criticisms of Advertising

answer

1. It's untruthful and deceptive 2. It's manipulative 3. It's offensive and in bad taste 4. It creates and perpetuates stereotypes 5. It persuades people to buy things they don't need 6. It plays on people's fears and insecurities

question

Article 1: Kantar Report on FSI Coupons

answer

Dollar value of FSI coupons offered in 2015 increased 3.7 percent -Fewer pages being distributed, but there are more coupons per page containing higher value offers -Reducing expiration lengths -Shift from food to non-food FSIs -Walmart is #1

question

Article 2: Marketers Beware the Coupon Mom

answer

-Direct impact of coupon bloggers is creating a new awareness about offers -Bad for brand loyalty - all about the deals -Using coupons on sale items = free stuff -Enthusiasts make up 70% of coupon use -Overall redemption is down (moving back up)

question

Article 3: Domino's Nightmare

answer

-Domino's responds to viral employee video -Crisis management PR Things to do: 1. Monitor social media 2. Respond quickly 3. Respond at flashpoint 4. Educate workers 5. Foster a positive culture 6. Set clear guidelines

question

Article 4: Bring on the Buzz -- Charmin

answer

How do easily substituted CPGs create buzz? -Charmin: Enjoy the Go (clean bathrooms at fairs) -Celeb endorsements/sponsorships -Musical in the bathroom -TGT ambassadors team

question

Article 5: Sales Moves Beyond Face to Face

answer

-Shift from expensive field staffs to more *cost-efficient* employees who use phones and computers to reach customers -Outside vs. Inside sales, 1 to 10 ratio

question

Article 6: Time to Crowd Source

answer

Crowd sourcing example: Wikipedia, Yelp Why CSR is disrupting: 1. Increasing supremacy of purpose as a major corporate focus: purpose driven brands perform better 2. The new opportunities to "localize purpose" that technology affords: social media rise = more power for consumers 3. The insatiable consumer appetite for transparency 4. The need for CSR to be grounded in a newfound source of corporate credibility: corporations need to gain back public trust and good will

question

Article 7: Dark Side of Healthy Food to Children

answer

-Marketing any product to children under the age of 12 is deceptive -Until the age of 8, children don't even understand the concept of selling/advertising -Children are especially vulnerable to advertising -All marketing to children is inherently misleading -Marketing branded produce such as Kung-Fu Panda Edamame to children instills the unhealthy habit of choosing food based on marketing cues such as celebrity, rather than on a child's own innate hunger, taste, or good nutrition

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