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Sales Promotions

by: Leticia Notetaker

Sales Promotions ADV 3008

Leticia Notetaker

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These notes cover the similarities and differences between price incentive and added values sales promotions.
Principles of Advertising
Barry Solomon
Class Notes
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This 4 page Class Notes was uploaded by Leticia Notetaker on Saturday March 19, 2016. The Class Notes belongs to ADV 3008 at Florida State University taught by Barry Solomon in Summer 2015. Since its upload, it has received 39 views. For similar materials see Principles of Advertising in Advertising at Florida State University.


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Date Created: 03/19/16
Price Incentive Sales Promotion  Integrated Marketing Communication o A management concept designed to make all aspects of marketing communication work together as a unified force o Advertising, sales promotions, & public relations  Sales Promotion (not advertising) o A direct inducement which offers an extra value or incentive for the product to the sales force, distributors, or the final consumer with the primary objective of creating an immediate sale  Incentive to behave in a certain way; short term behavior oriented o Advertising vs. Sales Promotion  Creates an image over time, long term  Relies on emotional appeals; advertising to the heart, sales promotion usually dealing with price  Contributes somewhat to profitability, creates demand; long term profitability  Adds intangible value; changes perception, not the actual product o Sales Promotion vs. Advertising  Creates immediate action, short term  Rational appeals; BOGO, 20% off  Contributes significantly to short term profitability; sales promotions last a short time  Adds tangible value, more for your money; buy 1 get 3 o Coordinating Promotions  Awareness before promotion  Speak with one voice; keep styles, target market, ec the same  Behavioral Learning o Future behavior is determined by reinforcement accompanying past behavior; ex training a dog o Promotional tools act as reinforcers along with product performance (primary reinforcement) to increase the profitability of repeat purchase  Ppl won’t take advantage of a promotional incentive if they don't like the product  Promotions can't save bad products  Shaping o The process of learning a complex behavior by learning a series of successive approximations of the final behavior o Errors in implementation  Improper fading of the incentives  Overuse; ppl won't buy a product at regular price bc they are accustomed to buying it on sale (conditions the shopper)  Price Oriented Promotional Tools o Samples  Product given to consumer free of charge  Opportunity to try the product before making a purchase  Eliminates financial risk & inconvenience o Samples are effective when  A brand is clearly superior; give it away, acting on promotion vs. Just stating it  Product comes in limited varieties; many options to choose from, makes it easier to try samples  Purchase cycle is short; many opportunities to use product  Attitudes or behaviors must be created or changed; expensive bc companies are giving it away  Change the way ppl perceive the product, ex test drives  Coupons o Certificates presented to a dealer that give the bearer a stated savings on the purchase of a product o Likely users are current users of the product, already know what they're getting  Retains current users, keep buying the brand  Encourages brand switching, want to attract non loyal shoppers  Increase in-home inventory, long term purchase; increases the amount of product a customer has at home  Lengthens purchase cycle, cheapens due to consumer 'shaping'  Money Refunds/Rebates o A partial refund following a purchase, usually higher priced items (automobile, electronics)  Consumer purchases product, mail in proof of purchase, refund sent at a later date (6- 8 wks.)  Redemption problems o Delay of reinforcement, society wants things now  Decide between paying less now or getting money later o Effort required, fill out forms, wait for mail o Cheapens value o Stimulates short term action Added Value Sales Promotion  Added Value Promotions o Product is sold at full price, customers get more for their money, doesn't reduce price/value ratio  (ps4 coming with a $50 gift card, ps4 same price but customer feels like they're getting more) o Premium - an extra item offered at a low price or free as an extra  Gives you more w/o charging less; gift card with tire purchase  Encourage brand switching, trade up a larger size (buy a large instead of a medium & get free breadsticks), increase repeat purchase, put a long term message in front of the consumer  Methods of distribution  In a package; buy cereal, toy in box  In store; come into the store, get free gift wrapping  Package itself; souvenir cup  Mail & Online  Sweepstakes o A game where all participants have an equal chance of winning without cost to enter  Effectively build short term sales, increased engagement & awareness o Odds of winning  Small prize winning is more frequent, major prizes are  Lottery o Sweepstakes but with a charge to enter o Illegal for businesses bc they were historically ran by organized crime o Donations from non-profit organizations  Contest o Winners selected based on skill &now charge to enter  Promotions to Retailers o More money spent than on consumer promotions  Objectives; retail incentive to push vs. pull promotions,  Push the product on to the shelves vs. pulling them off for the consumer  maintain or increase distribution  maintain or expand shelf space; more space or better placement in the isle  Preempt competition  Change consumer purchase patterns making the product more available o Types of retail promotions  Buying allowance - manufacture gives discount (largest)  Temporary price reductions ( incentives to buy more advil); everyone wins  From manufacturer to the retailer (2nd largest)  Advertising allowances - co-operative advertising  Payments by the manufacturer to the retailer  Funding of the retailer's advertising of the product  Contests; between retailers to see whole can sell the most of a product  Sweepstakes; advertise about new packaging & be on the look out for it by having a sweepstakes  Points of Purchase (P.O.P.)  Promotional materials placed at point of purchase  More likely to grab a product & when you are at the store ready to make a purchase  Types of P.O.P.  Outside signs, window displays, counter displays, display racks, banners, posters, shelf talkers  P.O.P. Objectives  Increase consumer learning (table tents)  Increase purchase behavior (see a brand at the end of an isle, more likely to be seen & bought)  Low cost production & implementation; don't cost as much as typical type of advertising  Ease of evaluation; look a sales levels before & after the promotion  Good P.O.P. for Retailers  Monetary incentive; reduce price, ad allowance  Tied to other items; tie peanut butter to jelly or bread to help increase sales  Easy to set up; likely for retailer to set up, quicker & cheaper


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