Promotions

1
Promotions

• Concepts and Strategies

2
Topics

• Promotional Mix
• Types of Promotions
• Sales Promotions
• Public Relations

3
Concepts

• Promotion
• Any form of communication a business uses to
  inform, persuade or remind people about its
  products
• Also used to modify the image of an organization
• Product
• Institutional

4
Concepts

• Product Promotion
• Convince customers to buy one product over
  another
• Explain benefits or features
• Lead to sales point
• Answer questions or assuage fears
• Introduce new product

5
Concepts

• Institutional Promotion
• Create a favorable image
• While not directly selling a product establishing
  this image may increase sales
• Websites are a good example
• Provide news, answer questions and contain
  product information
• www.pepsi.com

6
Promotional Mix

• Businesses must decide on the perfect blend of
  the different types of promotions
• Personal selling
• Advertising
• Sales promotions
• Public relations

7
Types of Promotions

• Personal selling
• Requires direct interaction with customers
• Most expensive form of promotions
• Typically the final step as this will result in a
  sale or return to the draft table

8
Types of Promotions

• Advertising
• Any paid form of presentation promotion from an
  identified sponsor
• One-way, non-personal
• Over 200 billion spent every year
• Superbowl is typically the most expensive time

9
Types of Promotions

• Sales promotion
• Used to stimulate purchasing inform customers
• Coupons, sales, sweepstakes, trial periods and
  give-aways are examples

10
Types of Promotions

• Public Relations
• Any activity done to enhance the image of a
  company
• Publicity
• Placing positive and newsworthy information into
  the media

11
Publicity

• Very important tool because of cost nothing
• Often seen as more objective than advertisements
• Principal function is to enhance publics view of
  company
• Scholarships, donations, and cultural events

12
Publicity

• Cannot be controlled by the company
• Media outlets will select any story they chose
• If it bleeds, it leads
• Negative stories will always reach further and
  last longer

13
Coordinating Promotional Mix

• Promotions need to complement one another on a
  local and national level
• All four parts must blend together seamlessly
• Ads raise awareness, PR establishes image, sales
  promos encourage purchase, Reps close the deal

14
Promotional Budget

• Marketing department is in charge of developing
  and allocating budgets
• No exact science as results are rarely the same
  twice

15
Push - Pull

• Push Concept
• Gearing promotions toward retailer to push a
  product on a distributor.
• Best for products with low brand identity

16
Push - Pull

• Pull Concept
• Gearing promotions toward consumers to put
  pressure on retailers to carry a certain brand
• Using push-pull in combination puts extra
  pressure on retailers to carry brands

17
Sales Promotions

• Short term incentive to encourage sales
• Directed toward manufacturers, retailers,
  wholesalers and customers
• Trade
• Consumer

18
Trade Oriented

• B2B
• More money spent on promotions to other
  businesses than to consumers
• Slotting Allowance
• Buying Allowance
• Trade shows
• Sales Incentives

19
Trade Oriented

• Slotting Allowance
• Cash paid to retailers for shelf space
• Range from 1000 - 100,000
• Also pays for discounts, poor performance, and
  store displays
• Buying Allowance
• Discount given to encourage buying in larger
  quantities

20
Trade Oriented

• Trade shows conventions
• Allows for a widely publicized event to display
  old and new merchandise
• Sales Incentives
• Rewards given to individuals, sales force, or
  entire company for meeting quota
• Attempts to increase sales through motivation

21
Consumer Oriented

• More than 50 of all households take advantage of
  some form of promotion
• Premiums
• Incentives
• Product samples
• Tie-ins
• Product placement

22
Consumer Oriented

• Premiums
• Low cost items given at a discount or free
• Hopes to switch brands or build loyalty
• Good products typically sell themselves, but
  competition may require differentiation

23
Premiums

• Basic rules
• Low cost
• Add value
• Negate price issues
• Differentiate product
• Create immediacy

24
Premiums

• Types
• Coupons
• Most popular
• Billions printed, but less than 3 redeemed
• Factory packs
• Prizes in cereal
• Traffic builders
• Very low cost items given to attendees of special
  events
• Coupon plans
• Exchanging labels or the like for prizes

25
Consumer Oriented

• Incentives
• Higher priced products given through contests,
  sweepstakes rebates
• Contests typically require skill
• Sweepstakes, by law, can be entered without
  purchase

26
Consumer Oriented

• Product samples
• Very important for new products
• Free trial sizes mailed or given to customers at
  POS
• Promotional Tie-ins
• Combines resources of multiple retailers
• Popular with movies and fastfood

27
Consumer Oriented

• Product placement
• Placing items in media outlets for great exposure
• Hopes to increase public awareness of product
• Helps to defer production costs for media chosen,
  i.e. movies, TV, video games

28
Consumer Oriented

• Visual merchandising
• Loyalty marketing programs
• Frequent customer programs
• Popularized by airlines in the early 80s
• Based on cumulative discounts

29
Public Relations

• Basic goal is to create and manage publicity
• Always attempt to have company viewed in best
  possible light
• Dealing with the customers, community and
  employees in such a way as to best control flow
  of information

30
Public Relations Nightmares

• Patriots
• Roger Clemens
• The Jacksons
• Super-Size Me