Sales Promotion

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Sales Promotion

• What is the difference between Promotion,
  Advertising, Publicity, and Personal Selling,
  Direct Marketing?

2
Advertising

• paid communication from a company to the public.
  It communicates messages about a product, service
  or company that appears in mass media such as
  television, radio and magazines.

3
Personal Selling

• direct communication between a company and
  consumers. It is usually done in person but
  sometimes over the phone.

4
Direct Marketing

• direct communication between a company and an
  individual customer other than face-to-face
  personal selling.

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Sales Promotion

• short term incentive aimed at increasing the
  purchase of a product or service. Where
  advertising says buy our product, Sales
  promotion says Buy it now!

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Publicity

• publicity is a non-paid for positive or negative
  media coverage.

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Public Relations

• is an organized effort to present a positive
  image of the company or its products in
  non-advertising communications. Readers will
  believe a 3rd party more easily.

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Types of Sales Promotions

• Coupons
• Premiums
• Contests
• Sweepstakes
• Sampling
• Bonus pack
• Rebate
• Point of purchase (POP)

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Contests and Sweepstakes

• Award a prize to a select number of entrants
• Contests are more skill based while sweepstakes
  are more luck based
• Canadian law prohibits exchanging money for a
  chance to win a luck based game (This is
  primarily called gambling and is controlled by
  the provincial governments)
• Companies get around this using a skill testing
  question
• They also offer a no purchase necessary option
  for non-buyers. (There are usually barriers to
  this type of entrance though mail in, fax in,
  fill out more forms, etc.)
• By having the contest winner produce some sort of
  skill or knowledge, they can claim that the
  sweepstake is actually a contest

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Contest/Sweepstakes continued

• Two fold purpose of contests (1) Promote new or
  existing products, (2) gain customer information
  for company database
• Key idea People like to receive something for
  nothing
• Used for both products and services e.g., Visa
  is running a contest where you can get your
  monthly bill paid off by Visa. All you have to do
  is use your Visa card.

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Contests dont always work

• Northwest Airlines offered the use of one of
  its jet for a round trip to Florida and 3 nights
  accommodations for the winner of their contest
  and 92 of his/her friends. Unfortunately,
  winnings are taxable in the U.S. and the winner
  did not want to pay the taxes on the winnings.
  Northwest offered 15,000 to offset the loss
  however, these winnings were taxable too. The
  winner forfeited the trip and decided to settle
  for a smaller cash prize.

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Refunds and Rebates (Trial Offers)

• Refund return of the full amount of money
  tendered by the customer
• Rebate returns a portion of the money tendered
  by the customer
• How are they used Refunds for trial offers
  Rebates to promote the sale of other company
  products, or the sale of the purchase product

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• Examples Rebates on Computer Hardware
  (Printers), website that gives you the best
  purchase price for items, services cash back if
  not satisfied
• Goal of
• Trial offers let you try the product first hand
  most people wont go through the trouble of
  sending it back unless they are really
  unsatisfied.
• Rebates future sales rebates on next item
  purchased
• Both allow companies to generate mailing lists

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Coupons

• Document that grants the person a reduction in
  the price of a specific product or service (has a
  face value, but not a cash value)
• Where do you obtain coupons from
• Newspapers (or any print)
• On-line
• Flyers (Mail)
• At a stores cash register/entrance
• Displays in stores
• Cash register receipts
• Purchased coupon booklets

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Coupons continued

• Redemption rate number of coupons issued
  compared with the number of coupons used
• What would affect the redemption rate?
• Face value
• Ease of use
• Availability/knowledge of coupon

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So many coupons how to make yours stand out?

• Put coupons right on product (buy and save
  immediately, future sales)
• place where customers can find all the coupons
  redeemable in the store
• Computerized cash registers that can check the
  bar codes of the purchases and print out coupons
  that apply to purchases (or similar purchases
  e.g., a person buying a razors may get a coupon
  print out for shaving cream)
• Example Boston Pizza gave out fortune cookies to
  its customers when promoting their expansion into
  Taiwan. One in every ten cookies had a coupon for
  a free pizza or soft drink

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Samples

• Offering in whole or part a product or service to
  the customer free of charge
• Good for promotion of new products or improved
  products
• Better at point of purchase than in mail or
  delivery
• Works well with other forms of promotion e.g.,
  sample a food at a grocery store and have coupons
  at the sample table so that customers get a deal
  on the purchase
• Examples Pepsi Taste Test (Market Research in
  form of survey but also a sample), Costco (get
  an entire meal by walking around sampling
  products), Shoe cleaner, eye glasses cleaner
  (just soap), window cleaning (will clean one
  window)

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Premiums and Self Liquidators

• Promotions that allow people to acquire something
  by purchasing something else
• Premiums free product or service offered after
  purchase
• Self-Liquidator a product or service offered
  after purchase at a substantially reduced price

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Premiums and Self Liquidators Examples

• Liquor Store get a small bottle of Jack
  Daniels when you purchase a big bottle of
  Baileys Irish Cream
• Air Miles Cards, buy a coke and keep the mug,
  Coffee cards, store credit cards, skate
  sharpening (buy five get the sixth one free)
• Good for advertising as many premium (giveaway
  items) are hats, shirts, bags, etc. with the
  company logo on it

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Bonus Packs

• When a product offers and increased quantity of
  said product
• Toothpaste get 25 more
• Soap buy five bars get the sixth one free
• Services? (Rent our car for two days and the
  third day is free dont have to come back or
  make another purchase to use the day like in a
  premium)