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1、Sales PromotionChapter 10Learning objectivesWhats the role of sales promotion in a companys IMC program?What are the various objectives of sales promotion programs?How can the types of consumer and trade promotions help to pull consumers into the store and push products onto the shelves? How sales p
2、romotion is coordinated with ads?Whats the potential problems in use of sales promotion?10 - 110.1 Sales promotionSales promotion:A marketing communication function that offers a tangible added-value designed to motivate and accelerate a responseExtra motivationAcceleration toolTarget to different p
3、arties 10 - 2Corn Flakes Premium Offer10 - 310.1.1 Sales promotion vehiclesSamplesCouponsPremiumsContests/sweepstakesRefunds/rebatesBonus PacksPrice-off dealsTrade allowancesTrade showsTrade contestsTrade incentivesConsumer promotionTrade promotion10 - 410.1.2 Reasons for sales promotion increasesDe
4、clining brand loyaltyIncreased promotional sensitivityBrand proliferationFragmented consumer marketsShort-term focus of marketersIncreased accountabilityCompetitionClutterGrowing power of retailers10 - 510.1.3 Sale promotion concernsNegative impact of sales promotionsFewer dollars to build brand equ
5、ityEncourages consumers to purchase on the basis of priceDetracts from the value of the brand10 - 6Consumer franchise-building promotionsCommunicate distinctive brand attributesBuild long-term brand preferenceDevelop and reinforce brand identity“Frequency” programs promote repeat purchaseSweepstakes
6、 & contests build equity, increase involvementPromotional objectivesTechniques and practicesPremium offers that reinforce brand image & build equity10 - 7Nonfranchise-building promotionsAccelerate the purchase decision processGenerate an immediate sales increaseObjectivesDo not identify unique brand
7、 featuresDo not contribute to brand identity or imageLimitations10 - 810.2 Consumer promotionsCouponsPremiumsContests and sweepstakesRefunds and rebatesSamplingBonus packsPrice-offs10 - 9Objectives of consumer promotionsIncrease consumption of an established brandTarget aspecific segmentEnhance IMC
8、efforts and build brand equityDefend (maintain) current customersObtain trialand purchase10 - 10Targeting specific consumers10 - 1110.2.1 CouponsRedemption rate (0.85%)The oldest and most widely used sales promotion tool85% of consumers use coupons; 21% use them regularly10 - 12Print mediaFSI (88%)D
9、irect mail On- or in-packageIn-storeDigitalEmployee deliveredF I G U R E 1 2 . 3Methods of Distributing Coupons10 - 13FSIs are the Most Popular Coupon Type10 - 14Types of CouponsInstant redemptionLead to trial purchasesBounce-backEncourages repeat purchasesScanner-deliveredEncourages brand switching
10、Cross-ruffing10 - 15Coupon Redemption Rates10 - 16Coupons are Available Electronically10 - 17Pros and Cons of CouponsAdvantagesDisadvantagesAppeals to price sensitive consumersCan offer discounts without retailer cooperationEffective way to induce trial of productsDefends market share and encourages
11、 repurchaseOften used by loyal consumers who would purchase anywayMisredemptionand counterfeitingHard to tell how many consumers will use them and whenLow redemption rates and high costs10 - 1810.2.2 PremiumsAn offer of an item, merchandise, or service, free or at a low cost, that is an extra incent
12、ive for customersTypes of PremiumsFree: Only requires purchase of the productFree-in-the-mailIn- or on-packageSelf-liquidating: consumer required to pay some or all of the cost of the premium10 - 19Match the premium to the target marketCarefully select the premiumAvoid fads, try for exclusivityPremi
13、um reinforce the firms product and imageIntegrate the premium with other IMC toolsEspecially advertising and POP displaysDont expect premiums to increase short-term profitsF I G U R E 1 2 . 5Keys to successful premium programs10 - 2010.2.3 Contests and sweepstakesSweepstakesContestPromotion where wi
14、nners aredetermined purely by chanceWinners chosen by random selection from pool of entries or generation of a number to match those held by game entrantsConsumers compete for prizes or money on the basis of skills or abilityWinners determined by judging entriesor ascertaining which entry is closest
15、to predetermined criteriaCannot require proof of purchaseas a condition for entry10 - 21Pros and cons of contests and sweepstakesAdvantagesDisadvantagesGet consumer to e involved with the brandGenerate excitement over a brand and attract attention to advertisingattention to advertisingBuild brand eq
16、uity among specific target audiencesNumerous legal problemsOverwhelm the ad or brandUse by professionals or hobbyists10.2.4 Refunds and RebatesOffer to return some portion of the product purchase price after supplying some sort of proof or purchaseHassle to redeemNow expected by consumersRedemption
17、ratesLess than 30% overall65% for rebates over $5010.2.5 SamplingDelivery of free good or serviceBusiness-to-business to prospectsService samplingConsumer survey33% who tried a sample made purchase during shopping trip58% would buy product again25% bought sample instead of intended brand10 - 24Sampl
18、ing MethodsResponse samplingDirect samplingIn-storeCross-ruff sampling Media sampling Professional samplingSelective samplingMethods10 - 25Samples are distributed with newspapers10 - 26Armor All Uses On-Package Samples10 - 27“Free Fryday” Promotion10 - 28Website promoting samples10 - 29The products
19、are of relatively low unit valueThe product can be broken into a small piece or size that reflects the full features and benefitsThe purchase cycle is relatively short Sampling Works Best When10 - 3010.2.6 Bonus PacksExtra product in special packageTypical bonus20% to100% percentMost common30% bonus
20、10 - 31Increase usage of a productMatch or preempt competitionStockpile the productDevelop customer loyaltyAttract new usersEncourage brand switchingReasons for Using Bonus Packs10 - 3210.2.7 Price-OffsTemporary price reductionBenefits of price-offsExcellent for stimulating salesEntice trial purchas
21、esLower financial riskEncourage brand switchingEncourage stockpilingProblems with price-offNegative impact on profitsEncourages greater price sensitivityPotential negative impact on brand image10 - 3310.2.8 Planning Consumer PromotionsPromotion-pronePrice-sensitiveBrand-loyalBrand-preferredSupport brand image and position strategyConsider target audience10 - 3410.3 Tra
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