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January 6, 2018 | Author: Anonymous | Category: Arts & Humanities, Communications, Marketing
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Part 5 Principles: IMC and Total Communication

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

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What are the current trends and practices in planning promotions?



How are various consumer promotions used?



What are the types and purposes of trade promotions?





How do multiplatform promotions—sponsorships and events, loyalty programs, and partnership programs— work?

How are promotions used strategically in marketing in terms of brand building, integration, and effectiveness? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

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 

Sales promotion: increasing the value of its product or brand by offering an extra incentive to purchase it. Designed to encourage action. Sales promotion is primarily designed to motivate people to act by offering incentives.

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The Promotion Marketing Association (PMA) defines sales promotion as: “The media and non-media marketing pressure applied for a predetermined, limited period of time at the level of consumer, retailer, or wholesaler in order to stimulate trial, increase consumer demand, or improve product availability.”

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Accountability 

Managers are under pressure for short-term profits.



Promotions cost less and deliver tangible results.





Evaluation is easy and quick because there is usually an immediate response. It’s easier to compute return on investment (ROI). This is known as payout planning.

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To see how sales promotion can generate positive ROI, go to: www.moonfruit.com Here, the Moonfruit company gave away 10 MacBook Pros as part of a birthday celebration. Participants were required to send out a creative Tweet. The idea exploded on Twitter and generated massive publicity for the company.

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Media shifts 

Traditional media costs have escalated to the point where alternative media must be considered.



Promotions cost less and deliver tangible results.



Global incentive programs have increased dramatically.

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Marketplace changes 

Consumer behavior: shoppers are more likely to switch brands.



Pricing: consumers expect coupons, sales, price promotions.



Market share: increased switching leads to increased market share.



Parity products: promotions can become a tie-breaker in consumer decision making.



The power of the retailer: dominant retailers such as Safeway and Wal-Mart demand promotional incentives.

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Promotional Big Ideas  The Big Idea is just as important for sales promotion as it is for advertising. 



In many cases, the promotion is part of a bigger IMC campaign. The challenge is to come up with exciting, interesting promotional ideas that are involving and capture the attention of the target market.

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1.

Consumer

2.

Trade

3.

Sales Force

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Price Deals 

Temporary price reduction, sale price, or even freebies. 1. 2. 3. 4.



Cents-off deal Price-pack deals Bonus packs Banded packs

Freebies can be a killer if the company doesn’t adequately predict consumer response!

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The Billings “Trailhead” campaign used weekly drawings with the winners receiving caps, as well as dinner and two nights at the Crowne Plaza Hotel for the grand prize winner.

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Refunds and Rebates Marketers offer to return a certain amount of money to the consumer who purchases the product, or a coupon to encourage repeat use. Sampling Allowing the consumer to try the product or service. Examples: in-store, mailed, dentist office, or newspaper.

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Premiums A premium is a tangible reward for a particular act. It works by adding value to the product. There are four variations:

Store premiums: given at retail site In-pack premiums: inserted in the package On-pack premiums: attached to package Container premiums: the package is the premium

1. 2. 3. 4.

A self-liquidator premium requires that a payment be mailed with proof of purchase.



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Coupons Provide a discount on the price of the product. ◦ Retailer: redeemable only at their outlet. ◦ Manufacturer: redeemable at any outlet carrying the product.

Cellfire is a company that sends digital coupons via text messages and loyalty cards.

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Contests and sweepstakes

◦ Create excitement by promising “something for nothing” and offering impressive prizes. ◦ Contests are based on skill or ability. ◦ Sweepstakes are based on luck.



Specialties

◦ Presents the brand’s name on something that is given away as a reminder. ◦ Examples: key chains, pens, calendars, tote bags, coffee mugs.

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Promotional media 

These can include: ◦ Print ◦ Broadcast ◦ Online

Frontier Airlines “favorite animal” contest used the Internet to increase online purchase of flights.

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Promotional campaigns 



Special promotions are usually approached as a campaign because they involve a variety of media and reach many stakeholders. For an example, check out the “The Inside Story: The Intersection of the Movie and Promotion Industries” in this chapter.

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Awareness



Trial



Maintain or increase market share



Brand reminder

◦ The first step in consumer decision making. ◦ Get the right people involved with the product through sampling, price deals, coupons, and rebates. ◦ The idea is to convince people to switch. ◦ Price deals work with low-loyalty products. ◦ Characters associate the brand with the character. ◦ Remind customers of positive experience with ad copy, specialty items, and thank-you gifts. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

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These kits were sent by Kuni Automotive to the smart car company to win dealerships in three cities.



Trade refers to all involved in the channel of distribution including buyers, brokers, distributors, wholesalers, and others. Usually directed at distribution channel members. This is known as channel marketing.

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Retail (dealer) kits ◦ Materials that support retailer’s selling efforts or help representatives make sales calls. ◦ They could contain product spec sheets, or ad slicks.



Trade incentives and deals ◦ A financial reward for purchasing a certain amount of product or supporting a promotion. ◦ Includes special displays, extra purchases, superior store locations, more local promotion. ◦ Retailers get special discounts, free goods, gifts, cash, and advertising allowances.

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Contests

◦ Advertisers can develop contests and sweepstakes to motivate resellers. ◦ Contests are far more common than sweepstakes because they can be more closely tied to product.



Point-of-purchase promotions ◦ Manufacturers design and distribute displays to retailers to draw attention to their products. ◦ Examples: racks, display cartons, banners, signs, moving parts, lights, action.

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Trade Shows and Exhibits Companies in the same industry gather to present and sell merchandise and demonstrate products.

Nintendo launched its Wii game with demonstrations at entertainment and video game trade shows.

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The two primary roles for a trade promotion: 1. Stimulate in-store merchandising or other trade support. 2. Create excitement among those responsible for selling the product.



Trade promotions are also used to: ◦ Manipulate wholesalers’ and retailers’ inventory levels. ◦ Expand product distribution to new geographic areas or classes of trade.

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Demand: push-and-pull strategies  Pull strategies: creating or increasing customer demand so product is “pulled” through the channel. 



Push strategies: give channel members reasons to carry products or give them better shelf space so product is “pushed” through the channel. Common push strategy incentives: Bonuses Buying allowances Co-op advertising

Dealer loader Advertising allowances Display allowance

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Attention

◦ PoP displays get attention and stimulate impulse purchases. ◦ PoPs can also complement other promotional campaigns.



Motivation



Information

◦ Contests, trade deals, and other incentives motivate trade/channel members to make sales. ◦ Trade show displays give information about products, allow trade buyers to gather and compare products.

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Some promotions cross over to other areas of marketing and blur the lines between promotion, advertising, and public relations. ◦ ◦ ◦ ◦

Sponsorships Event marketing Loyalty programs Co-marketing or partnership promotions

Let’s take a look at each one…

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Sponsorships

Occur when companies support a sporting event, concert, or charity, either financially or by donating supplies and services.



Companies undertake sponsorships to build brand associations and increase the perceived value of the brand in the consumer’s mind.

As a class:

Read and discuss “A Matter of Practice: Advertising Through Sports” to learn about the growth of sports-related promotions. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

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Event marketing 



Here, marketers link a brand to an event. Examples: ◦ The Jose Cuervo beach volleyball tournament ◦ Wii Fit Plus Experience Game with Target Stores ◦ The Super Bowl, the granddaddy of all events

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Ambush marketing refers to promotional stunts at events by companies that are not official sponsors. Other promotional support might include: ◦ Blimps ◦ Balloons ◦ Inflatables ◦ Skywriting airplanes

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To help promote the opening of the movie Spider-Man, inflatables like this one were placed along buildings in major cities.

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Also called continuity or frequency programs.



Designed to increase customer retention.





Frequent flyer programs, TGI Friday’s “Frequent Fridays” These programs also capture information to use for more targeted promotions and advertising.

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Comarketing involves manufacturers developing marketing communication programs with their main retail accounts, instead of for them.



Cobranding occurs when two companies come together to offer a product.



For example, American Airlines put its logo on a Citibank Visa card.

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With licensing, one company gives another company the right to use its legally protected trademarks and logos on products and in advertising or promotion. Tie-ins and cross-promotions occur when two companies are displayed, advertised, or promoted together to multiply impact.

As a class:

Recall Billings, Montana/Pepsi “Trailhead” rebranding campaign from this chapter. What were its key elements?

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To introduce a new product.



To create brand awareness.



To build a brand over time. ◦ Create affinity between brands and buyers. ◦ Create brand involvement through positive associations.

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Advertising

Promotion



• Creates immediate action. • Added value strategies rely on rational appeals; impulse appeals use emotion. • Adds tangible value to product or service. • Contributes greatly to shortterm profitability.

• •



Creates a brand image over time. Relies on emotional appeals. Adds tangible value to product or service through image. Contributes moderately to short-term profitability.

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Effectiveness is measured by sales volume, response rates, and redemption (coupons, refunds, rebates) rates. Payout planning seeks to produce promotions that increase sales and profits. Promotions can deliver sales but they must be well planned and executed in order to enhance the brand’s reputation.

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In Chapter 18, we will:  



Wrap up our discussion of IMC. Introduce various specialized areas of marketing communication. Reinforce the idea that all the tools presented thus far must work together to create a consistent and coherent brand image.

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“Consumers Vote Frontier the Winner”  Frontier’s “Denver’s Favorite Animal” campaign proved to be a winner. 



Fans engaged in the democratic process in a mock election, posting more than 4,000 entries.

Web traffic was up more than 50 percent over the same period in the previous year.

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“Consumers Vote Frontier the Winner” Key lessons:  To reach the marketing and campaign objectives, advertisers must be willing to take risks. 



Sales promotions must be consistent with the brand’s personality, and deliver on brand promise.

As a class: What others can you think of? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

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