REVIEW QUESTIONS
17-4. Define sales promotion and explain how it differs from other marcom areas.
When a marketer increases the value of its product or brand by offering an extra
incentive to purchase it, the marketer is creating a sales promotion. In most cases, the
The Promotional Marketing Association provides the following definition: “The
media and non-media marketing pressure applied for a predetermined, limited period
Sales promotions differ from other marcom tools in that it is primarily designed to
17-5. Why is sales promotion growing?
In many marketing savvy companies, sales promotion budgets are larger than
advertising budgets. Until the early 1980s, advertising was the dominant player, but
Most U.S. companies focus on immediate profits and sales promotion satisfies that
drive. Companies invest more money in sales promotions because they want quick
results. The pressure for short-term profits leads to bigger sales promotion budgets.
Also, sales promotions are relatively easy to evaluate in terms of their impact on sales
Networks have raised their advertising prices, while their share of prime-time
television viewers has dropped dramatically. The proliferation of media and
Additional reasons for the growth in sales promotion can be explained by shifts in the
marketplace. Shoppers today are better educated, more selective, and less loyal to
brand names than in the past, which means they are more likely to switch brands.
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Consumers have come to expect constant short-term price reductions, such as
coupons, sales, and price promotions. In most industries, the battle is for market share
rather than general product growth. Sales promotion encourages people to switch
17-6. Explain the three audiences for sales promotion and the two primary
categories used to reach the third audience.
The most common sales promotion strategies target the three audiences of
The third category, sales force promotions, includes two general sets of promotional
activities directed at the firm’s salespeople to motivate them to increase their sales
levels. The first set of activities includes programs that better prepare salespeople to
17-7. What are the primary objectives that consumer promotions can deliver?
Consumer promotes can help to create awareness, stimulate, trial, maintain or
The first challenge is to create awareness of the brand, which is a real strength of
advertising and the first step in consumer decision making. However, sometimes
Creating awareness will only take the product so far, however. Consumers must also
perceive the brand as offering some clear benefit compared to the competition. Sales
promotion does this by arranging for experiences such as special events where people
Sales promotion has other tools that lead to trial such as sampling. Sampling is an
effective strategy for introducing a new or modified product or for dislodging an
entrenched market leader by enticing potential users to try the product. As a general
rule of thumb, retailers and manufacturers maintain that sampling can boost sales
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Another way sales promotion can motivate people to try a new product is to offer a
price deal. These price deals are usually done through coupons, refunds, rebates, or
Coupons mainly encourage trial, induce brand switching, and reward repeat business.
The main advantage of the manufacturer’s coupon is that it allows the advertiser to
In addition to encouraging trial of a new product, another purpose of price deals is to
convince prospective users to switch from an established competing brand. A price
To maintain a brand’s presence, increase its market share, or accomplish
counter-competitive actions, marketers use promotional tools such as coupons,
In addition to new product launches, promotions are also used at the reminder stage.
This means that you change advertising copy to remind customers about the positive
experience they had with the product and use sales promotions to reinforce loyalty
17.8. What are the key objectives of trade promotions?
Trade promotions are directed at distribution channel members also referred to as the
trade. This includes buyers, brokers, distributors, wholesalers, dealers, franchisees,
and retailers. Trade promotions are designed to create a high level of excitement
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17-9. List the primary tools of consumer promotions and trade promotions.
Consumer promotion tools:
Price deals, such as cents-off deals, prize packs, and banded packs
Coupons
Trade promotion tools:
Point-of-purchase displays
17-10. What media are used to communicate about sales promotions?
Sales promotions can be delivered using print, broadcast, and online media. Direct mail
has dominated the delivery of special promotions but much of that has moved online.
The Internet is particularly useful for distributing coupons, inviting participation in games
17-11. Why are sponsorships and events used by marketers?
Sponsorships occur when companies support an event, such as a sporting event,
concert, or charity, either financially or by donating supplies and services. Event
Companies undertake sponsorships to build brand associations and to increase the
perceived value of the brand in the consumer’s mind. The important thing is that the
event must project the right image for the brand. Companies that use sponsorships
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Marketers use events, such as a tour or appearance of the product or its spokesperson
at a mall or sporting event, to gain the attention and participation of people in the
17-12. Define loyalty programs and explain why they are useful.
A loyalty program, also called a continuity or frequency program (such as airline frequent
flyer programs), is a promotion to increase customer retention. Typically, the higher the
17-13. How and when are partnership promotions used?
Partnership programs, such as co-branding, licensing agreements, and cross promotions,
DISCUSSION QUESTIONS
17-14. You have been named promotion manager for Maybelline, a well-known brand of
cosmetics. You know the brand has been successful in using sales promotion plans lately,
but you are concerned about how to use promotions successfully without harming the
brand. How is sales promotion considered weak in building and maintaining a brand, and
how can it be used to strengthen a well-known brand? What kind of promotions would
you suggest for maintaining and strengthening this brand franchise?
Your new responsibility presents an excellent case study in the strengths of
advertising and of promotion and the need to integrate the two. Cosmetics in general
Although a strong case exists for the use of brand-building advertising, do not reject
promotion! It is important to consider promotions that stimulate trial, such as
You can capitalize on existing consumer loyalty with programs that reward customer
behavior. Customer purchases could earn points toward future free or discounted
products. Premiums such as makeup bags or mirrors could tie into product purchases
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17-15. You have just been named product manager for a new FDA-approved
pharmaceutical, a diet pill, that helps reduce hunger. Should you use a push or pull
strategy to introduce this new product? Organize into small teams with each team taking
one side or the other. Prepare a short paper that explains your point of view and present it
to your classmates.
Any new product must be made available on store shelves before consumers can
purchase it. Ensuring shelf space is the task of push strategies. Diet pills, however,
fall into a highly competitive product category that, without promotional support on
the pull side, has little chance of success. Diet pills are parity products with little real
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