promotion terms promotion Product promotion Institutional promotion Advertising

promotion terms promotion Product promotion Institutional promotion Advertising Visual Merchandising Public relations News release Publicity Promotional mix Sales promotions Trade promotions Promotional allowances Cooperative advertising Slotting allowances Sales force promotions Trade shows Consumer promotions Coupons Premiums Deals Incentives Product samples Sponsorship Promotional tie-ins Product placement Loyalty marketing programs Online loyalty marketing Point-of-purchase displays Audience Frequency Impression Advertising Campaign

Create 6 x 6 BINGO board • 32 words, 4 FREE spaces

PROMOTION Any form of communication a business or company uses to inform, persuade, or remind people about products and to improve its image

Discussion • How are promotion and communication similar?

Lesson Objectives • • • Define promotion Identify purposes of promotion Define institutional promotion Identify 5 types of promotion Define promotional mix

Purposes of Promotion • • Convince potential customers to buy Explain features/benefits of products Tell where products are sold Advertise sales on products Answer customers’ questions Introduce new products Create a favorable image of the company or product

Institutional Promotion Used to create a favorable image of the company, rather than to directly sell products

Discussion • Why would an organization promote itself and not its products?

Types of Promotion • • Advertising Sales Promotion Personal Selling Publicity/ Public Relations • Visual Merchandising

ADVERTISING The non-personal presentation of ideas and products by an identified sponsor. **PAID FOR**

Individual Activity Create a poster to illustrate how the different types of advertising media are used. You may print pictures or use the magazines. Follow the rubric. Description Relevant Illustration of each type listed in notes Description of Illustration Points Possible Print Media 25 Broadcast Media 20 Online Advertising 20 Specialty Media 15 Social Media 20 Mobile Media 20

List 2 -3 advantages/2 -3 disadvantages of each type of advertising media. Fill in chart, #8 in notebook

SALES PROMOTION • stimulate purchases • increase store traffic Examples of sales promotions include coupons, percent off sales, sweepstakes and contests. • • 2 for 1 Sale Buy One, Get One Free P 3 tshirt to 1 st 20 customers Game of the Week Giveaways *Sales promotions work to get the customers in the store and to make purchases!

Sales Promotion • Incentives that encourage customers to buy products or services • Can be used to encourage customers to try a new product, build awareness, increase purchases by current customers or reward loyalty • Either business-to-business (B 2 B) or businessto-consumer (B 2 C) oriented

Business to Consumer Sales Promotions • Coupons – Manufacturers use coupons to introduce new products, to enhance the sales of existing products, and to encourage retailers to stock and display both – How are coupons used today?

Business to Consumer Sales Promotions • Premiums – Low-cost items given to consumers at a discount or free – They are designed to increase sales by building product loyalty, and attracting new customers. – They can also persuade nonusers to switch brands – The concept behind premium marketing is that people will be more motivated to buy a product when they are offered and added-value gift in exchange – 3 types • Factory packs, traffic builders, coupon plans

Premiums • Factory packs (or in-packs) are free gifts placed in product packages. – This form of premium is especially popular with cereal manufacturers • Traffic Builders are low cost premiums such as pens, key chains, coffee mugs, etc. that are given away to consumers for visiting a new store or attending a special event • Coupon plans are ongoing programs offering a variety of premiums in exchange for labels or coupons obtained from a product or label. – A customer might send a manufacturer 3 soup can labels in exchange for a recipe book

Business to Consumer Sales Promotions • Deals – Offer short term price reductions that are marked directly on the label or package. • The deal may feature 2 similar products bound together for the price of one or two related products

Business to Consumer Sales Promotions • Incentives – Used to create customer excitement and increase sales – Generally higher priced products earned and given away through contests, sweepstakes, and rebates • Contests- games/activities that require the participant to demonstrate a skill; prizes may include scholarship, vacation, money • Sweepstakes- games of chance (by law in most states, no purchase is necessary in order to enter a contest or sweepstakes • Rebates- discounts offered by manufacturers to customers who purchase an item during a given time period

Business to Consumer Sales Promotions • Product samples – A free trial size of a product sent through the mail, distributed door-to-door, or given away at retail stores and trade shows – Samples are important when promoting new products – Drug manufacturers frequently give samples to doctors so they can let their patients try new products

Business to Consumer Sales Promotional Tie-IN • A joint promotion of two or more products or services that creates additional sales for each partner • For example, boxes of Post Great Grains cereal included a free trial package of Starbucks coffee as a value-added item for consumers (premium). • The tie-in promotion was intended to increase sales of both the cereal and the coffee.

Promotional Tie-ins Involve sales promotional arrangements between one or more retailers or manufacturers. Ex: Dr. Pepper and marvel are promoting their iron man movie. Ex: Star Wars is using Cheerios to promote their new movie by putting toys in the cereal. Ex: The Dark Knight is using Mtn DEW to promote their new movie. Ex: Star Wars is using Pepsi to promote their movie. Ex: Doritos and the game developers of Halo are using promotional tieins by offering free xp in Halo if you buy Doritos.

Sponsorships • Sponsorship is not the same as advertising • Sponsorships provide a lateral partnership between 2 parties • It is a form of marketing in which companies attach their name, brand, or logo to an event for the purpose of achieving future profits • For example, major corporations sponsored the NCAA college football bowl games recently

Product Placement • The majority of us are getting tired of ads. Today's consumer sees advertising everywhere: tv, radio, billboards, magazines, buses, newspapers, the Internet. . . • More and more ad-space is popping up every day. From people walking down the street wearing signs, to flyers on our cars and in our mailboxes, to ads on the ATM screen as we wait for it to dispense our cash -we see ads all day, every day. • When is an ad not an ad? When it's a product placement. Once mainly found only on the big screen, product placement has been making quite a few appearances on TV -- not to mention in video games and even books. • New Superman movie (most commercialization ever), “Ad-free” 24

Point of Purchase Displays • The customer is thinking about a particular product but often they are drawn to the one which is displayed in a more prominent fashion without knowing. • Well done point of purchase (POP) displays will draw consumers to one product over another, or give one store a better image (visual merchandising). • POP display often carry impulse purchases that have a higher markup %! • Usually near the checkout counter • Gum, drinks

Loyalty Marketing Programs • BUILD A RELATIONSHIP WITH YOUR CUSTOMER! • Customer loyalty is all about attracting the right customer, getting them to buy, buy often, buy in higher quantities and bring you even more customers. • VIP and loyalty program members are 70% more likely to spread the word about your business. • 65% want stores they want to frequent to email them coupons and promotions. • The probability of making an additional sale or upselling to loyal customers is 60 -70%. – Compared with loyal customers, new ones are more price-conscious. The chances of getting a sale from a new person is 5 to 20%. And actual sales from promotions sent to them is less than 1%. JOIN from web or mobile. Connect via Facebook or Twitter. Get ready to be rewarded for your brand loyalty. Being Social has its advantages!

Bellringer • The last consumer sales promotion activity that we talked about yesterday was loyalty marketing programs. • Write 1 example of a loyalty program from 5 different stores that you are a customer at.

Loyalty Marketing Program • Def: A marketing approach in which companies focus on growing clientele through incentives. 5 Examples of Loyalty Marketing: 1. ) Coupons- Discounts on certain items 2. ) Reward Points Card- What they scan when you purchase an item to gain reward points 3. ) Reward Points- Going to the internet and buying things with reward points for shopping there 4. ) Premium Membership. Special discounts when becoming a member of store

Business 2 Business Sales Promotions (Trade Promotions) • Trade promotions are sales promotions activities designed to get support for a product from manufacturers, wholesalers, and retailers. – Promotional allowances, cooperative advertising, slotting allowances, sales force promotions, trade shows and conventions • More money is actually spent on promoting to businesses rather than consumers

Promotional Allowances • Represent cash payments or discounts given by manufacturers to wholesalers or retailers for performing activities to encourage sales. • For example: – Stocking a large quantity of a product • The cash payment or price discount gives wholesalers and retailers an incentive to sell, so they are more likely to promote to customers.

Cooperative Advertising • A manufacturer supports a retailer by helping to pay for the cost of advertising its product locally.

Slotting Allowance • Cash premium paid by a manufacturer to a retailer to help the retailer cover the costs of placing the manufacturer’s product on the shelves. • Can range from a few thousand dollars to several million dollars per product. • In addition to buying space in the store, slotting allowances also pay for a retailer’s discount specials on a product, charges for store shelves, penalties for poor sales, store advertising, and display costs.

Article Summary

Sales Force Promotions, Trade Show & Conventions

Personal Selling • The salesperson is used as a vehicle to inform, remind and persuade customers about the products available to them. • The personal presentation of a product

Publicity/Public Relations • PUBLICITY • Creating demand for a business or product by placing news about it in the media • Publicity is similar to institutional advertising in that its main purpose is to create a favorable image about the company hoping to increase sales – The difference is that information about the company is placed in the media in the form of a news release, instead of an advertisement (PUBLICITY IS FREE!) • PUBLIC RELATIONS • Involves the activities that businesses do to create publicity for the company

Visual Merchandising • The coordination of all physical elements in a place of business so that it projects the right image to its customers • Arranging merchandise to entice customers to buy products

The combination of promotion types represents a product’s PROMOTIONAL MIX

Quiz Describe the promotional mix that would be appropriate for our school based enterprise. Explain how you would use each type of promotion. Tell why you would or would not use each type of promotion.

Can you name a type of business that… • Uses a lot of advertising and sales promotion, but very little personal selling? • Uses little advertising, but lots of personal selling?

What types of promotion do you think the following businesses use? • • • Hayes Chrysler/Jeep Ruby Tuesday Cigarette manufacturers Avon Corporation ebay

Create a Sales Promotion for P 3 • List 5 different examples of sales promotions from researching online. • List 3 different sales promotions that P 3 could utilize during the holiday season. See handout.

Activity • Pick your favorite one and create a post, print ad and short video to promote your idea!