Types of Promotions Do Now Review Promotions activity

Types of Promotions Do Now: • Review Promotions activity • Hand in test corrections

Activity #1: You own a small boutique that sells merchandise of your choice. Your sales have been going up, but you want more foot traffic to ultimately increase awareness and profits. You want to introduce a new line of products to your store, but you are afraid that: 1) You can’t afford to advertise your new product, 2) You’re not sure you can afford to appropriately stock the store with the merchandise. What do you do?

Sales Promotions are broken down into two categories: Trade promotion Consumer Promotion

Trade Promotions Trade promotions – are sales promotion activities designed to get support for a product from manufacturers, wholesalers, and retailers. Money is spent on promoting to businesses than to customers.

Types of Trade Promotions Promotional Allowances – represents cash payments or discounts given by manufactures to wholesalers or retailers for performing activities to encourage sales. Example – A cash payment or price discount given stock a large quantity of a product.

Types of Trade Promotions cont’d Cooperative Advertising – A manufacturer supports the retailer by helping to pay for the cost of advertising a product. Slotting Allowance – cash paid by a manufacturer to a retailer to help the retailer cover the costs of placing the product on the shelves. (buying space)

Types of Trade Promotions cont’d Sales Force Promotions – awards given to dealers and employees who successfully meet or exceed a sales quota.

Types of Trade Promotions cont’d Trade Shows and Conventions – enable manufactures to showcase a particular line of products. Provide businesses with opportunities to introduce new products, increase sales of new and existing products, meet customers and partners, and gain company support. (Electronics Show in Las Vegas= 190, 000 businesses. Invest $$$ into display booths)

Consumer Promotions - are sales strategies that encourage customers and prospects to buy a product or service.

Consumer Promotion cont’d Coupons – certificates that entitle customers to cash discounts on goods or services.

Consumer Promotion cont’d Premiums – low cost items given to consumers at a discount or free. Examples would be factory packs, in-packs are free gifts given out or placed in product packages. (popular with cereal manufactures) The fundamental concept is that people will be more motivated to buy a product when they are offered an added-value gift in exchange

Consumer Promotion cont’d Deals – short term price reduction marked directly on package. Ex. Two similar products bound together for the price of one. Incentives – create customer excitement and increase sales. Examples would be contests, sweepstakes, and rebates.

Consumer Promotion cont’d Product Samples – Free trial size of a product sent through the mail, delivered door-to-door, or given away at stores or trade shows.

Consumer Promotion cont’d Sponsorship – Company pays a fee to promote itself and its product or services on a set location. A high-profile medium!

Consumer Promotion cont’d Product Placement – Using a brand name product in either a movie, TV show, or a sporting event. Ex. In TV series Survivor the winning groups were given Doritos and Mountain Dew as treats. Also the movie You’ve Got Mail and the James Bond catalog.

Consumer Promotion cont’d Loyalty Marketing Campaigns – AKA frequent buyer programs.

Let’s Review Why do businesses use sales promotions? Explain the difference between trade and consumer promotions. Why is sponsorship such an effective promotional tool? What is the purpose of loyalty marketing campaigns?

Today’s Activity Choose one type of promotion we learned today and apply it to the boutique from the Do Now. Be prepared to share with the class