Sales_Promotion_Intended_for_Trade

Trade promotions focus on members of the trade which include distribution channel members such as retail sales people or wholesale distributors, that a firm must work with to sell it’s products. Trade promotions take on one of two forms: • Discounts and deals: one form of trade promotion is a price break. Manufacturers can reduce a channel partners costs through product discounting. Case allowance is another discount promotion which is based off of sales volume. There could be a downside to this because if a merchant purchases a large quantity during the discount period and doesn’t sell them as expected then he basically loses money rather than making the money he would have hope to gain by the discounted pricing. • Increasing industry visibility: other types of trade sales promotions increase the visibility of a manufacturer’s products to channel partners within the industry. These include: trade shows, promotions products like coffee mugs, t-shirts, key chains, etc, and incentive programs. Sales Promotion Intended for Consumers Price-based consumer sales promotions accentuate short-term price drops or rebates that persuade people to choose that certain brand at least during the sale period. One downfall in this technique if used too much consumers become accustomed to purchase the product only at the promotion periods. Price-based consumer sales promotion includes the following: • Coupons: one of the most common price promotions in marketing today. Pick up the Sunday newspapers and there is a whole section of coupons especially at Christmas time, every year I search for the coupon at Toys R Us of $10 off your purchase. • Price deals, refunds, and rebates: price deals are temporary price cuts that are marked in the store or on the package itself, Target has these all the time in their stores. You will see the regular price and the “temporary cut” price. Rebates is another popular promotion that I”m familiar with. Especially when purchasing a cell phone in conjunction with your renewal of service for your mobile phone carrier. They always offer a rebate on the phone. However now, instead of sending you a check back so you can get cash, they issue you a visa card. • Frequency programs also know as customer loyalty programs: this is where the consumers is offered a discount or free product for multiple purchased over a certain period of time. Airlines with their frequent flyer miles and hotels with their premier guests are really famous for this type of program. • Special/bonus packs: another form of price promotion that involves giving the consumers more product rather than lowering the price. When I got my haircut the other day, they offered me a speical on Redkin products, the Shampoo and Conditioner were packed together when they are normally sold separately. They were also including a bottle of the detangler bundled with this pack and that was free. Attention-getting consumer sales promotions promote awareness in and exposure for a company’s products. Some forms of attention-getting promotions are: • Contests and sweepstakes: contest is a test of skill or something you compete in and a sweeptstakes is based on chance. Publishers Clearing House has a sweepstake every year. However, our town summer fest has a “guess how many twizzlers are in the jar” contest that my daughter won last year. • Premiums are items offered free to consumers that have purchased a product. When I purchased my new car, I received a free key tag that was worth a service membership that included a free oil change and discounted future oil changes. Also free tire rotations. • Sampling is just that – free samples. If you go to a Sams Club or a Costco on a Saturday you can pretty much make a meal out of all the samples of food they have at every end of the store. • Point-of-purchase: creative displays or signs. I think a good example of this is when I go to target and the first thing I see and I round the corner from getting my cart are the cd displays of the latest top music hits and then right beside that is another display of the top videos. • Product/brand placements: this type of promo is when your brand is featured in movies or television shows. An example of this would be the show House, it airs on Monday nites and I’ve seen Apple laptops on that show quite often. • Cross-promotion: this is when two or more goods or services join forces to generate awareness using a single promotional tool. References Solomon, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real choices (5th ed.). Upper Saddle River, NJ: Pearson Prentice Hall. Chapter 13 Advertising, Sales Promotion and Public Relations