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MCS 3620 (29)
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Chapter 8

Chapter 8 Marketing Communications.docx

5 Pages

Marketing and Consumer Studies
Course Code
MCS 3620
Bharat Sud

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Chapter 8 Marketing Communications Sales Promotion Sales Promotion Sales Promotion: An activity that provides incentives to bring about immediate response from customers (distributors included)  Customer must be motivated to take advantage of the offer  The distributor must be motivated to support the offer by providing merchandising support  Company’s sales force must be motivated to sell the promotion to its trade customers Customer Promotions: Incentives offered to customers to stimulate purchases of encourage loyalty  Includes coupons, free samples, contents, rebates, prizes, reward programs etc.  Planned to pull the product through the distribution channel  Org. creates demand for a product by directing its promo efforts directly at the customer  Many companies now include experiential marketing activities, often referred to as buzz marketing, in their promo strategies Trade Promotions: An incentive offered to channel members to encourage them to provide marketing & merchandising support for a particular product  Include options such as discounts, allowances, cooperative advertising funds, dealer premiums & incentives & point of purchase materials  Offering financial incentives to distributors encourages them to support the manufacturers promo plans  Push the product through the channel of distribution Sales Promotion Planning  A sales promo plan is 1 component of a much larger plan and must directly fit into this, the marketing communications plan  Sales promo plan adopts a short-term view & achieves objectives of more immediate nature  Sales promotions are activities that complement advertising  Advertising has goals of awareness comprehensions, conviction & action  Promos focus in on action  Very often an outside person will help with the sales promotion  The promo agency must assess the info provided by the client and then prepare a strategic plan that meet objectives Information in sales promo brief often includes… Market Profile  Overview of sales & market share trends provides market perspective to the promo planners  Know if brand is leader, follower or challenger  Is market growing? What brands are growing in market? Competitor Activity Profile  What communication strategies to the key competitors use  What are the roles of the various elements in the mix for each brand  What brands dominate the market and what are their mixes? Target Market Profile  Customers described in terms of demo, psycho, geo graphic & behavioural characteristics  Shopping behaviour of targets Sales Promo Objectives Sales promotion plans focus on: 1. Generating trial purchases 2. Encouraging repeat/multiple purchases 3. Building brand loyalty Budget  Funds for the sales promotion plan come from the overall marketing budget  Will this be a large-scale national promotion or restricted to specific regions?  How much will the prize be?  What advertising is needed to create awareness of promo The Sales Promotion Plan Sales Promotion Plan: An action plan for communicating incentives to appropriate target markets at the right time  Objectives are clearly defines, strategies justified and tactile details documented  Backend considerations are very important  E.g. details about how offer will be handled from the time the consumer responds to time the goods are delivered must be precisely planned  The structure & content of a sales promo plan are the focus of this section Sales Promo Objectives  Sales promotion objectives are statements that clearly say what the promo plan is to accomplish  Objective statements should be realistically achievable, quantifiable in nature (for measurement) and directed at a carefully defined target market  The nature of the promo plan determines the objectives (consumer promotion vs. trade promotion)  Objectives for both are quite different but complement eachother when implemented Consumer Promo Objectives  Most common objective is to encourage consumers to make a trial purchase  When a product is new or in growth stage of development there is a need to distinguish 1 brand from another  Media-delivered coupons are a great promo too for encouraging trial purchase  2 objective is to stimulate repeat purchases by existing customers  Or make existing customers purchase more at 1 time rd  3 objective deals with CRN and objective is to encourage brand loyalty for extended period  Loyalty card is a good way to do this cause it brings consumer back Trade Promo Objectives  Overall goal is to give sales a jolt in the short run  Trade promo plans are designed to encourage distributors to carry a product & then sell it to retailers and to instease the volume sold for the products they already carry  1 objective is to secure listing w/ distributors  Listing = agreement made by wholesaler to distribute a manufacturer’s product to the retailer it supplies  Typically trade promos in form of financial incentives are used to secure listings nd  2 objective is to build sales volume on either a seasonal basis or a predetermined cyclical basis thrdughout the year  3 objective is to secure merchandising support from distributors  Their support is crucial b/c once product leaves the manufacturer’s warehouse the manufacturer isn’t in control anymore of how its sold  Funds are allocated to getting product out of warehouse and onto retail sales floors  Manufacturer will look for a sales price & maybe a brand mention of the sale price in retailer’s flyer Sales Promotion Strategy  Decisions about sales promotion strategy focus on the selection of the best promo activity to meet the objectives  Decisions point the org, in a certain direction and if agreed to, the tactical details then are developed  E.g. org can choose coupons, free samples etc.  Other decisions may include the selection of prices (cash, merch etc.)  Key decisions about trade promo strategy involve the allocation of funds among the different alternatives  Depending on objectives could be given to listing allowances, trade and promo allowances etc.  Manager must also decide about the balance between consumer (pull) promos and trade promos (push) Step 2: Integration w/ advertising strategy  Need to promote the promotion  W/ creative, the ideal situation is to have promotional creative blend effectively w/ existing brand creative  A promo is an added incentive and so it becomes the brand’s unique selling point  A sales promo will only work if it r receives the necessary media support  The size and nature of promo will dictate the degree of media support needed  Manufacturer’s sales reps have the responsibility of making trade customers aware of consumer promo offers  Manufacturer often makes specific sale literature such as brochure/pamphlets for reps to use to introduce the promotion  The sales rep will work the consumer promo offer into their trade promo plans to maximize the impact of the dollars being invested in the promo  The sales rep will sell the promo to distributors and show the positive effects it will have on their business Logistics & Fulfillment  The final stage of planning a promo campaign involves working out all the offer details  Will be a variety of dates & deadlines and other companies involved in planning & implementing the offer Measurement & Evaluation  A boost in sales is the immediate goal of most forms of promotion  A promo must be evaluated based on objectives that were established  Specific promos are also measured by consumer response rates  A side benefit of consumer promos is the collection of names that can be added to an org’s database\ > Smart marketers ask for addition info on entry forms etc. Consumer Promotion Execution  An org will combine vario
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