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Promotional Mix Strategies

Promotional Mix Strategies. Push versus Pull and More. Sales Promotion:. To gain trial among nonusers of a brand/service. To increase repeat purchase and/or multiple purchases. To expand brand usage by suggesting new uses . To defend share against competition .

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Promotional Mix Strategies

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  1. Promotional Mix Strategies Push versus Pull and More

  2. Sales Promotion: • To gain trial among nonusers of a brand/service. • To increase repeat purchase and/or multiple purchases. • To expand brand usage by suggesting new uses. • To defend share against competition. • To support advertising campaign, theme, image. • To increase distribution and/or dealer, retailer cooperation. • Short-term vs. long-term goals and relationships.

  3. Sales Promotion: • Creating an immediate sale is the primary objective. • Extra incentives to enhance movement and sales. Helps the selling process. • Direct inducement that offers an extra value or incentive to sales force, distributors or the ultimate consumer. • Stimulates Dealer and Channel Involvement.

  4. Sales Promotion: • Increasingly, the gimmicks are going away. More scanning data. • Step up to the challenge of real, brand building value, the kind that sparks genuine consumer and retailer interest. • Contribute to marketing goals. • More Events and Product Licensing

  5. Influences • Push Strategy calls for using the sales force and trade promotion. • Pull Strategy calls for spending on advertising and sales promotion to build consumer demand.

  6. Push Strategy: • Persuade wholesalers and retailers to carry brands. • Give a brand shelf space. • Promote a brand in coop advertising. Producer Wholesaler Retailer Customer

  7. Push Strategy: • Be careful of those big displays at the end of the aisles. • End Aisle Displays. End Caps. • Look at the prices. Only about 40% is actually on sale. • Because they are so bright, big and visual, we feel it’s on sale. Producer Wholesaler Retailer Customer

  8. Pull Strategy: • Entice customers to try a new product. • Lure customers from competitive products. • Hold and reward loyal customers. Producer Wholesaler Retailer Customer

  9. Push Tools: • Deals- Allowances, Price-offs and Discounts • Displays and Point of Purchase • Dealer Premiums • Samples and Free Goods • Buy-Back Guarantees • Cooperative Advertising • Advertising Materials • Push Money (Spiffs) • Dealer Meetings and Contests • Specialty Advertising Items

  10. Pull Tools: • Sampling---in-store, events, newspaper, in-pack • Cents Off Promotions and Coupons (-2%) • Continuity/Frequency and Loyalty Programs • Premiums • SLO (Self-Liquidating Offers/Premiums) • Point of Purchase Displays • Contests, Games and Sweepstakes • Rebates and Cash refunds • FSI’s (Free-Standing Inserts) 80% of distribution • Advertising Specialty Items

  11. Hints and Comments: • Coupons getting clipped. Growing retailer power and new accounting rules make couponing lessattractive. 2002 Package-Goods Marketing Budgets • 24%: Advertising 15%: Coupons and Customer Promotion +61%: Retail-Trade Promotion 100% • 1997: 23% Advertising (same) 24% Coupons/Cust. Promotion 53% Retail-Trade Promotion

  12. Hints and Comments: • 850 FSI’s (free standing inserts) per person in ’04. • 251 BILLION coupons. FSI’s are the vehicle in distributing the majority of coupons. Total pages increased 5.9 percent in ’05. • Average coupon face values grew 6.7%, to $1.09. • Offer duration increased to 10.6 weeks. • Now more Household, and Heath & Beauty aids

  13. Hints and Comments: • The average face value of Free Standing Inserts (FSI’s) hit $1.03, in comparison to $.95 in 2003, representing an 8.1% increase. In 2004 face value reached $1.00 mark for the first time. • We are seeing more manufacturers present greater incentives to shoppers, whether on a face value or per-unit basis. • Marketers continue to validate that FSI’s are a great tool to build awareness and gain trial.” Marx Promotion Intelligence ‘04 FSI Trends

  14. Hints and Comments: • Coupons can be delivered with a full page of advertising. i.e., Restaurants • Coupons on new items but also on products that have plateaued. To keep prices low and keep products on shelf. • $30 savings for a diabetic testing kit or 25 cents off flour. • Demographics: 43% men; 32% live with income of $40-75K.

  15. Hints and Comments: • Coupon experts inspire more use.Coupon savvy shoppers are advising other consumers to learn sale cycles and buy items on sale to save the most money. Although coupon fraud exists, manufacturers offer coupons to entice trying a new product or switch brands. • Big increases: Vitamins, Rug and Room Deodorizers; Prepared and Frozen Foods; Hair Care; Cereals. Decreases in Household cleaning products.

  16. Hints and Comments: • Walgreens and 15 top package-goods marketers are rolling out a RFID system to electronically track when, how long, and where promotional displays are placed in the chain’s 5,000+ stores. 1/06

  17. Hints and Comments: • Slotting Allowances: The fees retailers collect from manufacturers to ensure shelf space for new products make the marketplace more efficient, a Yale/Cornell study found. • "We find that when retailers perceive that a product is likely to be a sure hit, they don't seem to ask for slotting allowances ... manufacturers don't offer slotting allowances when they perceive the product to be a sure dud.” Progressive Grocer (4/05)

  18. Questions: • Are distributing drug samples to doctors a push or a pull strategy? • Incentives from HBO to hotels and motels. Push or Pull? • Beer.com produced 50K bottle caps featuring its name and left them on bars during spring and winter breaks. Push or Pull?

  19. Question: Wal-Mart TV network (in store) • 42” plasma screens • A smart buy or a goodwill, defensive gesture? • Sets are silent. • In-store advertising system. • In fall ’06, $247K, 129 million impressions and CPM: $2.28 includes three :30’s, and five :10’s, every two hours. AdvAge 9/06

  20. Summary: • Sales promotion budgets are usually divided into three categories: 1. Consumer advertising 2. Consumer promotion 3. Trade promotion • Companies in same industry can put emphasis on Push or Pull.

  21. Summary: • Push strategy is appropriate with low brand awareness in a category and brand choice is made in store. Can be an impulse purchase and product benefits are understood. • Pull strategy works best with high brand awareness and loyalty, or high involvement in category and customers look for product differences.

  22. Promotional Mix Strategies Push versus Pull and More

  23. Hints and Comments: • Wal-Mart Touts In-Store TV Research claims advertising on its in-store marketing network, with Premier Retail Networks, is more efficient than Cable and Network TV advertising in generating sales. A survey of TV watchers conducted by the TNS Media & Entertainment Group found that 15% of viewers purchased advertised products immediately after seeing them on an in-store broadcast. MediaPost Communications 11/30/05

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