{"id":4603,"date":"2016-02-13T01:22:29","date_gmt":"2016-02-13T01:22:29","guid":{"rendered":"https:\/\/courses.candelalearning.com\/marketingxwaymakerxspring2016\/?post_type=chapter&#038;p=4603"},"modified":"2017-07-25T17:17:03","modified_gmt":"2017-07-25T17:17:03","slug":"reading-sales-promotions","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/chapter\/reading-sales-promotions\/","title":{"raw":"Sales Promotions","rendered":"Sales Promotions"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Objectives<\/h3>\r\n<ul>\r\n \t<li>Explain sales promotions<\/li>\r\n<\/ul>\r\n<\/div>\r\n<h2>Sales Promotions:\u00a0Getting Action Now<\/h2>\r\n<img class=\"alignright wp-image-5256 size-medium\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2016\/06\/23205511\/print-ace-pop-232x300.jpg\" alt=\"An advertisement that reads Get a free $25 restaurant.com gift certificate when you spend $50. There is a picture of a $25 gift card that bears the restaurant.com logo and the ACE logo.\" width=\"232\" height=\"300\" \/>\r\n\r\nSales promotions are a marketing communication tool for stimulating revenue or providing incentives or extra value to distributers, sales staff, or customers over a short time period. Sales promotion activities include special offers, displays, demonstrations, and other\u00a0nonrecurring selling efforts that aren't part of the ordinary routine. As an additional incentive to buy, these tools can be directed at consumers, retailers and other distribution partners, or the manufacturer\u2019s own sales force.\r\n\r\nCompanies use many different forms of media to communicate about sales promotions, such as printed materials like posters, coupons, direct mail pieces and billboards; radio and television ads; digital media like text messages, email, websites and social media, and so forth.\r\n\r\nCompanies use sales promotions to\u00a0increase demand for their products and services,\u00a0improve product availability among distribution channel partners, and to coordinate selling, advertising, and public relations. A successful sales promotion tries to prompt a target segment to show interest in the product or\u00a0service, try it, and\u00a0ideally buy it and become loyal customers.\r\n\r\nThere are two types of sales promotions:\u00a0consumer\u00a0and\u00a0trade. A\u00a0consumer\u00a0sales promotion targets the consumer or end-user buying the product, while a\u00a0trade promotion focuses on organizational customers that can stimulate immediate sales.\r\n<h2>Consumer Sales Promotion Techniques<\/h2>\r\n[caption id=\"attachment_5787\" align=\"alignright\" width=\"250\"]<img class=\"wp-image-5787\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2016\/02\/04110152\/4948232118_bab9070cd8_o-1024x765.jpg\" alt=\"A platter full of many cups of Mocha Toffee Latte\" width=\"250\" height=\"187\" \/> Free samples of Starbucks Mocha Toffee Latte[\/caption]\r\n<p class=\"p\">Most consumers are familiar with common sales promotion techniques\u00a0including\u00a0samples, coupons, point-of-purchase displays, premiums, contents, loyalty programs and rebates.<\/p>\r\n<p class=\"p\">Do you like free samples? Most people do. A<span class=\"ph\">\u00a0<\/span><strong><span class=\"ph\">sample<\/span><\/strong><span class=\"ph\">\u00a0<\/span>is a sales promotion in which a small amount of a product that is for sale is given to consumers to try. Samples encourage trial and an increased awareness of the product. You have probably purchased a product that included a small free sample with it\u2014for example, a small amount of conditioner packaged with your shampoo. Have you ever gone to a store that provided free samples of different food items? The motivation behind\u00a0giving away samples is to get people to buy a product. Although sampling is an expensive strategy, it is usually very effective for food products. People try the product, the person providing the sample tells consumers about it,\u00a0and mentions any special pricing or offers for the product.<\/p>\r\n<p class=\"p\">Often paired with samples are coupons. <span class=\"ph\"><strong class=\"ph b\">Coupons<\/strong><\/span><span class=\"ph\">\u00a0<\/span>provide an immediate price reduction off an item. The amount of the coupon is later reimbursed to the retailer by the manufacturer. The retailer also gets a handling fee for accepting coupons. When the economy is weak, more consumers collect\u00a0coupons and look for special bargains such as double coupons and buy-one-get-one-free (BOGO) coupons. While many consumers cut coupons from the inserts in Sunday newspapers, other consumers find coupons for products and stores online. Stores may also provide coupons for customers with a loyalty card.<\/p>\r\n<p class=\"p\">Consumers can download coupons on many mobile phones. Mobile marketing and the Internet give\u00a0consumers in international markets access to coupons and other promotions. In India, the majority of coupons used are digital, while paper coupons still have the largest share in the United States. More than\u00a080 percent of diapers are purchased with coupons; imagine how much easier and less wasteful digital coupons scanned from a mobile phone are for both organizations and consumers.<\/p>\r\n<p class=\"p\"><span class=\"ph\"><strong class=\"ph b\">Point-of-purchase\u00a0displays\u00a0<\/strong><\/span>encourage consumers to buy a product immediately. These displays draw attention to a product by giving it special placement and signage. Coupon machines placed in stores\u00a0are a type of point-of-purchase display.\u00a0When a consumer sees a special display or can get a coupon instantly, manufacturers hope the easy availability or the discount will convince them to buy, increasing overall sales in the process.<\/p>\r\n<p class=\"p\">A variety of different sales promotions are conducted online. Common online consumer sales promotions include incentives such as free items, special pricing for product bundles (buying multiple products together), free shipping, coupons, and sweepstakes. For example, many online merchants such as Bluefly\u00a0and Zappos offer free shipping and free return shipping to encourage consumers to shop online. Some companies\u00a0have found that response rates for online sales promotions are\u00a0better than response rates for\u00a0traditional sales promotions.<\/p>\r\n<p class=\"p\">Another very popular sales promotion for consumers is a premium. A <span class=\"ph\"><strong class=\"ph b\">premium<\/strong><\/span><span class=\"ph\">\u00a0<\/span>is a product or offer a consumer receives when they buy another product. Premiums may be offered free or for\u00a0a small shipping and handling charge with proof of purchase (sales receipt or part of package). Remember wanting your favorite cereal because there was a toy in the box? The toy is an example of a premium. Some premiums are designed to motivate consumers\u00a0to a buy product multiple times. What many people don\u2019t realize is that when they pay the shipping and handling charges, they may also be paying for the premium.<\/p>\r\n<p class=\"p\">Contests and\u00a0sweepstakes are also popular consumer sales promotions.<span class=\"ph\">\u00a0<\/span><span class=\"ph\"><strong class=\"ph b\">Contests<\/strong><\/span><span class=\"ph\">\u00a0<\/span>are games of skill offered by a company, that offer consumers the chance to win a prize. Cheerios' <em>Spoonfuls of Stories<\/em> contest, for example, invited people to submit an original children's story and the chance to win money and the opportunity to have their story published. \u00a0<strong>Sweepstakes<\/strong>\u00a0are games of chance people enter for the opportunity to win money or prizes. Sweepstakes are often\u00a0structured as some variation on a random drawing. \u00a0The companies and organizations\u00a0that conduct these activities hope consumers will not only enter their games, but also buy more of their products and ideally share their information for future marketing purposes. As the following video shows, marketers have become increasingly sophisticated in the way they approach this \"gaming\" aspect of\u00a0sales\u00a0promotions.<\/p>\r\nhttps:\/\/youtu.be\/1nikw1v5Zjo\r\n\r\nYou can read a transcript of the video <a href=\"https:\/\/s3-us-west-2.amazonaws.com\/oerfiles\/WM+Marketing\/Gamification.txt\">here<\/a>.\r\n<p class=\"p\"><span class=\"ph\"><strong class=\"ph b\">Loyalty\u00a0programs<\/strong><\/span><span class=\"ph\">\u00a0<\/span>are sales promotions designed to get repeat business. Loyalty programs include things such as frequent flier programs, hotel programs, and shopping cards for grocery stores, drugstores, and restaurants. Sometimes point systems are used in conjunction with loyalty programs. After you accumulate so many miles or points, an organization might provide you with a special incentive such as a free flight, free hotel room, or free sandwich. Many loyalty programs, especially hotel and airline programs, have partners to give consumers more ways to accumulate and use miles and points.<\/p>\r\n<p class=\"p\"><span class=\"ph\"><strong class=\"ph b\">Rebates<\/strong><\/span><span class=\"ph\">\u00a0<\/span>are popular with both consumers and the manufacturers that provide them. When you get a rebate, you are refunded part (or all) of the purchase price of a product after completing a form and sending it to the manufacturer with your proof of purchase. The trick is completing the paperwork on time. Many consumers forget or wait too long to do so and, as a result, don't get any money back. This is why rebates are also popular with manufacturers. Rebates sound great to consumers until they forget to mail\u00a0them in.<\/p>\r\n<p class=\"p\"><img class=\"aligncenter wp-image-5258 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2016\/06\/23205645\/staples-free-ream-of-paper.jpg\" alt=\"A Staples coupon for multipurpose paper. It promises a free multipurpose paper ream. You pay $5.99, and Staples will send your rebate with a receipt.\" width=\"721\" height=\"361\" \/><\/p>\r\n\r\n<h2>Trade Promotion Techniques<\/h2>\r\nCompanies may offer a wide variety of trade promotions to wholesalers,\u00a0retailers, their own sales teams, and other stakeholder groups with a vested interest in selling or reselling products or services. Among the most common are trade shows, sales contests, trade allowances, training, product demonstrations, free merchandise and push money.\r\n\r\nOne of the most common types of sales promotions, particularly in in B2B markets, are trade shows. A\u00a0<strong>trade\u00a0show<\/strong>\u00a0is an event in which firms in a particular industry display and demonstrate their offerings to the organizations and people they hope will buy them. Trade shows may be organized to focus on\u00a0particular product categories, industries, geography, buyer roles, and other criteria. Typically an organization has many different options for trade show participation.\r\n\r\n[caption id=\"attachment_5785\" align=\"alignright\" width=\"250\"]<img class=\"wp-image-5785\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2016\/02\/04110155\/6699427077_44d879e242_b-1024x778.jpg\" alt=\"A very crowded convention. A Samsung sign hangs over the crowd.\" width=\"250\" height=\"190\" \/> Consumer Electronics Show, 2012[\/caption]\r\n\r\n<strong>Sales\u00a0contests<\/strong>, which are often held by manufacturers and B2B companies, provide incentives for salespeople to increase their sales. Often, the contests focus on selling higher-profit or slow-moving products. The sales representative with the most sales of the product wins a prize such as a free vacation, company recognition, money, or some other performance bonus.\r\n\r\n<strong>Trade\u00a0allowances<\/strong>\u00a0give channel partners\u2014for example, a manufacturer\u2019s wholesalers, distributors, retailers, etc.\u2014different incentives to push\u00a0a product to its customers. One type of trade allowance is an\u00a0advertising\u00a0allowance\u00a0(money) to advertise a seller\u2019s products in local newspapers. An advertising allowance benefits both the manufacturer and the retailer. Typically, the retailer can get a lower rate than manufacturers on advertising in local outlets, which saves the manufacturer money. The retailer benefits by getting an allowance from the manufacturer.\r\n\r\nAnother sales promotion tool that manufacturers offer businesses is\u00a0<strong>training<\/strong>\u00a0to help their salespeople understand how the manufacturers\u2019 products work and how consumers can be enticed to buy them. Many manufacturers also provide in-store\u00a0<strong>product\u00a0demonstrations<\/strong>\u00a0to show a channel partner\u2019s customers how products work and answer any questions they might have. Demonstrations of new video-game systems and computers are extremely popular and successful in generating sales.\r\n\r\n<strong>Free\u00a0merchandise<\/strong>, such as a tool, television, or other product produced by the manufacturer, can also be used to induce\u00a0retailers to sell products to consumers. For example, a television manufacturer might offer the manager of a retail electronics store a television to push its products. If a certain number of televisions is\u00a0sold, the manager gets the television.\r\n\r\nHave you ever been to an electronics store or a furniture store and felt like the salesperson was pushing one particular television or one particular mattress? Perhaps the salesperson was getting\u00a0<strong>push\u00a0money\u2014<\/strong>a cash incentive from the manufacturer to\u00a0push\u00a0a particular item. Manufacturers may encounter\u00a0several reasons to offer push money to increase product sales: perhaps there is a large amount of inventory, it is being replaced by a new model, or the product is not selling well.\r\n<h2>Which Sales Promotions Work Best, and When?<\/h2>\r\nThe table, below, summarizes the different types of sales promotions designed for both consumers and businesses. Although different types of sales promotions work best for different organizations, rebates are very profitable for companies because, as you have learned, many consumers forget to send in their rebate forms. In a weak economy, consumers tend to use more coupons, but they also buy more store brands. Coupons available online or at the point of purchase are being used more often by consumers. Trade shows can be very successful, although the companies that participate in them need to follow-up on the leads generated at the shows.\r\n<table>\r\n<thead>\r\n<tr>\r\n<td><strong>Consumer Sales Promotions<\/strong><\/td>\r\n<td><strong>B2B Sales Promotions<\/strong><\/td>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>Coupons<\/td>\r\n<td>Trade shows and conventions<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Sweepstakes or contests<\/td>\r\n<td>Sales contests<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Premiums<\/td>\r\n<td>Trade and advertising allowances<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Rebates<\/td>\r\n<td>Product demonstrations<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Samples<\/td>\r\n<td>Training<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Loyalty programs<\/td>\r\n<td>Free merchandise<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Point-of-purchase displays<\/td>\r\n<td>Push money<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<h2>Advantages and Disadvantages of\u00a0Sales Promotions[footnote]http:\/\/edwardlowe.org\/digital-library\/how-to-establish-a-promotional-mix\/[\/footnote]<\/h2>\r\nIn addition to their primary purpose of boosting sales in the near term, companies can use consumer sales promotions to help them understand price sensitivity. Coupons and rebates provide useful information about how pricing influences consumers' buying behavior.\u00a0Sales promotions can also be a valuable\u2013and sometimes sneaky\u2013way to acquire contact information for current and prospective customers. Many of these offers\u00a0require consumers to provide their names and other information in order to participate. Electronically-scanned coupons can be linked to other purchasing data, to inform organizations about buying habits. All this information can be used for future marketing research, campaigns and outreach.\r\n\r\nConsumer sales promotions can generate loyalty and enthusiasm for a brand, product, or service. Frequent flyer programs, for example, motivate travelers to fly on a preferred airline even if the ticket prices are somewhat higher. If sales have slowed, a promotion such as a sweepstakes or contest can spur customer excitement and (re)new interest in the company's offering. Sales promotions are a good way of energizing and inspiring customer action.\r\n\r\nTrade promotions offer distribution channel partners\u00a0financial incentives that encourage them to support and promote a company's products. Offering incentives like prime shelf space at a retailer\u2019s store in exchange for discounts on products has the potential to build\u00a0and enhance business relationships with important distributors\u00a0or businesses. Improving\u00a0these relationships can lead to higher sales, stocking of other product lines, preferred business terms and other benefits.\r\n\r\nSales promotions can be a two-edged sword: if a company is continually handing out product samples and coupons, it can risk tarnishing the company's brand. Offering too many\u00a0freebies can signal to customers that they are not purchasing\u00a0a prestigious or \"limited\" product. Another risk with too-frequent promotions is that savvy customers will hold off purchasing until the next promotion, thus depressing sales.\r\n\r\nOften businesses rush to grow quickly by offering sales promotions, only to see these promotions fail to reach their sales goals and target customers. The temporary boost in short term sales may be attributed to highly price-sensitive consumers looking for a deal, rather than the long-term loyal customers a company wants to cultivate. Sales promotions need to be thought through, designed and promoted carefully. They also need to align well with the company's larger business strategy. Failure to do so can be costly in terms of dollars, profitability and reputation.\r\n\r\nIf businesses become overly reliant\u00a0on sales growth through promotions, they can get\u00a0trapped in short-term marketing thinking and forget to focus on long-term goals. If, after each sales dip, a business offers another sales promotion, it can be damaging to\u00a0the long-term value of its brand.\r\n<h2>IMC Support for Sales Promotions<\/h2>\r\nSales promotions\u00a0are delivered to targeted groups via marketing campaigns during a pre-set, limited amount of time. In order to broaden awareness, impact and participation, sales promotions are often\u00a0combined with other marketing communication methods in the promotional mix. Examples of IMC support for sales promotions include:\r\n<ul>\r\n \t<li>Weekly email messages to consumers informing them about the week's sales, special offers, and coupons<\/li>\r\n \t<li>Promotional information on a Web site informing consumers about the availability of a rebate or other special offer<\/li>\r\n \t<li>Posters and\u00a0other promotional\u00a0materials to enhance a point-of-purchase display<\/li>\r\n \t<li>Sweepstakes\u00a0forms\u00a0incorporated into a magazine advertisement<\/li>\r\n \t<li>Social media campaigns encouraging people to post about entering a sponsored contest on Twitter, Facebook, and Instagram<\/li>\r\n<\/ul>\r\nThese types of activities create synergies between the sales promotions and other marketing activities. IMC activities can amplify the message about the sales promotion and encourage active participation from target customers.\r\n\r\nFinally, it is important to recognize that sales promotions cannot compensate for a poor product, a declining sales\u00a0trend, ineffective advertising, or weak\u00a0brand\u00a0loyalty. If these fundamentals are not working, sales promotions can serve only as a temporary\u00a0solution.","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Objectives<\/h3>\n<ul>\n<li>Explain sales promotions<\/li>\n<\/ul>\n<\/div>\n<h2>Sales Promotions:\u00a0Getting Action Now<\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-5256 size-medium\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2016\/06\/23205511\/print-ace-pop-232x300.jpg\" alt=\"An advertisement that reads Get a free $25 restaurant.com gift certificate when you spend $50. There is a picture of a $25 gift card that bears the restaurant.com logo and the ACE logo.\" width=\"232\" height=\"300\" \/><\/p>\n<p>Sales promotions are a marketing communication tool for stimulating revenue or providing incentives or extra value to distributers, sales staff, or customers over a short time period. Sales promotion activities include special offers, displays, demonstrations, and other\u00a0nonrecurring selling efforts that aren&#8217;t part of the ordinary routine. As an additional incentive to buy, these tools can be directed at consumers, retailers and other distribution partners, or the manufacturer\u2019s own sales force.<\/p>\n<p>Companies use many different forms of media to communicate about sales promotions, such as printed materials like posters, coupons, direct mail pieces and billboards; radio and television ads; digital media like text messages, email, websites and social media, and so forth.<\/p>\n<p>Companies use sales promotions to\u00a0increase demand for their products and services,\u00a0improve product availability among distribution channel partners, and to coordinate selling, advertising, and public relations. A successful sales promotion tries to prompt a target segment to show interest in the product or\u00a0service, try it, and\u00a0ideally buy it and become loyal customers.<\/p>\n<p>There are two types of sales promotions:\u00a0consumer\u00a0and\u00a0trade. A\u00a0consumer\u00a0sales promotion targets the consumer or end-user buying the product, while a\u00a0trade promotion focuses on organizational customers that can stimulate immediate sales.<\/p>\n<h2>Consumer Sales Promotion Techniques<\/h2>\n<div id=\"attachment_5787\" style=\"width: 260px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-5787\" class=\"wp-image-5787\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2016\/02\/04110152\/4948232118_bab9070cd8_o-1024x765.jpg\" alt=\"A platter full of many cups of Mocha Toffee Latte\" width=\"250\" height=\"187\" \/><\/p>\n<p id=\"caption-attachment-5787\" class=\"wp-caption-text\">Free samples of Starbucks Mocha Toffee Latte<\/p>\n<\/div>\n<p class=\"p\">Most consumers are familiar with common sales promotion techniques\u00a0including\u00a0samples, coupons, point-of-purchase displays, premiums, contents, loyalty programs and rebates.<\/p>\n<p class=\"p\">Do you like free samples? Most people do. A<span class=\"ph\">\u00a0<\/span><strong><span class=\"ph\">sample<\/span><\/strong><span class=\"ph\">\u00a0<\/span>is a sales promotion in which a small amount of a product that is for sale is given to consumers to try. Samples encourage trial and an increased awareness of the product. You have probably purchased a product that included a small free sample with it\u2014for example, a small amount of conditioner packaged with your shampoo. Have you ever gone to a store that provided free samples of different food items? The motivation behind\u00a0giving away samples is to get people to buy a product. Although sampling is an expensive strategy, it is usually very effective for food products. People try the product, the person providing the sample tells consumers about it,\u00a0and mentions any special pricing or offers for the product.<\/p>\n<p class=\"p\">Often paired with samples are coupons. <span class=\"ph\"><strong class=\"ph b\">Coupons<\/strong><\/span><span class=\"ph\">\u00a0<\/span>provide an immediate price reduction off an item. The amount of the coupon is later reimbursed to the retailer by the manufacturer. The retailer also gets a handling fee for accepting coupons. When the economy is weak, more consumers collect\u00a0coupons and look for special bargains such as double coupons and buy-one-get-one-free (BOGO) coupons. While many consumers cut coupons from the inserts in Sunday newspapers, other consumers find coupons for products and stores online. Stores may also provide coupons for customers with a loyalty card.<\/p>\n<p class=\"p\">Consumers can download coupons on many mobile phones. Mobile marketing and the Internet give\u00a0consumers in international markets access to coupons and other promotions. In India, the majority of coupons used are digital, while paper coupons still have the largest share in the United States. More than\u00a080 percent of diapers are purchased with coupons; imagine how much easier and less wasteful digital coupons scanned from a mobile phone are for both organizations and consumers.<\/p>\n<p class=\"p\"><span class=\"ph\"><strong class=\"ph b\">Point-of-purchase\u00a0displays\u00a0<\/strong><\/span>encourage consumers to buy a product immediately. These displays draw attention to a product by giving it special placement and signage. Coupon machines placed in stores\u00a0are a type of point-of-purchase display.\u00a0When a consumer sees a special display or can get a coupon instantly, manufacturers hope the easy availability or the discount will convince them to buy, increasing overall sales in the process.<\/p>\n<p class=\"p\">A variety of different sales promotions are conducted online. Common online consumer sales promotions include incentives such as free items, special pricing for product bundles (buying multiple products together), free shipping, coupons, and sweepstakes. For example, many online merchants such as Bluefly\u00a0and Zappos offer free shipping and free return shipping to encourage consumers to shop online. Some companies\u00a0have found that response rates for online sales promotions are\u00a0better than response rates for\u00a0traditional sales promotions.<\/p>\n<p class=\"p\">Another very popular sales promotion for consumers is a premium. A <span class=\"ph\"><strong class=\"ph b\">premium<\/strong><\/span><span class=\"ph\">\u00a0<\/span>is a product or offer a consumer receives when they buy another product. Premiums may be offered free or for\u00a0a small shipping and handling charge with proof of purchase (sales receipt or part of package). Remember wanting your favorite cereal because there was a toy in the box? The toy is an example of a premium. Some premiums are designed to motivate consumers\u00a0to a buy product multiple times. What many people don\u2019t realize is that when they pay the shipping and handling charges, they may also be paying for the premium.<\/p>\n<p class=\"p\">Contests and\u00a0sweepstakes are also popular consumer sales promotions.<span class=\"ph\">\u00a0<\/span><span class=\"ph\"><strong class=\"ph b\">Contests<\/strong><\/span><span class=\"ph\">\u00a0<\/span>are games of skill offered by a company, that offer consumers the chance to win a prize. Cheerios&#8217; <em>Spoonfuls of Stories<\/em> contest, for example, invited people to submit an original children&#8217;s story and the chance to win money and the opportunity to have their story published. \u00a0<strong>Sweepstakes<\/strong>\u00a0are games of chance people enter for the opportunity to win money or prizes. Sweepstakes are often\u00a0structured as some variation on a random drawing. \u00a0The companies and organizations\u00a0that conduct these activities hope consumers will not only enter their games, but also buy more of their products and ideally share their information for future marketing purposes. As the following video shows, marketers have become increasingly sophisticated in the way they approach this &#8220;gaming&#8221; aspect of\u00a0sales\u00a0promotions.<\/p>\n<p><iframe loading=\"lazy\" id=\"oembed-1\" title=\"Gamification\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/1nikw1v5Zjo?feature=oembed&#38;rel=0\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>You can read a transcript of the video <a href=\"https:\/\/s3-us-west-2.amazonaws.com\/oerfiles\/WM+Marketing\/Gamification.txt\">here<\/a>.<\/p>\n<p class=\"p\"><span class=\"ph\"><strong class=\"ph b\">Loyalty\u00a0programs<\/strong><\/span><span class=\"ph\">\u00a0<\/span>are sales promotions designed to get repeat business. Loyalty programs include things such as frequent flier programs, hotel programs, and shopping cards for grocery stores, drugstores, and restaurants. Sometimes point systems are used in conjunction with loyalty programs. After you accumulate so many miles or points, an organization might provide you with a special incentive such as a free flight, free hotel room, or free sandwich. Many loyalty programs, especially hotel and airline programs, have partners to give consumers more ways to accumulate and use miles and points.<\/p>\n<p class=\"p\"><span class=\"ph\"><strong class=\"ph b\">Rebates<\/strong><\/span><span class=\"ph\">\u00a0<\/span>are popular with both consumers and the manufacturers that provide them. When you get a rebate, you are refunded part (or all) of the purchase price of a product after completing a form and sending it to the manufacturer with your proof of purchase. The trick is completing the paperwork on time. Many consumers forget or wait too long to do so and, as a result, don&#8217;t get any money back. This is why rebates are also popular with manufacturers. Rebates sound great to consumers until they forget to mail\u00a0them in.<\/p>\n<p class=\"p\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-5258 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2016\/06\/23205645\/staples-free-ream-of-paper.jpg\" alt=\"A Staples coupon for multipurpose paper. It promises a free multipurpose paper ream. You pay $5.99, and Staples will send your rebate with a receipt.\" width=\"721\" height=\"361\" \/><\/p>\n<h2>Trade Promotion Techniques<\/h2>\n<p>Companies may offer a wide variety of trade promotions to wholesalers,\u00a0retailers, their own sales teams, and other stakeholder groups with a vested interest in selling or reselling products or services. Among the most common are trade shows, sales contests, trade allowances, training, product demonstrations, free merchandise and push money.<\/p>\n<p>One of the most common types of sales promotions, particularly in in B2B markets, are trade shows. A\u00a0<strong>trade\u00a0show<\/strong>\u00a0is an event in which firms in a particular industry display and demonstrate their offerings to the organizations and people they hope will buy them. Trade shows may be organized to focus on\u00a0particular product categories, industries, geography, buyer roles, and other criteria. Typically an organization has many different options for trade show participation.<\/p>\n<div id=\"attachment_5785\" style=\"width: 260px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-5785\" class=\"wp-image-5785\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2016\/02\/04110155\/6699427077_44d879e242_b-1024x778.jpg\" alt=\"A very crowded convention. A Samsung sign hangs over the crowd.\" width=\"250\" height=\"190\" \/><\/p>\n<p id=\"caption-attachment-5785\" class=\"wp-caption-text\">Consumer Electronics Show, 2012<\/p>\n<\/div>\n<p><strong>Sales\u00a0contests<\/strong>, which are often held by manufacturers and B2B companies, provide incentives for salespeople to increase their sales. Often, the contests focus on selling higher-profit or slow-moving products. The sales representative with the most sales of the product wins a prize such as a free vacation, company recognition, money, or some other performance bonus.<\/p>\n<p><strong>Trade\u00a0allowances<\/strong>\u00a0give channel partners\u2014for example, a manufacturer\u2019s wholesalers, distributors, retailers, etc.\u2014different incentives to push\u00a0a product to its customers. One type of trade allowance is an\u00a0advertising\u00a0allowance\u00a0(money) to advertise a seller\u2019s products in local newspapers. An advertising allowance benefits both the manufacturer and the retailer. Typically, the retailer can get a lower rate than manufacturers on advertising in local outlets, which saves the manufacturer money. The retailer benefits by getting an allowance from the manufacturer.<\/p>\n<p>Another sales promotion tool that manufacturers offer businesses is\u00a0<strong>training<\/strong>\u00a0to help their salespeople understand how the manufacturers\u2019 products work and how consumers can be enticed to buy them. Many manufacturers also provide in-store\u00a0<strong>product\u00a0demonstrations<\/strong>\u00a0to show a channel partner\u2019s customers how products work and answer any questions they might have. Demonstrations of new video-game systems and computers are extremely popular and successful in generating sales.<\/p>\n<p><strong>Free\u00a0merchandise<\/strong>, such as a tool, television, or other product produced by the manufacturer, can also be used to induce\u00a0retailers to sell products to consumers. For example, a television manufacturer might offer the manager of a retail electronics store a television to push its products. If a certain number of televisions is\u00a0sold, the manager gets the television.<\/p>\n<p>Have you ever been to an electronics store or a furniture store and felt like the salesperson was pushing one particular television or one particular mattress? Perhaps the salesperson was getting\u00a0<strong>push\u00a0money\u2014<\/strong>a cash incentive from the manufacturer to\u00a0push\u00a0a particular item. Manufacturers may encounter\u00a0several reasons to offer push money to increase product sales: perhaps there is a large amount of inventory, it is being replaced by a new model, or the product is not selling well.<\/p>\n<h2>Which Sales Promotions Work Best, and When?<\/h2>\n<p>The table, below, summarizes the different types of sales promotions designed for both consumers and businesses. Although different types of sales promotions work best for different organizations, rebates are very profitable for companies because, as you have learned, many consumers forget to send in their rebate forms. In a weak economy, consumers tend to use more coupons, but they also buy more store brands. Coupons available online or at the point of purchase are being used more often by consumers. Trade shows can be very successful, although the companies that participate in them need to follow-up on the leads generated at the shows.<\/p>\n<table>\n<thead>\n<tr>\n<td><strong>Consumer Sales Promotions<\/strong><\/td>\n<td><strong>B2B Sales Promotions<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Coupons<\/td>\n<td>Trade shows and conventions<\/td>\n<\/tr>\n<tr>\n<td>Sweepstakes or contests<\/td>\n<td>Sales contests<\/td>\n<\/tr>\n<tr>\n<td>Premiums<\/td>\n<td>Trade and advertising allowances<\/td>\n<\/tr>\n<tr>\n<td>Rebates<\/td>\n<td>Product demonstrations<\/td>\n<\/tr>\n<tr>\n<td>Samples<\/td>\n<td>Training<\/td>\n<\/tr>\n<tr>\n<td>Loyalty programs<\/td>\n<td>Free merchandise<\/td>\n<\/tr>\n<tr>\n<td>Point-of-purchase displays<\/td>\n<td>Push money<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2>Advantages and Disadvantages of\u00a0Sales Promotions<a class=\"footnote\" title=\"http:\/\/edwardlowe.org\/digital-library\/how-to-establish-a-promotional-mix\/\" id=\"return-footnote-4603-1\" href=\"#footnote-4603-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/h2>\n<p>In addition to their primary purpose of boosting sales in the near term, companies can use consumer sales promotions to help them understand price sensitivity. Coupons and rebates provide useful information about how pricing influences consumers&#8217; buying behavior.\u00a0Sales promotions can also be a valuable\u2013and sometimes sneaky\u2013way to acquire contact information for current and prospective customers. Many of these offers\u00a0require consumers to provide their names and other information in order to participate. Electronically-scanned coupons can be linked to other purchasing data, to inform organizations about buying habits. All this information can be used for future marketing research, campaigns and outreach.<\/p>\n<p>Consumer sales promotions can generate loyalty and enthusiasm for a brand, product, or service. Frequent flyer programs, for example, motivate travelers to fly on a preferred airline even if the ticket prices are somewhat higher. If sales have slowed, a promotion such as a sweepstakes or contest can spur customer excitement and (re)new interest in the company&#8217;s offering. Sales promotions are a good way of energizing and inspiring customer action.<\/p>\n<p>Trade promotions offer distribution channel partners\u00a0financial incentives that encourage them to support and promote a company&#8217;s products. Offering incentives like prime shelf space at a retailer\u2019s store in exchange for discounts on products has the potential to build\u00a0and enhance business relationships with important distributors\u00a0or businesses. Improving\u00a0these relationships can lead to higher sales, stocking of other product lines, preferred business terms and other benefits.<\/p>\n<p>Sales promotions can be a two-edged sword: if a company is continually handing out product samples and coupons, it can risk tarnishing the company&#8217;s brand. Offering too many\u00a0freebies can signal to customers that they are not purchasing\u00a0a prestigious or &#8220;limited&#8221; product. Another risk with too-frequent promotions is that savvy customers will hold off purchasing until the next promotion, thus depressing sales.<\/p>\n<p>Often businesses rush to grow quickly by offering sales promotions, only to see these promotions fail to reach their sales goals and target customers. The temporary boost in short term sales may be attributed to highly price-sensitive consumers looking for a deal, rather than the long-term loyal customers a company wants to cultivate. Sales promotions need to be thought through, designed and promoted carefully. They also need to align well with the company&#8217;s larger business strategy. Failure to do so can be costly in terms of dollars, profitability and reputation.<\/p>\n<p>If businesses become overly reliant\u00a0on sales growth through promotions, they can get\u00a0trapped in short-term marketing thinking and forget to focus on long-term goals. If, after each sales dip, a business offers another sales promotion, it can be damaging to\u00a0the long-term value of its brand.<\/p>\n<h2>IMC Support for Sales Promotions<\/h2>\n<p>Sales promotions\u00a0are delivered to targeted groups via marketing campaigns during a pre-set, limited amount of time. In order to broaden awareness, impact and participation, sales promotions are often\u00a0combined with other marketing communication methods in the promotional mix. Examples of IMC support for sales promotions include:<\/p>\n<ul>\n<li>Weekly email messages to consumers informing them about the week&#8217;s sales, special offers, and coupons<\/li>\n<li>Promotional information on a Web site informing consumers about the availability of a rebate or other special offer<\/li>\n<li>Posters and\u00a0other promotional\u00a0materials to enhance a point-of-purchase display<\/li>\n<li>Sweepstakes\u00a0forms\u00a0incorporated into a magazine advertisement<\/li>\n<li>Social media campaigns encouraging people to post about entering a sponsored contest on Twitter, Facebook, and Instagram<\/li>\n<\/ul>\n<p>These types of activities create synergies between the sales promotions and other marketing activities. IMC activities can amplify the message about the sales promotion and encourage active participation from target customers.<\/p>\n<p>Finally, it is important to recognize that sales promotions cannot compensate for a poor product, a declining sales\u00a0trend, ineffective advertising, or weak\u00a0brand\u00a0loyalty. If these fundamentals are not working, sales promotions can serve only as a temporary\u00a0solution.<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-4603\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Revision and adaptation. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><li>Screenshot Ace Hardware Promotion. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Screenshot Staples Rebate. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Sales Promotion, from Boundless Marketing. <strong>Provided by<\/strong>: Boundless. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.boundless.com\/marketing\/textbooks\/boundless-marketing-textbook\/integrated-marketing-communications-12\/the-promotion-mix-83\/sales-promotion-415-10910\/\">https:\/\/www.boundless.com\/marketing\/textbooks\/boundless-marketing-textbook\/integrated-marketing-communications-12\/the-promotion-mix-83\/sales-promotion-415-10910\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><li>Communicating to Mass Markets, from Introducing Marketing. <strong>Authored by<\/strong>: John Burnett. <strong>Project<\/strong>: Global Text. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Marketing Principles. <strong>Authored by<\/strong>: Anonymous. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"http:\/\/2012books.lardbucket.org\/books\/marketing-principles-v2.0\/s14-07-sales-promotions.html\">http:\/\/2012books.lardbucket.org\/books\/marketing-principles-v2.0\/s14-07-sales-promotions.html<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-nc-sa\/4.0\/\">CC BY-NC-SA: Attribution-NonCommercial-ShareAlike<\/a><\/em><\/li><li>Sampler tray of Starbucks new Mocha Toffee Latte. <strong>Authored by<\/strong>: Urban Bohemian. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.flickr.com\/photos\/urbanbohemian\/4948232118\/\">https:\/\/www.flickr.com\/photos\/urbanbohemian\/4948232118\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-nc-nd\/4.0\/\">CC BY-NC-ND: Attribution-NonCommercial-NoDerivatives <\/a><\/em><\/li><li>CES 2012 Consumer Electronics Show. <strong>Authored by<\/strong>: Joseph Hunkins. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.flickr.com\/photos\/joeduck\/6699427077\/\">https:\/\/www.flickr.com\/photos\/joeduck\/6699427077\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Gamification. <strong>Provided by<\/strong>: BBC. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/youtu.be\/1nikw1v5Zjo\">https:\/\/youtu.be\/1nikw1v5Zjo<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-nc-nd\/4.0\/\">CC BY-NC-ND: Attribution-NonCommercial-NoDerivatives <\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section><hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-4603-1\">http:\/\/edwardlowe.org\/digital-library\/how-to-establish-a-promotional-mix\/ <a href=\"#return-footnote-4603-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":8,"menu_order":13,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Sales Promotion, from Boundless 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