Professional Documents
Culture Documents
PERSONAL
SELLING ADVERTISING
PUBLICITY SALES
PROMOTION
Sales Promotion Importance
Coupons, refunds
Rebates, cents-off-
P-O-P material
Product placements/tie-ins
Classifying Types of Sales Promotion
Promotional Non-price Sampling
pricing promotions
• Price reductions
• Free goods
• Tied offers • Most effective in
• Contests the early stages of a
• Money off next
• Free gifts new product launch
purchase
• Loss leader • Self-supporting offers (#1 use for coupons)
• • Important for food
pricing Multi-brand promos s
products
• Cheap credit • Guarantees and added
• Very expensive
services
Rebates: A Consumer Information Source
• Buyers fill out rebate forms with names,
addresses and household data about customers
- directly targets price cuts to customers
- 5-10% are redeemed (A Phantom discount)
90
80 •
70
60
50
40
30
20
10
0
U.S. Canada Belgium U.K Italy Spain France
Series1 80.9 32.7 18.5 15.9 4.3 1.5 1.4
USA Coupon Redemption
50%
40%
30%
20%
10%
0%
1985 1987 1989 1991 1993 1995
Advertising
Sales Promotion, Pro and Con
•Advantages: •Disadvantages:
•Only short-term
•Motivation method for •Hidden costs
special efforts •Confusion
•Short-term sales increase •Price cutting -Brand image
•Defined target audience •Postponement effect
•Significant government regulation
•Defined role/objectives
•Lack of effectiveness sometimes
•Indirect roles (e.g., wider (learning effect)
distribution)
A Benefit Congruency Framework of
Sales Promotion Effectiveness
High *
Free
Gifts
* *Price Reductions
Rebates
Low
Low Utilitarian High
Study #4:
Design and Procedure
2 P ro d u c ts
1 H e d o n ic 1 U tilita ria n
No M o n e ta ry N o n m o n e ta ry M o n e ta ry N o n m o n e ta ry
P ro m o tio n L /E B ra n d L /E B ra n d H /E B ra n d H /E B ra n d
Study #4, Conclusions
1. Monetary saving is not the only consumer benefit
2. Consumers distinguish six benefits
3. Six benefits grouped between Utilitarian and
Hedonic
4. All six (except quality) are significant predictors of
overall evaluation
5. Monetary promos provide more Utilitarian benefits
than Hedonic benefits
Study #5: Benefit Congruency Effect
Design and Procedure
2 H ig h E n d P r o d u c t s
1 H e d o n ic a n d 1 U t ilit a r ia n
N o n m o n e ta ry M o n e ta ry
P r o m o t io n s P r o m o t io n s
2 F r e e G if t s 2 S w e e p s ta k e s 2 Coupons 2 R e b a te s
Study #5, Conclusions
1.Sales promo’s provide benefits beyond monetary savings
2.Nonmonetary promos provide more Hedonic benefits
3.For High End brands, sales promos are more effective
4.Monetary promos can destroy market share when offered
with incongruent high equity hedonic brands
competing against low-priced brands