Marketing Communication Tools
Sales Promotion & Direct Markting
Short term or long term sales incentives
50 % discount on Saturday
20 day 20 cars for winning
Do you play the lottery? Why or why not?
sure gain vs. chances to win
Amos Tversky; Daniel Kahneman
The Framing of Decisions and the Psychology of Choice
(see attached article)
Imagine that you face the following pair of concurrent decisions. First examine both decisions, then indicate the options you prefer.
Decision (i). Choose between: risk averse
A. a sure gain of $240 [84 percent]
B . 25% chance to gain $1000, and 75% chance to gain nothing [ 16 percent]
A & D. 25% chance to win $240, and 75% chance to lose $760.
Decision (ii). Choose between: risk taking
C. a sure loss of $750 [ 13 percent]
D. 75% chance to lose $1000, and 25% chance to lose nothing [87 percent]
B & C. 25% chance to win $250, and 75% chance to lose $750.
Advertising – latin: advertere – turn towards
Promotion – latin: promovere – move forward
Percy & Elliot, 2009
http://www.youtube.com/watch?v=hFPRWoO2Lls&feature=related http://www.youtube.com/watch?v=dGb88ABGNms What is sales promotion?
Advertising tries to change attitudes
Range of marketing techniques in order to add temporary additional value to a product or service to reach specific marketing objectives
Promotions try to change behavior
weekend offers temporary games Direct inducements that offer extra incentives to move the product from the manufacturer to the consumer
one store several promotional offers, till 30 September …
weekly offers e-coupon
co-promotion with other brands promotion of private labels
plannable rewards for efforts instant rewards collection for plannable rewards
Adds value to the product
Creates differentiation among brands
Helps immediate sales (Advertising helps long-term)
Emphasizes price instead of building brand equity
extent of discount Framing of these promotional offers?
What do you prefer? „BIG” discount
30 % off favourable price
„it is a big discount” Will you be attracted by 50
% off for this weekend?
Would you spend 500 Supershop points* on coupons to get discounts for the value of HUF 42 013 that you don’t know? *500 Supershop points you get for purchases of HUF 50 000
„good price” good decision
amount of saving percentage of saving
30 % off on Saturday or spending 500 (HUF / points on coupons to get the 30 % discount and some other rewards?
Percentage and amount of saving, new and old price.
Is saving HUF 20 000 for a bike attractive?
this is 20 % off
30 % off for any products of one particular brand?
Which is more attractive saving HUF 3108 (30 % off) or saving HUF 2073 (35 % off)?
Chance to win a car every day in reward of purchasing anything, even just a piece of bread?
Lottery for every purchase of HUF 4000 – chance of instant win of Citroen C4 or wellness weekends
(700x) or 100 000 x 100 Supershop points
100 Supershop points = purchase of HUF 100 000
who would uploade AP code? Promotional objectives
To Stimulate Demand
To Improve the Marketing Performance of Resellers
To Supplement Advertising, Personal Selling and Public Relations
To increase the purchase volume
Trial - to get the customer to use the product for the first time
an image for a brand
Loyalty - repeat purchase probability
•Compensate for a lack of advertising •Compensate for a negative image •Reverse a sales decline
Sales promotion strategy influencing factors:
* customer needs
* customer purchase rationale
* market positioning
* product life-cycle
* communication strategy
* competitive action
* distributor issues
Price based techniques price off coupons cash-back more product free offers…