accepted by top management as an effective sales tool; more product managers are
qualified to use sales-promotion tools; and product managers are under greater pres-
sure to increase current sales. External factors include the following: The number of
brands has increased; competitors use promotions frequently; many brands are seen
as similar; consumers are more price-oriented; the trade has demanded more deals
from manufacturers; and advertising efficiency has declined because of rising costs,
media clutter, and legal restraints.
The rapid growth of sales-promotion media has created a situation of promotion
cluttersimilar to advertising clutter. Consumers might start tuning out, in which case
coupons and other promotion media will weaken in their ability to trigger purchase.
Manufacturers will have to find ways to rise above the clutter—for instance, by of-
fering larger coupon-redemption values or using more dramatic point-of-purchase dis-
plays or demonstrations.PURPOSE OF SALES PROMOTION
Sales-promotion tools vary in their specific objectives. A free sample stimulates con-
sumer trial, whereas a free management-advisory service aims at cementing a long-
term relationship with a retailer.
Sellers use incentive-type promotions to attract new triers, to reward loyal cus-
tomers, and to increase the repurchase rates of occasional users. New triers are of three
types—users of another brand in the same category, users in other categories, and fre-
quent brand switchers. Sales promotions often attract the brand switchers, because
users of other brands and categories do not always notice or act on a promotion.
Brand switchers are primarily looking for low price, good value, or premiums. Sales
promotions are unlikely to turn them into loyal users. Sales promotions used in mar-
kets of high brand similarity produce a high sales response in the short run but little
permanent gain in market share. In markets of high brand dissimilarity, sales pro-
motions can alter market shares permanently.
Today, many marketing managers first estimate what they need to spend in trade
promotion, then what they need to spend in consumer promotion. Whatever is left
they will budget for advertising. There is a danger, however, in letting advertising take
a back seat to sales promotion because advertising typically acts to build brand loy-
alty. But the question of whether or not sales promotion weakens brand loyalty is
subject to different interpretations. Sales promotion, with its incessant prices off,
coupons, deals, premiums, and blaring quality, may devalue the product offering in
the buyers’ minds. Buyers learn that the list price is largely a fiction. But before jump-
ing to any conclusion, we need to distinguish between price promotionsandadded-
value promotions.These examples show how certain types of sales promotion can
actually enhance brand image:■ The makers of Pine-Sol, a general liquid cleaning agent, ran a “Pine-Sol in Pine
Valley” sweepstakes in which Pine Valley was the habitat of the TV soap opera
All My Children.Sweepstake winners would travel to Los Angeles to meet the
stars and watch four days of filming. This association of an ordinary cleaning
agent with glamorous stars enhanced the brand image of Pine-Sol.
■ Toro, a major manufacturer of lawn mowers and snowblowers, wanted to sell its
snowblowers in early September. Knowing that most people would wait to buy
until the first snow, Toro offered to include Toro Snow Insurance: The company
promised to send a rebate of $50 to each September buyer if it didn’t snow be-
fore January. This sales promotion did not hurt, and may have helped, Toro’s
brand image.
■ Häagen-Dazs ran a cents-off sales promotion called Sweet Charity where the
price savings would be contributed to support public television. This offer en-
hanced the Häagen-Dazs image by making Häagen-Dazs “a patron of the arts.”
■ Akai, a Japanese manufacturer of stereo equipment and TV sets, managed to be-
come a TV set market leader in India by running value-added sales promotions.
It offered good trade-in value on black-and-white TV sets at the purchase of apart five
Managing and
Delivering Marketing(^598) Programs