Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e

16. Advertising and Sales
    Promotion

Text © The McGraw−Hill

Companies, 2002

Advertising and Sales Promotion 477

middlemen lower prices on many of its products and supporting those products with

more advertising and promotion to final consumers. P&G believes that this

approach builds its brand equity, serves consumers better, and leads to smoother-

running relationships in its channels. Not all retailers are happy with P&G’s

changes. However, given concerns about the impact of trade promotion on brand

loyalty, the number of producers who follow P&G’s lead is likely to grow.

Firms are also experimenting with other approaches. For example, some reim-

burse middlemen for promotion effort in proportion to their sales to final consumers.

This supports middlemen who actually increase sales to final consumers—which can

be quite different from just giving sales promotion dollars to middlemen who sim-

ply make the product available. Making the product available is a means to an end;

but if making it available without producing sales is all that is accomplished, the

sales promotion doesn’t make sense.^33

Another problem in the sales promotion area is that it is easy to make big, costly

mistakes. Because sales promotion includes a wide variety of activities—each of

which may be custom-designed and used only once—it’s difficult for the typical

company to develop skill in this area. Mistakes caused by lack of experience can be

very costly too. One promotion sponsored jointly by Polaroid and Trans World Air-

lines (TWA) proved to be a disaster. The promotion offered a coupon worth 25

percent off the price of any TWA ticket with the purchase of a $20 Polaroid cam-

era. The companies intended to appeal to vacationers who take pictures when they

travel. Instead, travel agents bought up many of the cameras. For the price of the

$20 camera, they made an extra 25 percent on every TWA ticket they sold. And

big companies bought thousands of the cameras to save on travel expenses. This is

not an isolated example. Such problems are common.^34

Sales promotion mistakes are likely to be worse when a company has no sales

promotion manager. If the personal selling or advertising managers are responsible

for sales promotion, they often treat it as a “stepchild.” They allocate money to sales

promotion if there is any “left over” or if a crisis develops. Many companies, even

some large ones, don’t have a separate budget for sales promotion or even know

what it costs in total.

Making sales promotion work is a learned skill, not a sideline for amateurs. That’s

why specialists in sales promotion have developed—both inside larger firms and as

outside consultants. Some of these people are real experts and are willing to take

over the whole sales promotion job. But it’s the marketing manager’s responsibility

to set sales promotion objectives and policies that will fit in with the rest of each

marketing strategy.^35

Earlier we noted that sales promotion can be aimed at final consumers or users,

channel members, and company employees. Let’s look at some of the sales promo-

tion tools used for these different targets and what objectives they are expected to

accomplish.

Sales promotion is

hard to manage

Not a sideline for

amateurs

Sales promotion for

final consumers

or users

Much of the sales promotion aimed at final consumers or users tries to increase

demand, perhaps temporarily, or speed up the time of purchase. Such promotion

might involve developing materials to be displayed in retailers’ stores—including

banners, sample packages, calendars, and various point-of-purchase materials. The

sales promotion people also might develop special displays for supermarkets. They

might be responsible for sweepstakes contests as well as for coupons designed to get

Different Types of Sales Promotion for Different Targets