Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e- Advertising and Sales
Promotion
Text © The McGraw−Hill
Companies, 2002478 Chapter 16
customers to buy a product by a certain date. Each year, about 300 billion coupons
are distributed—and consumers redeem enough of them to save, in total, nearly
$4 billion. Coupon distribution has dropped off some in recent years but still aver-
ages over 3,000 coupons per household in America!^36All of these sales promotion efforts are aimed at specific objectives. For example,
if customers already have a favorite brand, it may be hard to get them to try anything
new. Or it may take a while for them to become accustomed to a different product.
A free trial-sized bottle of mouthwash might be just what it takes to get cautious con-
sumers to try, and like, the new product. Such samples might be distributed house to
house, by mail, at stores, or attached to other products sold by the firm. In this type
of situation, sales of the product might start to pick up as soon as customers try the
product and find out that they like it. And sales will continue at the higher level after
the promotion is over if satisfied customers make repeat purchases. Thus, the cost of
the sales promotion in this situation might be viewed as a long-term investment.
When a product is already established, consumer sales promotion usually focuses
on stimulating sales in the short term. For example, after a price-off coupon for a soft
drink is distributed, sales might temporarily pick up as customers take advantage of
buying at a lower price. They may even consume more of the soft drink than would
have otherwise been the case. However, once the coupon period is over, sales would
return to the original level or they might even decline for a while. This is what hap-
pens if customers use a coupon to stock up on a product at the low price. Then it
takes them longer than usual to buy the product again.
When the objective of the promotion is focused primarily on producing a
short-term increase in sales, it’s sensible for the marketing manager to evaluate the
cost of the promotion relative to the extra sales expected. If the increase in sales
won’t at least cover the cost of the promotion, it probably doesn’t make sense to
do it. Otherwise, the firm is “buying sales” at the cost of reduced profit.Trade shows are a very important element in the promotion blend for many marketers who target business customers. Computer-
generated checkout coupons allow a producer to target final consumers who have purchased a competing brand, or alternatively to
encourage a customer to buy the same brand again in the future.
Internet
Internet Exercise Catalina Marketing Corporation is a supplier of in-store,
at-home, and online consumer promotions. Go to the Catalina website
(www.catalinamktg.com) and select the shopping cart icon for in-store. Then
review information about its Retail programs. Briefly describe, in your own
words, how the Direct Mail program works, and describe a situation in which
a manufacturer might find it useful.