290 CHAPTER15 DESIGNING ANDMANAGINGINTEGRATEDMARKETINGCOMMUNICATIONS
Farris and Quelch, however, counter that sales promotion enables manufactur-
ers to adjust to short-term variations in supply and demand, test high list prices, sell
more than they would ordinarily sell at the list price, adapt programs to different con-
sumer segments, induce consumers to try new products, and lead to more varied retail
formats. On the consumer side, sales promotion raises awareness of prices and helps
consumers feel satisfied as smart shoppers.^35Major Decisions in Sales Promotion
In using sales promotion, a company must establish its objectives, select the tools,
develop the program, pretest the program, implement and control it, and evaluate the
results.
➤ Establishing objectives.Sales-promotion objectives are derived from broader
promotion objectives, which are derived from more basic marketing objectives that
are developed for the product. The specific objectives for sales promotion vary with
the target market. For consumers, objectives include encouraging purchase of
larger-size units, building trial among nonusers, and attracting switchers away from
competitors’ brands. For retailers, objectives include persuading retailers to carry
new items and higher levels of inventory, encouraging off-season buying, offsetting
competitive promotions, building brand loyalty, and gaining entry into new retail
outlets. For the sales force, objectives include encouraging support of a new product
or model, encouraging more prospecting, and stimulating off-season sales.^36
➤ Selecting consumer-promotion tools.The main consumer-promotion tools are
summarized in Table 5.3. We can distinguish between manufacturer promotions
and retailer promotions. The former is illustrated by the auto industry’s frequent
use of rebates and gifts to motivate test-drives and purchases; the latter includes
price cuts, retailer coupons, and retailer contests or premiums. We can also
distinguish between sales-promotion tools that are “consumer-franchise building,”
which reinforce the consumer’s brand understanding, and those that are not. The
former imparts a selling message along with the deal, as in the case of coupons that
include a selling message. Sales-promotion tools that are not consumer-franchise
building include price-off packs, premiums that are unrelated to a product, contests
and sweepstakes, consumer refund offers, and trade allowances.
➤ Selecting trade-promotion tools.Manufacturers can use a number of trade-promotion
tools, as shown in Table 5.4, to (1) persuade an intermediary to carry the product,
(2) persuade an intermediary to carry more units, (3) induce retailers to promote
the brand by featuring, display, and price reduction, and (4) stimulate retailers and
their salespeople to push the product. The growing power of large retailers has
increased their ability to demand trade promotion at the expense of consumer
promotion and advertising, so manufacturers often spend more on trade promotion
than they would like.^37
➤ Selecting business- and sales force promotion tools.Companies spend billions of dollars on
business- and sales force promotion tools, shown in Table 5.5, to gather business
leads, impress and reward customers, and motivate the sales force to greater effort.
Companies typically develop budgets for each business-promotion tool that remain
fairly constant from year to year.
➤ Developing the program.In deciding to use a particular incentive, marketers have to
consider: (1) the sizeof the incentive (a certain minimum is necessary if the promotion
is to succeed; a higher level will produce more sales response but at a diminishing
rate); (2) the conditionsfor participation (whether to offer the incentive to everyone or