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Definition
| A controlled, integrated program of communications methods and materials designed to present a company and its products to prospective customers; to communicate need-satisfying attributes of products toward the end of facilitating sales and thus contributing to long-run profit performance. |
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| 4 Major Tools of Promotional Strategy |
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Definition
| (1) advertising, (2) personal selling, (3) reseller (channel member) support, (4) publicity, and (5) sales promotion. |
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Term
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Definition
| The belief that by building strong consumer (or industrial user) demand for a product, the manufacturer will force channel members to automatically promote the manufacturer’s product because it is in their obvious self-interest to do so. |
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Term
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Definition
| This approach requires more direct involvement by the manufacturer with channel members in the use of promotional strategies. The manufacturer does not push channel members into promoting its product, but instead seeks their participation and cooperation to provide effective promotional strategies that will be mutually beneficial to the manufacturer and the channel members |
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Term
| Four major shortcomings with many “Push Promotions” when they were not developed as an integral part of a more comprehensive program of channel member support: |
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Definition
1. Frequent promotion deals erode consumer franchises for existing manufacturer brands, add to the expense of establishing new brands, and increase consumer price sensitivity.
2. Frequent discounts to channel members offered on products used in trade deals result in deal-to-deal purchasing by channel members and hence uneven factory shipments and increased production costs.
3. Trade buyers often take advantage of discounts but fail to provide the merchandising support called for and do not pass all price reductions through to consumers.
4. Some channel members respond to deals by purchasing well above their own requirements and reselling the excess deal merchandise to other retailers at a profit. |
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Term
| Six categories that most Basic Push Promotional Strategies fall into |
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Definition
1. Cooperative Advertising
2. Promotional Allowances
3. Displays and Selling Aids
4. In-Store Promotions
5. Contests and Incentives
6. Special Deals and Merchandising Campaigns |
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Term
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Definition
| This is one of the most pervasive forms of promotional assistance. One of the most common variations is sharing in the cost on a 50-50 basis up to some percentage of the retailer’s purchases from the manufacturer. For example, if a channel member made purchases of $100,000 from the manufacturer, the amount of advertising funds available to the retailer would be $3000 if the maximum allowance were 3 percent of purchases. |
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Term
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Definition
| The most typical strategy used for promotional allowances is to offer the channel member a direct cash payment or a certain percentage of the purchases on particular products. |
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Term
| Displays and Selling Aids |
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Definition
| Common displays include point-of-purchase displays such as cardboard cutouts set up in stores, dealer identification signs, promotional kits, special in-store displays, and mailing pieces. Manufacturers often have difficulty in getting retailers to make use of these materials because channel members are usually flooded with such promotional material to the point that it is simply thrown away or never even opened. The average supermarket at any given time is faced with 1,000 items offered on promotions, but has the capacity to set up only about 50 end-of-aisle displays each week. |
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Term
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Definition
| Most in-store promotions are short-term events designed to create added interest and excitement for the manufacturer’s products. The key issue for the channel manager is whether the retailers perceive benefits from it. Thus the planning of a successful in-store promotion should always include considerations of the potential benefits for the retailers involved. |
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Term
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Definition
| Contests and incentives sponsored by manufacturers to stimulate channel member sales efforts are another popular form of promotion. Sometimes tying it in to some major event at the local, state, national or even international level can significantly increase the impact of a contest or incentive promotion. Using significant events such as the Olympics can enhance the meaning and excitement of contests and incentives for channel member salespeople. |
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Term
| Special Promotional Deals and Merchandising Campaigns |
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Definition
| This is a catch-all category. It includes a variety of push-type promotional deals such as discounts to channel members to encourage them to order more products, favorable offers to consumers to foster larger purchases (for example, buy one get one free), percentage or cents-off offers, rebates, coupons, prizes, and premium offers. These are especially popular in the grocery and drug fields. Promotional deals and merchandising campaigns may overlap one or more of the five promotional strategies previously discussed. |
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Term
| Trade loading or forward buying |
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Definition
| This is where manufacturers induce retailers and wholesalers to buy far more products than they can sell in a reasonable period of time. The result is that at any given time, $75 to $100 billion of merchandise is in the channel, stacked up in retailer and wholesaler warehouses as well as in trucks or railcars. This slows down the distribution process, so that it takes an average of 84 days for a product to travel from factory floor to retail shelf. It is estimated that only 30 percent of the trade promotion discounts offered by manufacturers are actually passed through to consumers in the form of lower prices. Of the remaining 70 percent, 35 percent is lost in inefficiencies and the other 35 percent goes directly into retailers’ and wholesalers’ pockets. |
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Term
| “Kinder and Gentler” Push Promotion Strategies |
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Definition
These strategies stress more finesse, subtlety, and a more circuitous route in the course of doing so. The most important of these strategies are:
1. Training Programs
2. Quota Specification
3. Missionary Selling
4. Trade Shows |
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Term
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Definition
| These are aimed at improving the performance of channel members’ salespeople. Such programs can demonstrate in a highly visible way the manufacturer’s commitment to helping channel members in an area in which many of them need help. These programs must be planned to meet the particular needs of the channel members and be implemented in a manner that is acceptable to them in order to be effective. |
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Term
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Definition
| These are viewed as a promotional strategy because manufacturers set quotas in the belief that they will spur channel members on to greater effort in return for rewards offered for reaching or exceeding the quotas. The key to using quotas properly lies in the context in which they are presented to the channel members. If they are presented in a coercive fashion, they may produce ill will and conflict rather than support. If the manufacturer’s line does not make up an important part of the channel member’s product mix, the quota may be ignored. On the other hand, if quotas are developed in conjunction with the channel members, and are presented in the context of providing information on the sales potentials in the channel members’ territories, they can be a positive force in fostering channel member support. |
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Term
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Definition
This refers to any of the manufacturer’s salespeople who are specially assigned to supplement the selling activities of channel members. Sometimes called "detail men".
In the consumer goods industry, missionary salespeople may be called upon to do any of the following:
1. Check wholesale and retail inventory levels
2. Calling on retailers to inform them of new products
3. Helping arrange window and in-store displays
4. Answering the wholesalers’ and retailers’ questions and providing advice and training
5. Trying to promote goodwill
6. Taking orders for merchandise |
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Term
| In the industrial market, Missionary Salespeople may be involved in the following: |
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Definition
1. Training distributor salespeople
2. Accompanying distributor salespeople on sales calls to assist their selling efforts
3. Taking initial orders for new products from the final user
4. Providing technical assistance
5. Helping distributors’ salespeople to close sales, especially those that require technical knowledge beyond the scope of the distributors’ salespeople. |
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Term
| The main objective of participating in a trade show (other than making sales) |
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Definition
| To attain the maximum impact and gain the widest recognition for the firm’s products – especially new products – and thus to enhance the firm’s recognition and respect among its relevant publics. |
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Term
| 4 things that Trade shows can do |
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Definition
| (1) provide an opportunity to sell existing and new channel members substantial quantities of product; (2) provide an opportunity to show channel members new products, strategies, and promotional programs on a face-to-face basis; (3) offer a chance to socialize with channel members; and (4) can create a sense of pride and belonging in the channel members that sell its products. Channel members thus see themselves as being part of a winning team that leads the industry. |
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