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Part Five Developing the Integrated Marketing Communications Program
Belch: Advertising and
Promotion, Sixth Edition
Figure 16-1 Types of sales
promotion activities
V. Developing the
Integrated Marketing
Communications Program
16. Sales Promotion © The McGraw−Hill
Companies, 2003
Consumer-Oriented Promotions
Samples
Coupons
Premiums
Contests/sweepstakes
Refunds/rebates
Sales Promotion
Trade-Oriented Promotions
Contests and dealer incentives
Trade allowances
Point-of-purchase displays
Training programs
Trade shows
Bonus packs Cooperative advertising
Price-offs
Frequency programs
Event marketing
The Growth of Sales Promotion
While sales promotion has been part of the marketing
process for a long time, its role and importance
in a company’s integrated marketing
communications program have increased dramatically over the past decade. Consumer
sales promotion–related spending increased from $56 billion in 1991 to nearly
$100 billion in 2001. 4 Marketers also spend an estimated $150 billion each year on
promotions targeted at retailers and wholesalers. Consumer packaged goods firms
continue to be the core users of sales promotion programs and tools. However, sales
promotion activity is also increasing in other categories, including health care, computer
hardware and software, consumer electronics, and service industries.
Not only has the total amount of money spent on sales promotion increased, but the
percentage of marketers’ budgets allocated to promotion has grown as well. For many
years advertising was the major component in the promotional mix of most consumerproduct
companies. Until the 1980s, nearly half of marketers’ promotional dollars was
spent on advertising campaigns designed to create or reinforce brand awareness and
build long-term loyalty. However by the mid- to late 80s, a fundamental change had
occurred in the way most consumer-product companies were marketing their products.
The proportion of the marketing budget allocated to sales promotion rose sharply,
while the amount spent on media advertising declined. The increase in spending on
sales promotion at the expense of media advertising continued throughout the decade
of the 90s and into the new millennium. Currently, estimates are that marketers spend
between 60 and 75 percent of their promotional budgets on sales promotion, with the
remainder being allocated to media advertising. 5
Allocation of marketing budgets among consumer promotions, trade promotions,
and media advertising varies by industry and company. For example, trade promotion