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Belch: Advertising and
Promotion, Sixth Edition
V. Developing the
Integrated Marketing
Communications Program
accounts for nearly 50 percent of the budget for consumer packagedgoods
companies, with 27 percent going to consumer promotion and 24
percent to media advertising. 6 Moreover, a significant amount of the
monies that marketers allocate to media advertising is spent on ads that
deliver promotional messages regarding contests, games, sweepstakes,
and rebate offers. 7 Surveys have shown that marketers devote about 17
percent of their ad budgets to promotional messages. 8 Promotional messages
are also used to help attract attention to image-building ads. For
example, the ad shown in Exhibit 16-2 delivers a message informing
consumers of the Chevy Avalanche Outdoor Adventure Sweepstakes.
16. Sales Promotion © The McGraw−Hill
Companies, 2003
Reasons for the Increase in Sales
Promotion
The reallocation of the marketing budget concerned many marketers
who still viewed media advertising as the primary tool for brand building
and saw sales promotion programs as little more than gimmicks that contributed
little to brand equity. However, most have recognized that consumers
may love certain brands but often want an extra incentive to buy
them. Marketers also know they must partner effectively with trade
accounts, and this often means providing them with an additional incentive
to stock and promote their brands and participate in various promotional programs.
A major reason for the increase in spending on sales promotion is that the promotion
industry has matured over the past several decades. Increased sophistication and a
more strategic role and focus have elevated the discipline and its role in the IMC program
of many companies. 9 In the past, sales promotion specialists would be brought in
after key strategic branding decisions were made. Promotional agencies were viewed
primarily as tacticians whose role was to develop a promotional program such as a
contest or sweepstakes or a coupon or sampling program that could create a short-term
increase in sales. However, many companies are now making promotional specialists
part of their strategic brand-building team, a move that
puts sales promotion on par with media advertising. Promotional
agencies have expanded their integrated marketing
capabilities as well as their expertise in branding
and helping their clients build relationships with their
customers. For example, Exhibit 16-3 shows an ad for
DVC Worldwide, one of the leading promotion agencies,
that touts the agency’s expertise in strategy and brand
building.
There are also a number of other factors that have led
to the increase in the importance of sales promotion and
the shift in marketing dollars from media advertising to
consumer and trade promotions. Among them are the
growing power of retailers, declining brand loyalty,
increased promotional sensitivity, brand proliferation,
fragmentation of the consumer market, the short-term
focus of many marketers, increased accountability, competition,
and clutter.
The Growing Power of Retailers One reason
for the increase in sales promotion is the power shift in
the marketplace from manufacturers to retailers. For
many years, manufacturers of national brands had the
power and influence; retailers were just passive distributors
of their products. Consumer-product manufacturers
created consumer demand for their brands by using heavy
advertising and some consumer-oriented promotions,
such as samples, coupons, and premiums, and exerted
pressure on retailers to carry the products. Retailers did
Exhibit 16-2
Advertisements are often
used to deliver messages
about promotions such as
sweepstakes
Exhibit 16-3 DVC
Worldwide touts its
expertise in branding
515
Chapter Sixteen Sales Promotion