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Belch: Advertising and
Promotion, Sixth Edition
V. Developing the
Integrated Marketing
Communications Program
16. Sales Promotion © The McGraw−Hill
Companies, 2003
stock new products. For example, Lever Brothers used heavy sampling and high-value
coupons in the successful introduction of Lever 2000 bar soap. However, in addition
to these consumer promotions, the company used discounts to the trade to encourage
retailers to stock and promote the new brand.
While trade discounts or other special price deals are used to encourage retailers
and wholesalers to stock a new brand, marketers may use other types of promotions to
get them to push the brand. Merchandising allowances can get retailers to display a
new product in high-traffic areas of stores, while incentive programs or contests can
encourage wholesale or retail store personnel to push a new brand.
Maintain Trade Support for Established Brands Trade promotions are
often designed to maintain distribution and trade support for established brands. Brands
that are in the mature phase of their product life cycle are vulnerable to losing wholesale
and/or retail distribution, particularly if they are not differentiated or face competition
from new products. Trade deals induce wholesalers and retailers to continue to
carry weaker products because the discounts increase their profit margins. Brands with
a smaller market share often rely heavily on trade promotions, since they lack the funds
required to differentiate themselves from competitors through media advertising.
Even if a brand has a strong market position, trade promotions may be used as part
of an overall marketing strategy. For example, Heinz has relied heavily on trade promotions
to hold its market share position for many of its brands. Many consumer
packaged-goods companies count on trade promotions to maintain retail distribution
and support.
Encourage Retailers to Display Established Brands Another objective
of trade-oriented promotions is to encourage retailers to display and promote an
established brand. Marketers recognize that many purchase decisions are made in the
store and promotional displays are an excellent way of generating sales. An important
goal is to obtain retail store displays of a product away from its regular shelf location.
A typical supermarket has approximately 50 display areas at the ends of aisles, near
checkout counters, and elsewhere. Marketers want to have their products displayed in
these areas to increase the probability shoppers will come into contact with them.
Even a single display can increase a brand’s sales significantly during a promotion.
Manufacturers often use multifaceted promotional programs to encourage retailers
to promote their products at the retail level. For example, Exhibit 16-26 shows a
brochure that Chicken of the Sea International provided to retailers showing the various
promotions the company planned to use during the year for its Chicken of the Sea
Exhibit 16-26 This
brochure shows retailers the
various promotions Chicken
of the Sea planned to use
for its various products
545
Chapter Sixteen Sales Promotion