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Part Five Developing the Integrated Marketing Communications Program
Belch: Advertising and
Promotion, Sixth Edition
Exhibit 16-32 Dell’s
sweepstakes started a
promotional battle in the
personal computer industry
V. Developing the
Integrated Marketing
Communications Program
16. Sales Promotion © The McGraw−Hill
Companies, 2003
developed as a tactic for getting buyers to sample new products. But they have become
a common, and costly, way of doing business. 73 In many areas of the country, supermarkets
have gotten into the trap of doubling or even tripling manufacturers’ coupons,
which cuts into their already small profit margins. Fast-food chains have also fallen
into the trap with promotions featuring popular menu items, such as Burger King’s
Whopper for 99 cents. The sales promotion war spread to yet another industry recently
when Dell Computer began using sales promotion offers to help sell its personal computers.
Dell’s Trip-a-Day Giveaway offered consumers a chance to win a vacation
worth up to $50,000 (Exhibit 16-32). Competitors quickly matched Dell’s promotion:
Compaq and Hewlett Packard developed their own sweepstakes and also began using
rebates. Gateway gave away free printers and scanners with certain PCs, and Apple
offered no-payment financing. Industry analysts have expressed concern over the
impact the promotional war will have on these companies as profit margins in the PC
industry are already very low. 74
Marketers must consider both the short-term impact of a promotion and its longterm
effect on the brand. The ease with which competitors can develop a retaliatory
promotion and the likelihood of their doing so should also be considered. Marketers
must be careful not to damage the brand franchise with sales promotions or to get the
firm involved in a promotional war that erodes the brand’s profit margins and threatens
its long-term existence. Marketers are often tempted to resort to sales promotions to
deal with declining sales and other problems when they should examine such other
aspects of the marketing program as channel relations, price, packaging, product quality,
or advertising.