Page 372 - Introduction to Business

346 PART 3 Marketing

EXHIBIT 10.2
Major Sales Promotion Techniques

Used For

Technique Industrial Buyers Consumers
Allowance X
Contest X X
Coupon X
Cross coupon X
Deal X X
End display X
Incentive X X
In-pack X
Mail-in X
P-O-P (Point-of-Purchase) X
Premium X
Purchase with purchase X
Samples X X
Sponsorship X X
Sweepstakes X
Trade shows X

results. Since sales promotion programs can be implemented more quickly
than advertising, as well as produce results more quickly, sales promotions
many times tend to be preferred over advertising.
The above factors that explain the increasing popularity of sales promotions are
essentially internal, that is, occur within companies. In addition to these internal
reasons, a number of external developments are also important.
• The number of new brands, especially consumer brands, has increased. This
brand proliferation means that sales promotions will be used to obtain limited
retail shelf space.
• Competitors are turning to sales promotion. When this happens, companies
are left with little choice but to accelerate their own sales promotion efforts.
• During economic recessions, sales promotions can be used to reduce inven-
tory and improve a company’s liquidity. Also, sales promotion techniques that
involve price reductions in recessionary periods tend to be effective.
• The size and aggressiveness of such retailers as chain supermarkets, drug
stores, and discount houses have increased. These and other large retailers
have been putting more pressure on manufacturers for support and
allowances.
allowances Concessions offered to Allowances are concessions offered to retailers in exchange for services ren-
retailers in exchange for services dered. Examples include free goods, displays, advertising, and purchase discounts.
rendered
Cosmetics manufacturers frequently provide department stores with advertising
allowances when the department stores feature the manufacturers’ products in
local newspaper ads.
contests A form of sales promotion in Contests are competitions for which prizes are awarded. They can be directed
which a prize is awarded for a to retailers or consumers. Retailer sales personnel, for example, can be given prizes
competition
for selling specified quantities of a manufacturer’s products. Cosmetics manufac-
turers frequently use contests to obtain increased sales for their products by sales

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