BASIC MARKETING — SALES PROMOTION QUIZLET

Sales Promotion

A short-term incentive that encourages people to buy something immediately by lowering the price or adding value.

"Limited-time offer," "buy now," or "extra incentive"

Trade Sales Promotion

Promotions directed toward wholesalers and retailers rather than final customers.

Manufacturer encourages stores to sell its products

Consumer Sales Promotion

Promotions directed toward the final customer who buys or uses the product.

Company encourages shoppers to buy

Trade Allowance

A manufacturer gives a wholesaler or retailer a price reduction.

Manufacturer offers a discount to a store

Push Money

Money given to intermediaries to encourage them to promote or sell a product.

Manufacturer pays an intermediary to push sales

Coupon

Gives customers an immediate price reduction when purchasing a product.

Save $5 at checkout

Rebate

A cash refund customers receive after purchasing a product during a specified period.

Buy now, receive $20 back later

Premium

An extra item offered to customers, usually with proof of purchase.

Buy shampoo, get a free hair product

Loyalty Marketing Program

A program designed to build long-term relationships with customers.

Company wants customers to keep coming back

Frequent-Buyer Program

A loyalty program that rewards customers for making repeated purchases.

Buy 9 coffees, get the 10th free

Sampling

Allows customers to try a product or service for free.

Free samples before buying

Point-of-Purchase (POP) Display

A promotional display inside a retail store that encourages purchases.

Special display near checkout or at the end of an aisle

Push Strategy (Trade Promotion)

Encourages wholesalers and retailers to move products through the distribution channel.

"Push product through channel"

Contests and Sweepstakes

Promotions designed to create interest and encourage customers to switch brands.

"Enter for a chance to win"

Brand Loyalty

Customers continue choosing the same brand.

"Repeat purchases"

Brand Switching

Customers change from one brand to another.

"Persuade competitor's customers"

Product Trial

Encouraging someone to try a product.

"First-time purchase"

Impulse Buying

Buying something spontaneously without planning to.

"Unplanned purchase in store"

In-Store Demonstration

Showing how a product works inside a store.

"Manufacturer demonstrates product to shoppers"

Trade Allowance = Discount to the store

Example: Coca-Cola offers Walmart a 15% discount for purchasing its products.

Push Money = Money to encourage selling

Example: A manufacturer pays a retailer an incentive to encourage the sale of its products.

Remember: Allowance = lower price. Push money = encourage selling.

Coupon vs. rebate

Coupon = Save immediately

Example: You use a $5 coupon at Publix and pay $5 less at checkout.

Rebate = Get money back afterward

Example: You buy a $100 blender and submit a claim to receive $20 back.

Remember: Coupon = NOW. Rebate = LATER.

Loyalty marketing vs. frequent-buyer program

Loyalty Marketing = Overall relationship

Example: Sephora offers members special discounts, new-product alerts, and personalized rewards.

Frequent-Buyer Program = Rewards repeated purchases

Example: A smoothie shop gives you one free smoothie after purchasing ten.

Remember: Loyalty = relationship. Frequent-buyer = repeated purchases.

Premium = Extra item for purchasing

Example: Buy a bottle of shampoo and receive a free mini conditioner.

Sampling = Try before buying

Example: Costco offers free food samples to shoppers.

Remember: Premium = reward with purchase. Sampling = free trial.