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Chapter 14 Global Marketing Decisions:

Sales Promotion, Personal Selling, Special Forms of

Marketing Communication

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Sales Promotion

Sales promotion refers to any paid consumer or trade communication program of limited duration usually aimed at stimulating sales / trials– Price (rebates, discounts, coupons) vs. non-

price promotions (sampling, premiums, sweepstakes, contests, etc.)

– Consumer vs. trade promotions (increase availability in channel)

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Sales Promotion

Provide a tangible incentive to buyers (lower prices, etc.)Reduce the perceived risk associated with purchasing a product (sampling)Provide accountability for communications activity (results can be tracked)Provide method of collecting additional data for database (forms to be filled in)

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Sales Promotion: Global or Local

In countries with low levels of economic development, low incomes limit the range of promotional tools available– Free samples, demonstrations

Market maturity can also be different from country to country– Coupons and sampling in growing markets

– Trade allowances and loyalty programs in mature markets

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Sales Promotion: Global or Local

Local perceptions of a particular promotional tool or program can vary– Coupon usage not popular in India

Local regulations may rule out use of a particular promotion in certain countriesTrade structure in the retailing industry can affect the use of sales promotions– Consolidated retail structures require more trade

promotions (USA, Europe)– Fragmented retail structures (India) require less trade

promotions

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Sampling

Sampling– Provides consumer with opportunity to try

product at no cost– May be distributed in stores, in the mail,

through print media, at events, or door-to-door– Point-of-use sampling (Starbucks’ chill patrols;

Mylanta introduction in India)– Point-of-dirt sampling (Unilever’s Lever 2000

hand wipes in food courts and petting zoos)

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Couponing

Couponing– Printed certificates entitle the bearer to a price

reduction or some other special consideration for purchasing a particular product

Couponing accounts for 70% of consumer promotion spending in the US

Free standing inserts, on-pack coupons, in-pack coupons, cross coupons)

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Couponing

Stimulate trial by non-users

Operant conditioning of users (Kroger’s 20 cents a gallon price off on gas)

Not widely used in Asia since using a coupon is considered a sign of cheapness

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Couponing

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Sales Promotion: Issues and Problems

Consumer fraud– Pepsi promotion with Apple

Regulations vary by country– Europe regulates promotions heavily

Cultural dispositions to coupons and other sales promotions– Malaysia, India see coupon usage as embarrassing

– Islam frowns on gambling so sweepstakes may not work

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Personal Selling

Person-to-person communication between a company representative and potential buyersFocus is to inform and persuade prospectShort-term goal: make a saleLong-term goal: build relationshipBuyer and seller may come from different cultural backgrounds

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Personal Selling

Useful when countries regulate media heavilyJapan – comparative advertising is difficult hence product comparisons can be made on a face to face basisLow wage countries – cheaper to build a sales forceIssue: host country nationals or expats?

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Sales Force Nationality

Expatriates

Host country

Third country

Other options

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Expatriates

Advantages– Superior product

knowledge

– Demonstrated commitment to service standards

– Train for promotion

– Greater HQ control

Disadvantages– Higher cost

– Higher turnover

– Cost for language and cross-cultural training

Return

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Host Country

Advantages– Economical

– Superior market knowledge

– Language skills

– Superior cultural knowledge

– Implementation quicker

Disadvantages– Needs product training

– May be held in low esteem

– Language skills may not be important

– Difficult to ensure loyalty

Return

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Third Country

Advantages– Cultural sensitivity

– Language skills

– Economical

– Allows regional sales coverage

Disadvantages– May face identity

problems

– May be blocked for promotions

– Needs product and/or company training

– Loyalty not assured

Return

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Special Forms of Marketing Communications

Direct Marketing– Direct mail– Catalogs– Infomercials, Teleshopping

Event Sponsorship– Concerts, sporting events– Product placement in movies

Internet Communications

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Direct Marketing

Any communication with a consumer or business recipient that is designed to generate a response in the form of:– An order– Request for further information– A visit to a store or other place of business

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Direct Marketing vs. Mass Marketing

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One-to-One Marketing

Building from Customer Relationship Management– Identify customers and accumulate detailed information

about them

– Differentiate customers and rank them in terms of their value to the company

– Interact with customers and develop more cost efficient and effective forms of interaction

– Customize the product/service offered to the customer

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Catalogs

A magazine style publication that features photographs and extensive information about a company’s products

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Product Placements

Movies, TV programs, books, etc.Low attributions hence low skepticismCircumvent zipping and zappingRealistic slice-of-life placementEthically-charged productsFit of the brand with the placement segment and its effect on recall and attitudesRisk of the product being shown in an unfavorable lightJoint promotions between the movie and the productToo many placements in a program