Promotion

Sales promotion: “action communications to generate extra sales, both from existing customers purchasing more products and by temporarily attracting new customers on the basis of an incentive or a deal” - (De Pelsmacker, Geuens and Van den Bergh, 2010)

The aim of promotion is usually to publicize a product and enable communication towards customers to follow up by purchasing the product or endorsing the brand. (Dibbs., et al, 2016).

There are many different factors that influence sales promotions, these include:

·         Communications clutter

·         Lack of differentiation

·         Distribution channel power

·         Measurability

·         Short term orientedness

·         Buying decision taken in store

·         Declining brand loyalty

Why are promotions used?

• To build a database – by getting emails so they can advertise to them.
• De-seasonalise sales – an example of this is Coca Cola usually reducing their prices around the winter time as this is the hardest time for them to make sales due to the cold weather.
• Reward loyal customers – an example from Coca Cola is the reward scheme where customers get points from purchasing Coca Cola items and can load the points up to the Coca Cola website where they can then gain prizes for getting a certain number of points.
• Gain new customers – by Coca Cola reducing their prices and creating offers for purchasing multipacks of Coca Cola, they are attracting new customers who will hopefully stay loyal to the brand.
• Develop new sales leads – by advertising themselves accordingly, Coca Cola can gain new customers and further succeed in being better than their competitors such as PepsiCo.

(Dibbs., et al, 2016).

Trade Promotions:

It is important when Coca Cola is trying to get retailers to put their products on their shelves that they have trade promotions which can create a better relationship so that Coca Cola can work with the retailer to benefit both their business as well as the retailers.

Trade promotions include:

• Buy back allowance
• Count and recount
• Free merchandise
• Dealer listing
• Premium or push money
• Sales competitions (Dibbs., et al, 2016).

Promotional Mix:

PR:

“The deliberate, planned and sustained effort to establish and maintain mutual understanding between an organisation and its publics”. (Dibbs., et al, 2016).

PR Publics include:

• Customers – past, present, future
• Suppliers
• Distributors
• Employees
• Wider community
• Media
• Competitors
• PR Tools:
• Publicity: through celebrities shown above such as Marc Jacobs, Karl Lagerfeld, Selena Gomez and many others.
• Community involvement: priority areas include – women (entrepreneurship), water (access to water, conservation and recycling), health (education, young development, other community activities). (The Coca Cola Foundation, n.d.) 
• Charity
• Awards (Dibbs., et al, 2016).

Goals:

 Image creation – with sponsoring Selena Gomez, the Coca Cola company created the image that they were part of the younger generation too and not just for older generations as their Bill Cosby advert suggested years ago. 

Increase sales – many people buy products that are endorsed by idols. An example is the Kardashians and their sponsorship with Sugar Bear Hair Vitamins which leads to millions of young girls buying the product as it was promoted by the Kardashians who are known for their good looks.This is the same with Coca Cola, by sponsoring those celebrities who are in the public eye, many will want to buy and drink Coca Cola due to the fact their idols endorse it.

Image: @kimkardashian Instagram

Brand repositioning – Coca Cola uses their sponsorships to appeal to different generations such as appealing to younger people through sponsoring Selena Gomez who has an audience of young people.

Raising awareness of their brand.

Target new market segments.

Gain publicity – through getting products promoted by celebrities, such as Selena Gomez promoting 

Coca Cola which led to many young girls and boys buying Coca Cola to send pictures of them supporting Selena Gomez’ version of the bottle with her lyrics on them. This obviously boosted Coca Cola’s sales and their popularity. By young people reposting pictures of themselves with a Coca Cola bottle with Selena Gomez’s lyrics on it, this provided Coca Cola with free promotion.

Internet Promotion:

Happiness Machine: this was an advertisement for Coca Cola to boost their sales through introducing the Happiness Machine. This marketing strategy was to get free promotion without having to pay anything towards it. The idea behind the Happiness Machine was to offer rewards and free Coca Cola from a vending machine after buying one drink. This video was posted to the Coca Cola Company’s Facebook page and their Twitter page. After 10 days, the video ended up with 820,000 videos. This didn’t cost Coca Cola anything as it was shared through social media which provided Coca Cola with popularity as people were looking to find a Happiness Machine near them. (Broad, 2014).

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When sponsorships go wrong:

Sponsorships are risky. An example is Wayne Rooney’s sponsorship deal with Coca Cola in 2011. After Wayne Rooney was rumoured to be cheating on his pregnant wife, Coca Cola issued the statement – “'Our contract with Wayne Rooney came to an end last year and we mutually agreed that we would not renew our relationship.” (Sportsmail Reporter, 2011). Coca Cola saw that Wayne Rooney was tarnishing his image and this would lead to Coca Cola being associated with a bad image therefore they pulled out of the sponsorship to spare their brand name and brand image. This was a smart business move as many would have seen Coca Cola in a different light if they had went on with their sponsorship deal and advertised him with their products after such a scandal.

Examples of Coca Cola sponsorships:

Karl Lagerfeld: founder of Chanel, promotes ‘Coca Cola Light’ that is marketed more towards women. 

Brian Urlacher: American football player. This deal with Coca Cola helped to get young people who were his fans to notice the brand and purchase Cokes because their idol endorses it.

Selena Gomez: singer, actress and songwriter with a large fanbase comprised of children all the way up to older generations. The Coca Cola advert she featured on her Instagram page helped Coca Cola reach the younger generations as they wanted to compete with their rival PepsiCo who is usually known for having younger celebrities endorsing them. This photo she featured on her Instagram then went on to become the most liked picture on Instagram at the time she posted. This gave Coca Cola a good audience and many of Selena Gomez's fans uploaded pictures of themselves with the Coca Cola bottle with her lyrics on it. This gave Coca Cola free advertisement as it spread through the internet and many would go out and buy the bottles which boosted Coca Cola's sales.

Image: @selenagomez Instagram

Marc Jacobs: a luxury brand designer who endorsed Coca Cola when he redesigned some Diet Coke bottles. This appealed to many as he is a luxury designer so by being associated with Coca Cola, it made Coca Cola seem luxury too.