Sales promotion can play a vital role in driving product sales but it can also be a significant source of revenue & brand awareness for brand owners who license their intellecutal property for promotional campaigns. This section provides information and insight into the different types of sales promotion; premium sourcing; promotional agencies and brands; insurance & legal issues; sources of help and other key elements of interest.

From fast food to on-pack, understand some of the different types of promotional tools that are open to brand owners, licensees and marketing teams and the benefits that sales promotion can provide.

Benefits & Considerations

Sales promotions are an extremely important tool within the marketing mix for those wishing to drive products sales or exploit their intellectual property. As licensed products find it harder to get into retail, promotions are increasingly being used to drive revenue and exposure.

The Audience
The primary consideration with any promotion is to identify a particular audience. In the licensing market the audience often needs to be large to maximize exposure and returns. Therefore promotions in the licensing industry tend to focus on large volume products with a high household penetration. The service sector can be an effective partner as its consumer base also tends to be large and easily reached by various forms of media.

Income Generation

• Generally the licensees will benefit from the use of licensing related promotions by driving more customers to its product or service.
• The premium companies will benefit because they will supply larger volumes of items.
• The licensors will derive an income from the use of their brand and the increased exposure it will bring, hopefully encouraging other areas of its business to also expand.
• The service or main product using the licensed brand in its promotion benefits by providing its target market with a favourable item and/or association that drives purchase.

Types of Promotion

In-Pack
An in-pack promotion offers an item, product or coupon inside a pack, generally free of charge. A good example for this type of promotion is the cereal market. The customer sees a promotion on a cereal pack and gets a free product when he purchases the pack. The license holder benefits as his brand can be seen on millions of packs of cereal, and the licensee may also advertise the promotion on TV increasing the exposure even further. The cereal manufacturer benefits because the promotion attracts customers to their product and then rewards them for the purchase. Other markets where this practice is common is the tea market and the biscuit market.

Self-Liquidating
A self-liquidating promotion funds itself by offering a premium to a consumer in return for one or more proofs of purchase plus money. (A premium is a promotional item of merchandise used as a gift or reward). An example can been seen in the snacks market where the consumer will see a promotion on millions of crisp packets and have to buy one or more, cut out the tokens from the packs and/or send off a sum of money to get the premium which is typically an item such as a mug, T-shirt or CD. Again the licensee may advertise the promotion on TV which will in turn promote the license.

Fast-Food promotions
Most fast-food outlets view themselves as family eating-centers. Therefore in order to make the children happy and drive demand they will run a promotion that rewards them for eating in their outlet. Typically the children will get a meal and a free toy relating to the promotion. Often the fast food outlet will advertise on TV the fact that this meal is available and demonstrate the premium to entice the kids into the store, or rather to ask their parents to take them to the store! Often the promotion will be related to a movie release.

The licensor will benefit from the in-shop window displaying their brand and so from the TV promotion. McDonalds for example has 30,000 outlets in 119 countries, serving 46 million customers each day and a promotion shifting 60 million premium-items is not uncommon.

Cross Promotion
A cross-promotion is where two or more brands are promoted together, often having creating a particular joint product or service. Typically one brand carries an offer for the other and in many cases this is reciprocated. The advantage of this type of promotion is that it may allow each brand to reach a market they were unable to penetrate by themselves.

Tactical Promotion
The core equities of a particular brand may fit perfectly with what a service is trying to offer. For example an insurance company may wish to advertise the fact that it is offering very competitive car insurance policies. Therefore using a well-known car related cartoon may support its efforts. The insurance company’s promotional campaign may include TV and newspaper advertising using the cartoon as its message mechanic. The licensor will again benefit from the media exposure. Other markets where this mechanic is common are the travel, motoring, and health markets.
 

Support Organisations

Several useful organisations exist that may be able to help with elements of sales promotion: