For many years, advertising was the major promotional mix element for most consumer-product companies. Over the two decades, however, marketers have been allocating more of their promotional dollars to sales promotion. There has been a steady increase in the use of sales promotion techniques to influence consumers' purchase behavior. The growing power of retailers, erosion of brand loyalty, increase in consumers' sensitivity to promotions, increase in new product introductions, fragmentation of the consumer market, short-term focus of marketing and brand managers, and increase in advertising clutter are some of the reasons for this increase.

Sales promotions can be characterized as either franchise building or nonfranchise building. The former contribute to the long-term development and reinforcement of brand identity and image; the latter are designed to accelerate the purchase process and generate immediate increases in sales.

Sales promotion techniques can be classified as either trade- or consumeroriented. A number of consumer-oriented sales promotion techniques were examined in this chapter, including sampling, couponing, premiums, contests and sweepstakes, rebates and refunds, bonus packs, price-off deals, loyalty programs, and event marketing. The characteristics of these promotional tools were examined, along with their advantages and limitations. Various trade-oriented promotions were also examined, including trade contests and incentives, trade allowances, displays and point-of-purchase materials, sales training programs, trade shows, and cooperative advertising.

Advertising and sales promotion should be viewed not as separate activities but rather as complementary tools. When planned and executed properly, advertising and sales promotion can produce a synergistic effect that is greater than the response generated from either promotional mix element alone. To accomplish this, marketers must coordinate budgets, advertising and promotional themes, media scheduling and timing, and target audiences.

Sales promotion abuse can result when marketers become too dependent on the use of sales promotion techniques and sacrifice long-term brand position and image for short-term sales increases. Many industries experience sales promotion traps when a number of competitors use promotions extensively and it becomes difficult for any single firm to cut back on promotion without risking a loss in sales. Overuse of sales promotion tools can lower profit margins and threaten the image and even the viability of a brand.