BA230-Marketing Communication

Sales

Promotion

Sales Promotion

Sales promotions are marketing communications activities that stimulate short term behavioral responses from consumers, the trade (reseller support), or the company’s own sales force in order to encourage the trade and/or end customer to purchase or to take other relevant action by affecting the perceived value of the product being promoted.

Sales promotions are short-term incentives designed to stimulate purchase among consumers or trade.

Advertising

Reasons to buy...

Sales Promotion

Sales Promotion

Incentives to buy...

Objectives of Sales Promotion

• Increasing volume

• Encouraging trial

• Increase repeat purchase

• Increasing frequency and amount of use

• Increasing loyalty

• Reward loyal customers

• Extending usage

• Creating awareness and interest

• Gaining intermediary support

• Deflecting attention from price

• Emphasising price

• Supporting database enhancement

Push versus Pull strategies

• Push strategy: Heavy promotion to channel

members, pushes product through the

system.

• Pull strategy: Heavy promotion to end users

pulls product through the system.

Characteristics of successful

sales promotions

• Attractiveness

• Fit to product category

• Reception delay

• Value

Sales Promotion

• Provides extra incentive to

purchase product

• Way to appeal to price

sensitive consumer

• Can generate extra interest

in ads

• Easier to measure efforts

• Often only has short term

impact

• Often abused

• Can lead to promotional

wars

• Often does not contribute

to brand image

Advantages Disadvantages

Reasons for Rapid Growth of Sales

Promotion

• Growing power of retailers

• Declining more brand loyalty

• Increasing promotional sensitivity

• Brand proliferation/similarity

• Price sensitivity,

• Fragmentation of consumer market

• The short term focus of many marketing plans and reward systems

• Use of sales promotion to gain or maintain a competitive advantage

• Media: less effective

• The increasing problem of advertising clutter and the need to use consumer promotions as a way of attracting attention and interest to advertising

Mechanics

• Does the mechanic involve a task that is too

much trouble?

• Will the mechanics be embarrassing or

personally intrusive?

• Will the customer understand all the rules?

• Should the mechanics be immediate or delayed?

• Is the mechanics restricted by law?

• Does the offer look too good to be true?

Steps in Sales Promotion

Program Development

• Establish objectives • Select consumer-promotion tools • Select trade-promotion tools

• Select business- and sales force promotion tools

• Develop the program – Decide on the Size of the Incentive – Set Conditions for Participation

– Determine How to Promote and Distribute the Promotion Program

– Determine the Length of the Program

• Pretest the program • Implement and evaluate the program

Concepts mixed with sales prom.

• Merchandising: Range

of sales promotions

activities intended to

ensure that products are

easily available;

prominently and

attractively displayed at

point of sale.

• Point of Purchase (Sale)-P.O.P:

Marcom activities that take place where

products are bought and sold.

Sales Promotion Activities

1. Consumer sales promotions

2. Trade sales promotions

3. Employee/Salesforce sales promotions.

Consumer focused sales

promotions activities

• Samples

• Coupons

• Premiums

• Money-off

• Bonus Packs

• Banded Packs

• Prize promotions

• Tie-in promotions

• Cause-related sales promotions

• Merchandising/P.O.P displays/demonstrations

• Information leaflets/packs and catalogues

• “Loyalty” schemes

• Free trials

Consumer focused sales

promotions activities

Sampling: Offer of a free trial amount (size) of a product or service.

– Door-to-door sampling

– Sampling through the mail

– In-store sampling

– On-package

– Inserts in magazines and newspapers

Consumer focused sales

promotions activities

Free trials: Inviting prospects to try the

product free in the hope that they will buy

the product.

Consumer focused sales

promotions activities

Free trials

Consumer focused sales

promotions activities

Sampling

Consumer focused sales

promotions activities

Couponing: Certificates offering a stated

saving on the purchase of a specific

product.

– Media delivery in newspapers and

magazines and as frestanding inserts

– through direct mail

– In-stores and at points of purchase

– In or on packages

Couponing:

Consumer focused sales

promotions activities

Premiums: Include free goods and services such as extra item of the product being purchased, a free item of some other product or service such as entry into a leisure park.

– Two for one

– “buy one get one free” etc.

Consumer focused sales

promotions activities

Merchandising/P.O.P

displays/demonstrations:

Displays and

demonstrations that take

place at the point of

purchase or sale

Consumer focused sales

promotions activities

• Information

leaflets/packs and

catalogues

Consumer focused sales

promotions activities

Prize promotions: Prizes offer consumer to

chance, to win cash, trips or mechandise as a

result of purchasing something.

A contest calls for consumer to submit an entry

to be examined by judges who will select the

best entries.

A sweepstakes asks consumer to submit their

names for a drawing.

A game presents consumer with sth. Everytime

they buy- bingo numbers, missing letters- that

might help them win a prize.

Consumer focused sales

promotions activities

Consumer focused sales

promotions activities

Consumer focused sales

promotions activities

• Prize promotions:

Money-off:

• On pack, immediate price reduction

• Money-off voucher, immediate price reduction

• Money-off voucher for next purchase

• Money-off voucher for other products

• Computer-generated immediate price reduction

• Computer-generated vouchers

Consumer focused sales

promotions activities

Consumer focused sales

promotions activities

Bonus Packs: Include an extra quantity

of the product in the pack for no extra

price increase.

Banded Packs: Multi-packs of the same

product, or more than one product

“banded” together for an inclusive

price.

Bonus Packs

Banded Packs

Consumer focused sales

promotions activities

McDonald’s and Disney

McDonald’s and Toys’R’us

Tie-in promotions: Two or more

brands or companies team up

Consumer focused sales

promotions activities

“Loyalty” schemes: It aims to encourage

customers to purchase more item from, or

make more use of, the organization of which

they are “members”.

Trade promotions are the expenditures or incentives used by manufecturers and other members of marketing channel to help push products through to retailers.

They are aimed at retailers, disributors, wholesalers, brokers, and agents.

Trade focused sales promotions

Trade focused sales

promotions activities

• Trade allowances: – Discount/price reductions

– Additional free products

– Special terms

– Target pay-backs

• Trade contests and incentives:

• Cooperative advertising (and vendor support programs)

• P.O.P materials and merchandising

• Gifts and free merchandise

• Information leaflets/packs and catalogues

• Training programs, trade shows

Trade focused sales

promotions activities

• P.O.P materials and merchandising:

• P.O.P

materials

Trade focused sales

promotions activities

Business and Sales force Sales

Promotion activities

• Trade Shows and Conventions

• Sales contests

• Specialty advertising (calender, desk-office accessories etc.)

Objectives of Trade Promotions

• Obtain initial distribution

• Obtain prime retail shelf space or location

• Support established brands

• Counter competitive actions

• Increase order size

• Build retail inventories

• Reduce excess manufacturer inventories

• Enhance channel relationships

• Enhance the IMC program

Objectives of Sales force

(Employee) Promotion

• Stimulate sales force motivation for new, improved or existing products

• Provide extra “assistance” for sales staff e.g. Create extra sales promotion materials for their use

• Encourage meeting of sales targets

• Help in the management of customer debt, e.g. Reduction of overdue debts

• Encourage sales staff to generate leads

• Improve the quality of leads/qualified leads

• Encourage non-sales staff to generate leads

• Encourage all staff to improve customer contact and relations

• Complement other marketing communications “push” activities.