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Hogeschool van Amsterdam Interactieve Media
Effective sales promotion
Hoorcollege marketing communication blok 4 week 5
Hogeschool van Amsterdam Interactieve Media
Learning goals
By the end of the college and you should: Be in a position to define sales promotion Be aware of the factors that have led to a growth in sales
promotion as a tool Understand what above the line and below the line
communications are Understand how sales promotion can be integrated into a
communications campaign Be aware of the traditional and interactive media tools
available to develop sales promotions Be able to use the appropriate tools to develop a sales
promotion for a campaign (such as the eBay campaign)
Hogeschool van Amsterdam Interactieve Media
Agenda
What is sales promotion?
Stages in developing a sales promotion
Objectives of sales promotion
Different targets for sales promotion activities
Tools of sales promotion
Interactive media and sales promotion
Hogeschool van Amsterdam Interactieve Media
What is sales promotion?
Sales promotions are short-term incentives (above the basic product benefits) aimed at encouraging purchase or sales
Source: Kotler, P., (2005) Principles of Marketing 4th European Edition, Harlow: Pearson Education Ltd, p. 785
There are issues with this definition Over emphasizes “incentives”
Sales promotions also include product literature, merchandising, point of sale (POS) materials
It is not clear who these incentives are aimed at?
Hogeschool van Amsterdam Interactieve Media
Definition of sales promotion
All below the line communication activities designed to encourage
Sales staff to push
and/or Intermediaries to purchase
and/or End customers to purchase
a product or service by affecting their perceived value of the product in a positive manner
Hogeschool van Amsterdam Interactieve Media
Below the line?
Hogeschool van Amsterdam Interactieve Media
The growth of sales promotion
Ratio of advertising to sales promotion spend
60%
30%
40%
70%
1991
1997
Advertising Sales promotion
Estimates from Pickton, D. & Broderick, A. (2005). Integrated Marketing Communications 2nd edition, Harlow: Pearson Education Ltd, p. 636
Hogeschool van Amsterdam Interactieve Media
Reasons for growth
*Advertising when combined with sales promotion has 2 to 7 times the sales effect as advertising alone Source: Roberts, A. (1996), ‘What do we know about advertisings short-term effects?’, Admap, February, pp. 42-45
Hogeschool van Amsterdam Interactieve Media
Stages in developing a sales promotion
Hogeschool van Amsterdam Interactieve Media
Targets of sales promotion
Hogeschool van Amsterdam Interactieve Media
Sales promotion objectives
Hogeschool van Amsterdam Interactieve Media
End customer sales promotion objectives
Hogeschool van Amsterdam Interactieve Media
Intermediary sales promotion objectives
Hogeschool van Amsterdam Interactieve Media
Sales force promotion objectives
Hogeschool van Amsterdam Interactieve Media
Tools of sales promotion
Hogeschool van Amsterdam Interactieve Media
Customer sales promotion tools
Samples
Coupons
Cash-refunds / rebates (aka cash-back)
Price packs
Bulk discount / 12 halen, 11 betalen (BOGOF)
Premium items
Give aways
User gets user rewards
Usage rewards
Point of Purchase / Sale (POP / POS) actions & materials
Competitions / lotteries etc.
Brochures
Hogeschool van Amsterdam Interactieve Media
Intermediary sales promotion tools
Discounts
Allowances Reductions for damaged / old goods Advertising costs Free goods for bulk purchases
Push incentives Sales force incentives Advertising support Support for retail environment
Support POS materials / brochures Preference on new product launches Invoicing and logistics Service support Accredited dealer status
Hogeschool van Amsterdam Interactieve Media
Sales force sales promotion tools
Bonus
Prizes
Promotions
POS materials / brochures
Creativity is key here
Hogeschool van Amsterdam Interactieve Media
Interactive media and sales promotion
Interactive media is an interesting new channel for sales promotion Customer focused
Coupons Virtual trial Competitions Product information Cash back administration
Intermediary focused Product information Virtual trial Joint promotion activites
Hogeschool van Amsterdam Interactieve Media
Fulfilment is the key to a successful sales promotion
A sales promotion that is not thought through is very risky Can cost more than it brings in Can leave unhappy customers / dealers / sales people
When developing a sales promotion you must always think how it be fulfilled
Hogeschool van Amsterdam Interactieve Media
Summary
There is more to sales promotion than just give-aways
Sales promotion is strong at converting desire into action
A successful sales promotion must be thought through Fulfilment is key