Sales promotion

An acceleration tool

The growth of sales promotion

• the growing power of retailers• declining brand loyalty• increased promotional sensitivity• brand proliferation• fragmentation of the consumer market• short-term focus• increased desire for accountability• competition• clutter

Concerns about increased role of sales promotion

• effect on brand equity• encourages consumers to

purchase primarily on the basis of price

• the harm of nonfranchise-building promotions

• Consumer-oriented sales promotion– obtaining trial and repurchase– increasing consumption of an established brand– defending current customers– targeting a specific market segment– enhancing advertising and marketing efforts

• Trade promotions– increase stock levels– gain more or better shelf space– offer incentive to retailer to stock new product– even out fluctuating sales– counter the competition

Continued…

• Retailer promotions– increase store traffic (loss leaders)– increase frequency and amount of purchase– increase store loyalty– increase own-brand sales– even out busy periods

Consumer-oriented sales promotion techniques

• sampling• couponing• premiums• prize promotions• refunds and rebates• bonus packs

Objectives of trade-oriented sales promotion

• obtain distribution for new products• maintain trade support for

established brands• encourage retailers to display

established brands• build retail inventories

Types of trade promotions• contests and incentives• trade allowances

– promotional allowances– slotting allowances

• displays and POS materials• sales training programmes• trade shows• co-operative advertising

Requirements for success in sales promotion

• pre-testing, post-testing & tracking must be part of the evaluation process

• sales promotion should be distinctive, simple, easy to follow, easy to use

• planning is required to assess possible effects - not just on anticipated sales but on resource implications

• the appeal of sales promotion should be directed towards specific target audiences

• should result in a net contribution to the organisation