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• Widening use • Increasing loyalty• Reward loyal customers• Extending usage• Creating awareness and interest• Gaining intermediary support• Deflecting attention from price• Emphasizing price• Discriminating among users• Supporting database enhancement

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.

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

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

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

Sampling

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

Couponing: Certificates offering a stated saving on the purchase of a specific product.

– Media delivery in newspapers and magazines and as freestanding 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

• 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

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

• 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 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.

Sales Promotion 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 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

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

• Has short term impact• Can be abused• Can lead to promotional

wars• Often does not

contribute to brand image

Advantages Disadvantages

INDIVIDUAL ASSIGNMENTFind specific examples of three types of sales promotion in

the current market:

• Consumer sales promotions

• Trade sales promotions

• Employee/Salesforce sales promotions

Find one examples from each category by contacting retailers, disributors, wholesalers, brokers, agents, sales staff and employees of the companies and explain the techniques that they use in order to stimulate short term behavioral responses from consumers, the trade (reseller support), or the company’s own sales force.

Your assignment is to take pictures of different and diverse promotions in every category and to write a report in order to explain the promotional tecniques, used by different companies. Any example from the Internet is not accepted.

Deadline: 30 December 2014