Sales promotionSales promotion

Activity that provides special incentives to encourage immediate response from customers, distributors, and an organization’s sales force.”

Sales Promotion consists of short-term incentives to encourage the

purchase or sales of a product.

Activity that provides special incentives to encourage

immediate response from customers, distributors, and an

organization’s sales force.” Sales Promotion consists of short-term incentives to encourage the

purchase or sales of a product

Advertising offer reason to buy, sales promotion offers an incentives to Advertising offer reason to buy, sales promotion offers an incentives to buybuy

. . Sales promotionSales promotion consists of all marketing activities that attempt to consists of all marketing activities that attempt to stimulate quick buyer action, or, in other words, attempt to promote stimulate quick buyer action, or, in other words, attempt to promote immediate sales of a product (thereby yielding the name sales immediate sales of a product (thereby yielding the name sales promotion).promotion).

ConsumerSales

Promotion

Trade Sales

Promotion

Consumer market

Marketing channel

Goal = Drive immediate purchase= Influence Behavior

Purpose of sales promotionPurpose of sales promotion Attract new triesAttract new tries To reward loyal customerTo reward loyal customer Increase purchase rate of occasional userIncrease purchase rate of occasional user Attracts brand switcherAttracts brand switcher Marketing of high brand Marketing of high brand Building long term relationship with customerBuilding long term relationship with customer

Major decision in sales promotionMajor decision in sales promotion Establish objectivesEstablish objectives Select the toolsSelect the tools

Establishing ObjectivesEstablishing ObjectivesType of BuyerType of Buyer

Loyal Customers

Competitor’sCustomers

Brand Switchers

Price Buyers

Desired ResultsDesired Results

• Reinforce behavior• Increase consumption• Change timing

• Break loyalty• Persuade to switch

• Persuade to buy your brand more often

• Appeal with low prices

• Supply added value

Sales PromotionSales PromotionExamples Examples

• Loyalty marketing• Bonus packs

• Sampling• Sweepstakes, contests, premiums

• Price-lowering promotion

• Trade deals• Coupons, price-offpackages, refunds

• Trade deals

Objectives for final buyers:Objectives for final buyers: There are four basic buyer action that can be There are four basic buyer action that can be

stimulated by S.Pstimulated by S.P InquiresInquires:when new model or version of a product :when new model or version of a product

or service are being offered.SP may designed to or service are being offered.SP may designed to stimulate inquires.stimulate inquires.

It can be include returning a form, requesting It can be include returning a form, requesting additional information about a product or service.additional information about a product or service.

Managers can generate inquire by offering:Managers can generate inquire by offering: Free catalogsFree catalogs Mail in coupons for informationMail in coupons for information

Encourage re purchasingEncourage re purchasing:another objectives is :another objectives is repurchasing.to the extent that habit building will lead to repurchasing.to the extent that habit building will lead to brand loyalty.brand loyalty.

Managers can generate repurchasing by,Managers can generate repurchasing by, On pack couponsOn pack coupons Mail in coupons for rebateMail in coupons for rebateProduct trial Product trial A product trial objectives is certainly A product trial objectives is certainly

appropriate in marketing new product.firms which market appropriate in marketing new product.firms which market a number of different products (such as franchise a number of different products (such as franchise extension) may be use this techniques.extension) may be use this techniques.

It can be done for,It can be done for,New productNew productRelated productRelated productBrand switcher----by,Brand switcher----by,

CouponsCoupons Free samplesFree samples Contest Contest DemonstrationDemonstration Traffic buildingTraffic building: it can be use as a vehical for : it can be use as a vehical for

stimulating more store traffic from new buyers as stimulating more store traffic from new buyers as well as for the repurchase. well as for the repurchase.

Special attraction in malls may attract customers Special attraction in malls may attract customers who will then make some purchases. It can also be who will then make some purchases. It can also be done by, done by,

Special salesSpecial sales Weekly salesWeekly sales Entertainment events.Entertainment events.

Trade promotion objectivesTrade promotion objectives It can also says channel member objectives.the It can also says channel member objectives.the

fundamental purpose of trade promotion is to push fundamental purpose of trade promotion is to push the product through marketing channel by getting the product through marketing channel by getting reseller reseller (retailer, whole seller )to aggressive market the (retailer, whole seller )to aggressive market the product .product .

Encourage trade inventory buildingEncourage trade inventory building:: manufacture may offer special margin or extra manufacture may offer special margin or extra merchandise at no extra cost to include an increase merchandise at no extra cost to include an increase in retailer or whole seller inventories.in retailer or whole seller inventories.

Persuading retailers to carry new items and Persuading retailers to carry new items and high level of inventoryhigh level of inventory

Encourage off season buyingEncourage off season buying Building brand loyaltyBuilding brand loyalty Gaining entry into new retail outlets.Gaining entry into new retail outlets.

Selecting consumer-promotion Selecting consumer-promotion tooltool

Coupon

Rebate

Premium

A certificate that entitles consumers to an immediate

price reduction.

A cash refund given for the purchase of a product during

a specific product.

An extra item offered to the consumer, usually in exchange

for some proof of purchase.

Consumer sales promotions are steered toward the ultimate product users—typically individuals—especially shoppers in the local supermarket.

Sampling A promotional program that allows the consumer the opportunity to try a

product or service for free.

Contest

Sweepstakes

Promotions that require skill or ability to compete for prizes.

Promotions that depend on chance or luck, with

free participation.

A premiumA premium is tangible compensation, an is tangible compensation, an incentive, given for rendering a particular deed, incentive, given for rendering a particular deed, usually buying a product. The premium may be usually buying a product. The premium may be free, or, if not, the cost is well below the usual free, or, if not, the cost is well below the usual price. price.

On-shelf couponingOn-shelf couponing: Coupons are present at the : Coupons are present at the shelf where the product is available. shelf where the product is available.

Checkout dispensers: On checkout the customer Checkout dispensers: On checkout the customer is given a coupon based on products purchased. is given a coupon based on products purchased.

On-line couponingOn-line couponing: Coupons are available on : Coupons are available on line. Consumers print them out and take them to line. Consumers print them out and take them to the store. the store.

Point-of-sale displays: Point-of-sale displays: Aisle interrupter: A sign the juts into the aisle from Aisle interrupter: A sign the juts into the aisle from

the shelf. the shelf. Dangler: A sign that sways when a consumer walks Dangler: A sign that sways when a consumer walks

by it. by it. Dump bin: A bin full of products dumped inside. Dump bin: A bin full of products dumped inside. Glorifier: A small stage that elevates a product Glorifier: A small stage that elevates a product

above other products. above other products. . Lipstick Board: A board on which messages are . Lipstick Board: A board on which messages are

written in crayon. written in crayon. Necker: A coupon placed on the 'neck' of a bottle. Necker: A coupon placed on the 'neck' of a bottle.

Money RefundsMoney Refunds Offering consumers money when they mail in a proof Offering consumers money when they mail in a proof

of purchase, usually for multiple product purchasesof purchase, usually for multiple product purchases Cents-Off OffersCents-Off Offers

Promotions that let buyers pay less than the regular Promotions that let buyers pay less than the regular price to encourage purchaseprice to encourage purchase

Free SamplesFree Samples Samples of a product given out to encourage trial and Samples of a product given out to encourage trial and

purchasepurchase DemonstrationsDemonstrations

Manufacturers use them temporarily to encourage trial Manufacturers use them temporarily to encourage trial use and purchase of a product or to show how a product use and purchase of a product or to show how a product worksworks

Selecting Trade Promotion ToolsSelecting Trade Promotion Tools A trade sales promotion is pointed toward A trade sales promotion is pointed toward

resellers who distribute products to ultimate resellers who distribute products to ultimate consumers. The term "trade" traditionally consumers. The term "trade" traditionally refers to wholesalers and retailers who handle refers to wholesalers and retailers who handle or distribute marketers' products. Other terms or distribute marketers' products. Other terms for wholesalers and retailers include for wholesalers and retailers include "resellers" and "dealers.""resellers" and "dealers."

Tools for Trade Sales PromotionTools for Trade Sales PromotionTrade Allowances

Push Money

Discounts

Free goods

Store Demonstration

Conventions & Trade Shows

3

Trade AllowanceTrade AllowanceA price reduction offered by manufacturers to A price reduction offered by manufacturers to

intermediaries, such as wholesalers and retailers.intermediaries, such as wholesalers and retailers.

Push MoneyPush MoneyMoney offered to channel intermediaries to encourage Money offered to channel intermediaries to encourage

them to “push” products--that is, to encourage other them to “push” products--that is, to encourage other members of the channel to sell the products.members of the channel to sell the products.

Discounts: Discounts:

A straight reduction in the price on purcahse during A straight reduction in the price on purcahse during stated period of time.stated period of time.

Free goods:Free goods: Free goods are offer to middle man who buy certain Free goods are offer to middle man who buy certain

quantity.such as pen, pencil, calendarsquantity.such as pen, pencil, calendars Trade shows and convention:Trade shows and convention: Organization organize annual trade and conventions. Organization organize annual trade and conventions.

Firms selling product to the particular industry buy Firms selling product to the particular industry buy space set up booths and displays to demonstrate space set up booths and displays to demonstrate their product at the trade show.their product at the trade show.