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Promotion
4p’s of marketing mix
Product Price Place Promotion
promotion
Promotion is the coordination of all seller initiated efforts to set up channels of information & persuasion in order to sell goods & services or promote an idea
promotion tools/ Promotion Mix
Advertising
Sales promotion Public relations/Publicity Personal selling Direct marketing
Sales Promotion - Definition
Sales promotion has been defined as “ a direct inducement that offer an extra value or incentive for the product to the sales force, distributors, or the ultimate consumer with the primary objective of creating an immediate sale.”
The oldest & most widely used SP tool is the Cents-off coupon.
Coupon have been around 1895 P& G began using coupons in 1920 McDonald launched its happy meals in 1979
Sales Promotion
Sales promotion utilizes a variety of incentive tools for a predetermined,
limited period of time in order to stimulate trial, increase consumer or
trade demand, and motivate and reward sales force, such as samples,
coupons, discounts, premiums, refunds and rebates, contest and
sweepstakes, trade deals, and sales contests for sales people etc.
In most cases, the objectives are generally short-
term sales related rather than long-term brand
building.
The Scope & Role
1) involves some type of inducement that provides an extra incentive to buy
2) is an essentially an acceleration tool design to speed up the selling process that maximize sales volume
3) targeted to different parties in the marketing channels
can be broken into two major categories
Sales promotion Short term incentives to encourage the
purchase or sale of product or service. Discounts Coupons Displays Demonstrations
Two major Types- 1) Consumer-oriented – targeted to the
ultimate user of a product /service 2) Trade-oriented - targeted towards
marketing intermediaries
3) Targeted towards sales executives
Consumer-oriented promotions Short term incentives Sample coupons Premiums contests/sweepstakes refunds/rebates bonus pack price-offs loyalty programs Event marketing
Obtaining trial & repurchase
Increasing consumption of an established brand
Defending current customers
Targeting a specific mkt segment
Enhancing integrated mkting communication & building brand equity
Objectives of Consumer oriented Sales Promotion
Trade-oriented promotion
Short term incentives contests & dealer incentives trade allowances POP displays training programs Trade shows Cooperative advertising
Obtain distribution for new products – encourage retailers
to give shelf space to new pdts
Maintain trade support for established brands
Encourage retailers to display established brands –
promotional display are an excellent way to generate sales
Build retail inventories –
wholesalers & retailers are more likely to push the product when they have high inventory level rather than storing it in their wherehouses
- they will not run out of stock & thus miss sales opportunities
- enables manufacturer to smooth out seasonal fluctuations
Objectives of Trade oriented Sales Promotion
Reasons for Sales Promotion Growth
The role of sales promotion has increased dramatically within the last 15 years.
Intense Competition
Brand Proliferation
Declining Brand Loyalty
Growing Power of Resellers
Advertising has Become Less Effective
Increased promotion sensitivity
Fragmentation of consumer market
Short term focus
Reasons for Sales Promotion Growth
increased accountability
Competition
Clutter
Some of the important objectives of sales promotion include:
Increase sales volume
Attract new customers
Launch new product and increase trial
Encourage repeat purchase
Clearance of excessive inventories
Motivate dealers to stock and sell more
To gain advantageous shelf-space
To increase store traffic
To block competitors’ moves
Motivate sales force
Sales Promotion Objectives
Coupons
Clip and bring to the store to exchange
Induce loyalty Repeat purchase Keeps the consumers
“locked”
Bonus Packs
Like bundle pricing but this is temporary
Adds value
Refund / Rebate Promotion
If the product does not perform, then its money back
Or consume X number of products and get Y FREE
Increases consumer confidence
Loyalty program
Sweepstakes
Chance game where the consumer has the chance to win something big through purchases
The more purchases, the more tickets
Creates loyalty
Sampling
Used when the consumer is unaware of the brand or product
Product buying is prone to retail channel based trial
Use when the product can be broken down into smaller dimensions
Price off promotion
Use for slow moving items
Excess inventory Off season Dislodge
competitors
Trade-oriented promotion
Short term incentives contests & dealer incentives trade allowances POP displays training programs Trade shows Cooperative advertising
Sales Promotion Tools
Manufacturer announced consumer promotions constitute “pull” strategy and retailer promotions are based on “push” strategy.
Sales promotions are more effective when combined with advertising and “pull-push” strategies are used at the same time.
Promotional Mix Strategies
Push versus Pull and More
Influences
Push Strategy calls for using the sales force and trade promotion.
The producer promote the product to channel members to induce them to carry the pdt & to promote it to final consumer
Influences
Pull Strategy
calls for spending on advertising and sales promotion to
build consumer demand.
If the pull strategy is effective consumer then demand the pdt from channel members who will in tern demand the product from producer
Push Strategy:
Persuade wholesalers and retailers to carry brands. Give a brand shelf space. Promote a brand in coop advertising.
Producer Wholesaler Retailer Customer
Push Tools:
Deals- Allowances, Price-offs and Discounts Displays and Point of Purchase Dealer Premiums Samples and Free Goods Buy-Back Guarantees Cooperative Advertising Advertising Material Dealer Meetings and Contests Specialty Advertising Items
Promotion techniques usedPromotion techniques used
run ads in trade magazines to make wholesalers run ads in trade magazines to make wholesalers aware of the productaware of the product
provide incentives to retailers to carry the item “… provide incentives to retailers to carry the item “… free case of cold drinks with each 2 cases it buys…” free case of cold drinks with each 2 cases it buys…”
run contests for salespeople to win prizes for selling run contests for salespeople to win prizes for selling the productthe product
Pull Strategy:
Entice customers to try a new product. Attract customers from competitive products. Hold and reward loyal customers.
Producer Wholesaler Retailer Customer
Pull Tools:
Sampling---in-store, events, newspaper, in-pack Cents Off Promotions and Coupons (-2%) Continuity/Frequency and Loyalty Programs Premiums Point of Purchase Displays Contests, Games and Sweepstakes Rebates and Cash refunds FSI’s (Free-Standing Inserts) Advertising Specialty Items
Promotion techniques usedPromotion techniques used
run TV commercials so customers directly learn about the product - run TV commercials so customers directly learn about the product - then they go to the store and ask for it, or call around to find out then they go to the store and ask for it, or call around to find out where it is soldwhere it is sold
give free samples to potential customersgive free samples to potential customers
Cooperative Advertising
A system by which Ad costs are divided between two or more parties usually such programs offered by manufacturer to their wholesalers or retailers as a mean of encouraging those parties to advertise the pdt.
Manufacturer will reimburse the retailers in part or full of ad expenditure
Ad with store name Advertise at a local rate Usually cheaper than the national rate can buy more
time & space for less money Powerful tool for small business owners that cuts ad
costs
Public relations