Transcript No Slide Title

Sales Promotion
Chapters 18, 19
Sales Promotion

Marketing communication tool that offers
sales-related incentives to generate a
specific, measurable action or response
for a product or service.
Sales Promotion
• Acts as a marketing communication tool
• Offers sales-related incentives
• Generates response or action
• Produces measurable results
• Changes the accepted price-value relationship
Sales Promotion
STRENGTHS
WEAKNESSES
• Gives an extra incentive to act
• Adds clutter
• Changes the price/value relationship
• Can set false retail price
• Gives sense of immediacy to purchase
• Some consumers won’t buy
unless offered a price deal
• Adds excitement
• Stimulates trial
• Stimulates continuity of purchase or
support, repeat purchases
• Increases purchase frequency and or
quantity
• Promotes reminder merchandise
• Motivates trade support
• Builds databases
• Leads to forward buying by trade
members
• Fraudulent redemption of
coupons and theft of premiums
• Can be difficult to get trade
cooperation
• Can undercut brand images,
create brand insensitivity
Sales Promotion Compared to Other
Promotion Mix Tools
Sales
Promotion
Advertising
Direct
Public
Response Personal
Relations (Interactive) Selling
Time
Frame
short
term
long
term
long
term
short
term
both
Primary
Appeal
both
emotional
emotional
rational
rational
Primary
Objective
sales
image/
brand
position
goodwill
sales
sales
relationships
Contribution
to Profitability
high
moderate
low
high
high
Push and Pull Strategies
PUSH:
PULL:
• Directs Marketing to
Resellers
• Directs Marketing
to End-Users
Manufacturer
PUSH
Wholesaler
PULL
PUSH
Retailer
PUSH
Consumer
Contributions to marketing communication
strategy -- 1) Introducing new product
Reduced price
 In-store sampling
 Special tie-in
 Coupons
 Mail samples
 Offer reduced prices in stores
 Contests

Introducing new product

Trade Promotions
 Trade
advertising
 Trade sales promotion techniques
– Price discounts
– Point-of-purchase (PoP) displays
– Advertising allowances
 Repeat
purchase promotions
– Coupons
– Rebates
– Other rewards
Contribution -- Brand Building

Techniques to enhance brand image
 Tie-ins

(FOR EXAMPLE)
Must be part of a strategy to build brand
trial and familiarity
Sales promotion strategy -- Stimulate consumer to
act, motivate sales force, gain cooperation of
resellers.
Goals of proactive, longrange objectives
 Create additional
revenue or market
share
 Enlarge target market
 Create positive
experience
 Enhance product value
and brand equity
10.9
Goals of reactive
(normally negative or
short-term situation
 Match competition
 Move inventory
 Generate cash
 Perhaps go out of
business
Sales Promotion Mix
Which to use
 How to combine
 How to deliver

 Separate
10.4
or overlay
Sales Promotion Objectives
CONSUMER
TRADE
• Prompt trial by new users
• Introduce products to new
• Introduce new or improved products
distribution areas
• Stimulate repeated product use
• Encourage more frequent purchase or
multiple purchases
• Keep customers by providing an
implied reward
• Reinforce advertising or personal
selling
• Stimulate trade support
10.12
• Reduce selling costs
• Improve working habits
• Offset competitive promotions
• Increase sales volume
• Control inventory
• Stimulate in-store support
• Create a high level of excitement
among those responsible for
product sale
Trade Sales Promotion -- Resellers



Dealer Contests
Trade Coupons
Dealer Loaders


buying loaders
display loader

Trade Deals

– slotting allowance
– free goods allowance


10.10
Buying allowances
Advertising and
cooperative
advertising
allowances
Display allowances
Trade Sales Promotion -- Sales Force

Supportive programs
 Sales
meetings
 Sales kits

Motivational programs
 contests
 honors
clubs
 push money
10.11
Consumer Sales Promotion
Techniques
• Price Deals
•Discounts
•Cents-off
•Price-pack deals
•Bonus packs
•Banded pack
• Coupons
• Refunds and Rebates
Consumer Promotions
• Contests, Sweepstakes, Games
• Premiums
 Direct
premiums
– Store premiums
– In-packs
– On-packs
– Container premiums
 Mail
premiums
 Self-liquidator
 Continuity-coupon plan
 Free-in-the-mail premium
Consumer Promotions
• Samples
• Continuity Programs
 Frequent

flyer programs
Specialties, event sponsorship,
licensing