Transcript MRK317Chapter8

Chapter 8
Sales Promotion
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Sales Promotion
“Activity that provides special incentives to encourage
immediate response from customers, distributors, and an
organization’s sales force.”
Consumer
Promotion
Incentives to stimulate
purchase or loyalty.
Trade
Promotion
Incentives to encourage
purchase and merchandising
support by distributors.
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Push and Pull Strategies
Pull
Marketer
Wholesaler
Retailer
Consumer
Push
A combination of push and pull works best!
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Sales Promotion Planning
“Developing a plan of action for communicating
incentives to designated targets.”
Promotion plans are often devised by external
specialists who are briefed on the assignment.
• Market Profile
• Promotion Objectives
• Competitive Activity
• Budget
• Target Market Profile
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Sales Promotion Plans
Marketing Plan
Sales Promotion
Plan
Objectives
Strategies
Tactics
Fulfillment
Other IMC
Plans
Advertising
Strategy
Evaluation
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Sales Promotion Objectives
• Trial Purchase
Consumer
Promotion
• Repeat Purchases
• Brand Loyalty
• Listings
Trade
Promotion
• Sales Increases
• Merchandising Support
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Sales Promotion Strategy
Promotion strategy involves selecting the right combination
of consumer promotions and trade promotions to achieve the
marketing objectives.
Strategy = Consumer Promotion + Trade Promotion +
Advertising Strategy
Advertising is essential to create awareness and interest in
the sales promotion.
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Logistics and Fulfillment
1. Involves decisions about dates, deadlines, and
details.
2. A promotion must run seamlessly from the
front-end (announcing the promotion) to the
back-end (delivering prizes or merchandise to
recipients).
3. Fulfillment is often outsourced to a specialist.
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Measurement and Evaluation
Some typical yardsticks include:
• Sales increases in promotion period
• Trial and Loyalty (research may be necessary)
• Number of entries in a contest
• Redemption rates
• Financial Payout
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Consumer Promotion Execution
Coupons
• Media delivery
• Product delivery
• In-store delivery
A price-saving incentive
to trigger new or repeat
purchases.
• Cross-product delivery
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Consumer Promotion Execution
Free
Samples
• Regular size
• Trial size
• In-store taste samples
Free product to
encourage trial
purchase.
• On-site giveaway
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Consumer Promotion Execution
Contests
•Sweepstakes
•Games Contests
•Instant Wins
Repeat purchase and
loyalty-building incentives.
They require advertising
support to create interest.
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Consumer Promotion Execution
Cash
Rebates
• Single Purchase Offers
• Multiple Purchase Offers
• Slippage Occurs
$ returned to consumers
after purchase has been
made.
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Consumer Promotion Execution
Premium
Offer
• In-pack
• Mail-in
• With purchase
• Product bundling
An item given free or at a
discounted price with the
purchase of a good.
• Bonus packs
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Consumer Promotion Execution
Loyalty
Programs
• Points programs
• Loyalty cards
• $ rewards
Incentives that encourage
long-term loyalty; database
management initiatives.
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Trade Promotion
A distributor’s loyalty to any supplier’s products is
influenced by the quality and quantity of trade
promotion offers.
Distributors make money by buying and re-selling
goods. Inventory turnover is very important.
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Trade Promotion Execution
A variety of financial incentives are commonly offered
to distributors.
Trade
Allowance
Temporary price reduction to
stimulate larger purchases.
Performance
Allowance
An additional allowance to
encourage merchandising
support.
Cooperative
Advertising
An accumulating fund that
supports retail advertising.
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Trade Promotion Execution
Some trade promotion incentives are controversial.
Dealer
Premium
Spiff
An incentive offered a
distributor to encourage a
“special” purchase. Often
called “payola.”
Retail representatives are
offered incentives to “push”
a sponsors product line.
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Trade Promotion Execution
Some trade promotions support the personal selling
effort and in-store merchandising programs.
Collateral
Material
Material used by sales reps in
presentations (price lists,
catalogues, brochures, CDROMs, etc.).
Dealer Display
Material
Point-of-purchase display
material to encourage
purchase (shelf pads, posters,
displays, etc.).
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Planning the Promotion
Planning is crucial. Sales promotions are complimentary
activities that must be integrated with other marketing
and marketing communications programs.
1. How frequent should promotions be?
2. What effect will promotions have on brand image?
3. Will promotions enhance brand equity?
Tim Hortons RRRoll Up the Rim meets all of
these considerations positively.
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In Class Assignment
1.What forms of sales promotion are best
suited for the following brands – and
why?
Secret Deodorant
 Quaker Chewy Granola Bars
 New Balance Running Shoes
 Hewlett Packard laser printer
 Axe deodorant

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In class Assignment
2. Evaluate the sales promotion strategies
used by Tim Hortons. What marketing
objectives and marketing
communications objectives do they
meet? How does Tim Hortons integrate
sales promotion with other components
of the marketing communications mix?
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