Transcript Sales Promotion The Integrated Marketing Communications

BA230-Marketing Communication
Sales
Promotion
The Integrated Marketing
Communications (IMC) Mix
Advertising
Public
Relations
Integrated
Marketing
Sales Communications
Personal
Promotion
Mix
Selling
Direct
Marketing
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.
Sales Promotion
Advertising
Reasons to buy...
Sales Promotion
Incentives to buy...
Objectives of Sales Promotion
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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 intrest
Gaining intermediary support
Deflecting attention from price
Emphasising 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.
Sales Promotion Activities
1. Consumer sales promotions
2. Trade sales promotions
3. Employee/Salesforce sales
promotions.
Consumer focused sales
promotions activities
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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
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
Sampling
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 frestanding 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:
Consumer focused sales
promotions activities
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
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
Tie-in promotions: Two or more
brands or companies team up
McDonald’s and Disney
McDonald’s and Toys’R’us
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 focused sales promotions
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 activities
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Trade allowances:
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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
Trade focused sales
promotions activities
• P.O.P materials and merchandising:
Trade focused sales
promotions activities
• P.O.P
materials
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
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.
Business and Sales force Sales
Promotion activities
• Trade Shows and Conventions
• Sales contests
• Specialty advertising (calender, deskoffice accessories etc.)
Push versus Pull strategies
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Push strategy: Heavy promotion to channel
members, pushes product through the
system.
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Pull strategy: Heavy promotion to end users
pulls product through the system.
Mechanics
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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?
Characteristics of successful
sales promotions
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Attractiveness
Fit to product category
Reception delay
Value.
Sales Promotion
Advantages
• Provides extra incentive
to purchase product
• Way to appeal to price
sensitive consumer
• Can generate extra
interest in ads
• Easier to measure efforts
Disadvantages
• Often only has short
term impact
• Often abused
• Can lead to promotional
wars
• Often does not
contribute to brand
image
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
• Media: less effective (network TV)
• The increasing problem of advertising clutter and the need
to use consumer promotions as a way of atrracting
attention and interest to advertising
Steps in Sales Promotion
Program Development
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Establish objectives
Select consumer-promotion tools
Select trade-promotion tools
Select business- and 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