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

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Acts as a marketing communication tool

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Offers sales-related incentives

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Generates response or action

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Produces measurable results

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Changes the accepted price-value relationship

Sales Promotion

STRENGTHS

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Gives an extra incentive to act

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Changes the price/value relationship

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Gives sense of immediacy to purchase

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Adds excitement

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Stimulates trial

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Stimulates continuity of purchase or support, repeat purchases

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Increases purchase frequency and or quantity

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Promotes reminder merchandise

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Motivates trade support

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Builds databases WEAKNESSES

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Adds clutter

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Can set false retail price

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Some consumers won’t buy unless offered a price deal

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Leads to forward buying by trade members

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Fraudulent redemption of coupons and theft of premiums

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Can be difficult to get trade cooperation

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Can undercut brand images, create brand insensitivity

Sales Promotion Compared to Other Promotion Mix Tools

Sales Promotion Ad vertising Public Relations Direct Response (Interactive) Personal Selling Time Frame Primary Appeal short term both long term long term emotional emotional short term rational both rational Primary Objective sales Contribution to Profitability high image/ brand position moderate goodwill low sales high sales relation ships high

Push and Pull Strategies

PUSH:

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Directs Marketing to Resellers PULL:

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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.

10.9

Goals of proactive, long range objectives

 Create additional revenue or market share    Enlarge target market Create positive experience Enhance product value and brand equity

Goals of reactive (normally negative or short-term situation

  Match competition Move inventory   Generate cash Perhaps go out of business

10.4

Sales Promotion Mix

 Which to use  How to combine  How to deliver  Separate or overlay

Sales Promotion Objectives

CONSUMER TRADE

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Prompt trial by new users

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Introduce products to new distribution areas

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Introduce new or improved products

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Stimulate repeated product use

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Reduce selling costs

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Encourage more frequent purchase or multiple purchases

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Improve working habits

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Offset competitive promotions

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Keep customers by providing an implied reward

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Increase sales volume

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Control inventory

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Reinforce advertising or personal selling

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Stimulate in-store support

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Stimulate trade support

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Create a high level of excitement among those responsible for product sale

10.12

10.10

Trade Sales Promotion -- Resellers

 Dealer Contests  Trade Coupons  Dealer Loaders  buying loaders  display loader  Trade Deals  Buying allowances – slotting allowance – free goods allowance  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

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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

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Samples Continuity Programs

 Frequent flyer programs 

Specialties, event sponsorship, licensing