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Sales Promotion. Sales promotion consist of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker and/or greater purchase.

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Presentation on theme: "Sales Promotion. Sales promotion consist of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker and/or greater purchase."— Presentation transcript:

1 Sales Promotion

2 Sales promotion consist of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker and/or greater purchase of particular products/ services by consumers or the trade.

3 Purpose of sales Promotion To stimulate Consumer trials To obtain shelf space in the retail stores Cementing a long term relationship with customer/ retailer To reward the loyal customers To increase the repurchase rate of occasional users

4 Major decisions in Sales Promotion Establishing the Sales Promotion Objectives Selecting the Sales Promotion tools Developing the Sales Promotion Program Pre-testing the Sales Promotion Program Implementing & Controlling the Sales Promotion Program Evaluating the Sales Promotion Results

5 Establishing the Sales Promotion Objectives Encouraging purchase of larger-size units Building trial among non users Attracting switchers away from competitors brands Persuading retailers to carry new items Persuading retailers to carry higher levels of inventory Encouraging off-season buying Encouraging stocking of related items Off-setting competitive promotions Building brand loyalty Gaining entry into new retail outlets To stimulate the sales force for off-season sales To encourage and motivate the sales force

6 Selecting the Sales Promotion Tools Consumer Promotion Tools Manufacturer promotions Retailer promotions

7 Major Consumer-Promotion Tools Samples Coupons Cash refund offers Premium (gifts) With pack/inside pack premium Reusable package/container Free in the mail premium Price Packs Reduced-price pack Banded pack

8 Major Consumer-Promotion Tools Prizes (contests, sweepstakes, games) Patronage awards Free trials Product warranties Tie-in promotions Gross-promotions Point of purchase displays and demonstrations

9 Major Trade Promotion Tools Trade promotion tools Price offs Allowance Free goods Contests

10 Major Business & Sales Force Promotion Tools Trade Shows Sales contest Specialty Advertising

11 Developing The Sales Promotion Program Deciding the incentive and its size Establishing the conditions for participation Deciding the duration of promotion Deciding the Distribution vehicle Deciding the Timing of the promotion Deciding the sales promotion budget Ground up method Percentage method

12 Pre testing the sales program Rating or ranking by consumers Trial tests

13 Implementing and Controlling the Sales Promotion Program Lead time Initial planning, design, approval of package modifications or material to be mailed or distributed. Preparation of advertising and point of sales materials, notification to sales personnel Establishment of allocations for individual distributors, purchasing and printing of special premiums or packaging materials Production of advanced inventories, distribution to the retailer sell in time Launch of Promotion to 95 % distribution of deal merchandise

14 Evaluating the Sales Promotion Results Sales Data 6%-10%-5%-7% Consumer Survey How many Recall the offer What they thought of it How many took advantage of it How it has affected subsequent brand choice behavior

15 Evaluating the Sales Promotion Results Experiments Vary the incentive value, duration, and distribution media


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