2 Sales PromotionSales 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.
3 Sales Promotion Advertising Sales Promotion Reasons to buy... Incentives to buy...
4 Objectives of Sales Promotion Increasing volumeEncouraging trialIncrease repeat purchaseIncreasing frequency and amount of useWidening useIncreasing loyaltyReward loyal customersExtending usageCreating awareness and interestGaining intermediary supportDeflecting attention from priceEmphasizing priceDiscriminating among usersSupporting database enhancement
5 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.
6 Reasons for Rapid Growth of Sales Promotion Growing power of retailersDeclining more brand loyaltyIncreasing promotional sensitivityBrand proliferation/similarityPrice sensitivityFragmentation of consumer marketThe short term focus of many marketing plans and reward systemsUse of sales promotion to gain or maintain a competitive advantageThe increasing problem of advertising clutter and the need to use consumer promotions as a way of atrracting attention and interest to advertising
9 Consumer focused sales promotions activities Sampling: Offer of a free trial amount (size) of a product or service.Door-to-door samplingSampling through the mailIn-store samplingOn-packageInserts in magazines and newspapers
13 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 freestanding insertsthrough direct mailIn-stores and at points of purchaseIn or on packages
15 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.
17 Consumer focused sales promotions activities Merchandising/P.O.P displays/demonstrations: Displays and demonstrations that take place at the point of purchase or sale
18 Consumer focused sales promotions activities Information leaflets/packs and catalogues
19 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.
21 Consumer focused sales promotions activities Money-off:On pack, immediate price reductionMoney-off voucher, immediate price reductionMoney-off voucher for next purchaseMoney-off voucher for other productsComputer-generated immediate price reductionComputer-generated vouchers
22 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.
25 Consumer focused sales promotions activities Tie-in promotions: Two or more brands or companies team upMcDonald’s and DisneyMcDonald’s and Toys’R’us
26 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”.
27 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.
28 Trade focused sales promotions activities Trade allowances:Discount/price reductionsAdditional free productsSpecial termsTarget pay-backsTrade contests and incentives:Cooperative advertising (and vendor support programs)P.O.P materials and merchandisingGifts and free merchandiseInformation leaflets/packs and cataloguesTraining programs, trade shows
29 Objectives of Trade Promotions Obtain initial distributionObtain prime retail shelf space or locationSupport established brandsCounter competitive actionsIncrease order sizeBuild retail inventoriesReduce excess manufacturer inventoriesEnhance channel relationshipsEnhance the IMC program
31 Business and Sales force Sales Promotion activities Trade Shows and ConventionsSales contestsSpecialty advertising (calender, desk-office accessories etc.)
32 Objectives of Sales force (Employee) Promotion Stimulate sales force motivation for new, improved or existing productsProvide extra “assistance” for sales staff e.g. Create extra sales promotion materials for their useEncourage meeting of sales targetsHelp in the management of customer debt, e.g. Reduction of overdue debtsEncourage sales staff to generate leadsImprove the quality of leads/qualified leadsEncourage non-sales staff to generate leadsEncourage all staff to improve customer contact and relationsComplement other marketing communications “push” activities.
33 Sales Promotion Mechanics 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?
34 Steps in Sales Promotion Program Development Establish objectivesSelect consumer-promotion toolsSelect trade-promotion toolsSelect sales force promotion toolsDevelop the programDecide on the size of the incentiveSet conditions for participationDetermine how to promote and distribute the Promotion ProgramDetermine the length of the ProgramPretest the programImplement and evaluate the program
35 Sales Promotion Advantages Disadvantages Provides extra incentive to purchase productWay to appeal to price sensitive consumerCan generate extra interest in adsEasier to measure effortsHas short term impactCan be abusedCan lead to promotional warsOften does not contribute to brand image
36 INDIVIDUAL ASSIGNMENT Find specific examples of three types of sales promotion in the current market:Consumer sales promotionsTrade sales promotionsEmployee/Salesforce sales promotionsFind one examples from each category by contacting retailers, disributors, wholesalers, brokers, agents, sales staff and employees of the companies and explain the techniques that they use in order to stimulate short term behavioral responses from consumers, the trade (reseller support), or the company’s own sales force.Your assignment is to take pictures of different and diverse promotions in every category and to write a report in order to explain the promotional tecniques, used by different companies. Any example from the Internet is not accepted.Deadline: 30 December 2014