16. sales promotion
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Sales Promotion © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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Transcript of 16. sales promotion
Sales PromotionSales Promotion
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
An extra incentive to buy
An extra incentive to buy
A tool to speed up sales
A tool to speed up sales
An extra incentive to buy
An extra incentive to buy
A tool to speed up sales
A tool to speed up sales
Targeted to different parties
Targeted to different parties
1. Defining Sales Promotion
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
“A direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or the ultimate consumer with the primary objective of creating an immediate sale.”
“A direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or the ultimate consumer with the primary objective of creating an immediate sale.”
Growing power of retailersGrowing power of retailers
Declining brand loyaltyDeclining brand loyalty
Increased promotional sensitivityIncreased promotional sensitivity
Brand proliferationBrand proliferation
Fragmentation of consumer marketsFragmentation of consumer markets
Short-term focus of marketersShort-term focus of marketers
Increased accountabilityIncreased accountability
CompetitionCompetition
ClutterClutter
CompetitionCompetition
Increased accountabilityIncreased accountability
Short-term focus of marketersShort-term focus of marketers
Fragmentation of consumer marketsFragmentation of consumer markets
Brand proliferationBrand proliferation
Increased promotional sensitivityIncreased promotional sensitivity
Declining brand loyaltyDeclining brand loyalty
Growing power of retailersGrowing power of retailers
2. Reasons for Increase in Sales Promotion
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
ReasonsReasons
3. Sales Promotion Vehicles
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Consumer-OrientedConsumer-Oriented
Trade-OrientedTrade-Oriented
SamplesSamples
CouponsCoupons
PremiumsPremiums
Contests/sweepstakesContests/sweepstakes
Refunds/rebatesRefunds/rebates
Bonus PacksBonus Packs
Price-off dealsPrice-off deals
Frequency programsFrequency programs
3. Sales Promotion Vehicles
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Consumer-OrientedConsumer-Oriented
Event marketingEvent marketing
To increase consumption of an established
brand
To increase consumption of an established
brand
To target a specific segment
To target a specific segment
Enhance IMC efforts and build
brand equity
Enhance IMC efforts and build
brand equity
To defend (maintain)
current customers
To defend (maintain)
current customers
To obtain trial and purchaseTo obtain trial and purchase
Objectives of Consumer-Oriented Sales Promotion
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
ObjectivesObjectives
The products are of relatively low unit value,
so samples don’t cost much
The products are of relatively low unit value,
so samples don’t cost much
The products are divisible and can be broken into small sizes that can reflect the
products features and benefits
The products are divisible and can be broken into small sizes that can reflect the
products features and benefits
The purchase cycle is
relatively short so the
consumer can purchase in a
relatively short time period
The purchase cycle is
relatively short so the
consumer can purchase in a
relatively short time period
The products are of relatively low unit value,
so samples don’t cost much
The products are of relatively low unit value,
so samples don’t cost much
The products are divisible and can be broken into small sizes that can reflect the
products features and benefits
The products are divisible and can be broken into small sizes that can reflect the
products features and benefits
Sampling
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Sampling Works Best When
Sampling Works Best When
Event samplingEvent sampling
Door-to-doorDoor-to-door
Direct mailDirect mail
Central location distributionCentral location distribution
In-store samplingIn-store sampling
Cross-product samplingCross-product sampling
Co-op package distributionCo-op package distribution
With newspaper/magazineWith newspaper/magazine
Internet sitesInternet sites
Event samplingEvent sampling
With newspaper/magazineWith newspaper/magazine
Co-op package distributionCo-op package distribution
Cross-product samplingCross-product sampling
In-store samplingIn-store sampling
Central location distributionCentral location distribution
Direct mailDirect mail
Door-to-doorDoor-to-door
Sampling Methods
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
MethodsMethods
Free Premiums: Only require purchase of the product
Free Premiums: Only require purchase of the product
Self-liquidating Premiums: require consumer to pay some or all of the cost of the premium
Self-liquidating Premiums: require consumer to pay some or all of the cost of the premium
Free Premiums: Only require purchase of the product
Free Premiums: Only require purchase of the product
Premium: an offer of an item of merchandise or service either free or at a low cost that is an extra incentive for customers
Premium: an offer of an item of merchandise or service either free or at a low cost that is an extra incentive for customers
Premiums
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Two Types of PremiumsTwo Types of Premiums
Contests and Sweepstakes
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Contest: a promotion where consumers compete for prizes or money on the basis of skills or ability. Winners are determined by judging entries or ascertaining which entry comes closes to some predetermined criteria
Contest: a promotion where consumers compete for prizes or money on the basis of skills or ability. Winners are determined by judging entries or ascertaining which entry comes closes to some predetermined criteria
Sweepstakes/games: a promotion where winners are determined purely by chance and cannot require a proof of purchase as a condition for entry. Winners are chosen by random selection from a pool of entries or generation of a number to match those held by game entrants.
Sweepstakes/games: a promotion where winners are determined purely by chance and cannot require a proof of purchase as a condition for entry. Winners are chosen by random selection from a pool of entries or generation of a number to match those held by game entrants.
Summary of Consumer-Oriented Promotions and Market Objectives
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Trade ShowsTrade Shows
Contests and Incentives
Contests and Incentives
Trade AllowancesTrade Allowances
Point-of-Purchase Displays
Point-of-Purchase Displays
Sales Training Programs
Sales Training Programs
Cooperative Advertising
Cooperative Advertising
Types of Trade-Oriented Promotions
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Buying Allowances
Buying Allowances
Promotional Allowances
Promotional Allowances
Slotting Allowances
Slotting Allowances
Encourage retailers to display
existing brands
Encourage retailers to display
existing brands
Obtain distribution of new products
Obtain distribution of new products
Maintain trade support for existing
products
Maintain trade support for existing
products
Build retail inventoriesBuild retail inventories
Trade-Oriented Sales Promotion Objectives
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
ObjectivesObjectives
