Unit-5

Sales promotion planning: • 1. Planning - SALES

-sales volume-market share-strengths/ weaknesses-key success factors

• 2. Planning - MARKET ANALYSIS

-market definition -market size -market segmentation-industry structure and strategic groupings-competition and market share -competitors ‘strengths/ weaknesses -market trends

Sales promotion planning 3. Planning – CONSUMER ANALYSIS• -Nature of the buying decision

-participants -demographics -psychographics -buyer motivation and expectation

4. OBJECTIVES OF THE SALES PROMOTION PROGRAMcorporate SALES objectives financial objective marketing objectives long term objectives

• 5. COMPETITION ANALYSIS product/ market shareproduct / market positioningsales promotions strategy promotional goalpromotional mix

Implementing and Controlling the Sales Promotion

• Implementation and control plans for individual promotion should be established. Implementation planning must cover lead time and sell – off time. Lead time is the time necessary to prepare prior to launching it.

• Evaluating the sales promotion Result • Evaluation is a crucial requirement and yet, according to researches, evaluation of

promotional programs receives little attention. Even where an attempt is made to evaluate a promotion, it is likely to be a superficial evaluation and in terms of profitability is even less effective. Manufacturers can use four methods to measure sales promotion effectiveness. The most common method is to compare sales before, during and after a promotion.

• Suppose a company has a 6% market share in the pre-promotion period, which jumps to 10% during the promotion, falls to 5% immediately after the promotion, and raised to 7% after some time, consumer panel data would reveal the kind of people who responded to the promotion and what they did after the promotion. If more information is needed, consumer survey can be conducted to learn how many recall the promotion

EVALUATION OF SALES PROMOTION EFFECTIVENESS AND CONTROL

EVALUATION OF SALES PROMOTION EFFECTIVENESS

Evaluation of Sales Promotion effectiveness: Pre Testing ,Concurrent testing and Post-testing

• Pretesting: The pre-test can be conducted to assess these factors by using focus groups and consumer panels. Another approach, ballot method, consists of giving ballot paper to a list of consumers. They are requested to evaluate different illustrated promotion schemes and vote for the most right and return the ballot to the firm. A relatively expensive but more accurate method is a portfolio test. A portfolio of sales promotion is prepared and shown to consumers in person and the responses are noted.

To test consumers behavior responds such as trial purchase, repeat purchase, etc., pretesting is done at a selective individual store at a test market. All other factors remains same at other markets; only the sales promotion device is tested at the test market and the change is noted.

• Concurrent testing This testing is done when the sales promotion is in

progress. Concurrent testing permits the promotion manager to modify the sales promotion, if needed. This type of testing is conducted in terms of sales data which can be obtained on a weekly or monthly basis. If the promotion is a consumer contest and the consumer is not required to purchase anything, the response to promotion can be adjudged by the number of entries received at some interval and if need be, the contest period can be extended. In case of a coupon distribution programme, similar approach can be adopted by keeping track of coupons redeemed.

• Post-testing • Post-testing is done after the promotion period is

over. To assess the changing consumer awareness and attitude, telephone calls could be made , questionnaire could be mailed to the consumers and personal interviews can be arranged. In these methods, the most expensive is the personal interview method and the least expensive is the mail. The information is sought pertaining to the promotion event. In case of samples on premiums distributed through retail stores, intercept interviews at the Point of Sale can reveal more reliable information. To measure the sales affect, sales figures before the promotion period can be compared with figures at the end of promotion and one month after the promotion ends.

Sales Promotion recent Trends: Customers Expectations

• Marketers who employ sales promotion as a key component in their promotional strategy should be aware of how the climate for these types of promotions is changing. For instance, the onslaught of sales promotion activity over the last several decades has eroded the value of the short-term requirement to act on sales promotions. Many customers are conditioned to expect a promotion at the time of purchase otherwise they may withhold or even alter their purchase if a promotion is not present. For instance, food shoppers are inundated on a weekly basis with such a wide variety of sales promotions that their loyalty to certain products has been replaced by their loyalty to current value items (i.e., products with a sales promotion). For marketers the challenge is to balance the advantages short-term promotions offer versus the potential to erode loyalty to the product.

Sales Promotion Trends: Electronic Delivery

• Sales promotions are delivered to customers in many ways such as by mail, in-person or within print media. However, the Internet and mobile technologies, such as cell phones, present marketers with a number of new delivery options. For examples, the combination of mobile devices and geographic positioning technology will soon permit marketers to target promotions to a customer’s physical location. This will allow retailers and other businesses to issue sales promotions, such as electronic coupons, to a customer’s mobile device when they are near the location where the coupon can be used.

Sales Promotion Trends: Tracking

• As we discussed in our coverage of advertising, tracking customer’s response to marketers’ promotional activity is critical for measuring success of an advertisement. In sales promotion, tracking is also used. For instance, grocery retailers, whose customers are in possession of loyalty cards, have the ability to match customer sales data to coupon use. This information can then be sold to coupon marketers who may use the information to get a better picture of the buying patterns of those responding to the coupon.

Sales Promotion Trends: Internet Communication

• For many years consumers typically became aware of sales promotions in passive ways. That is, most customers obtained promotions not through an active search but by being a recipient of a marketer’s promotion activity (e.g., received coupons in the mail). The Internet is changing how customers obtain promotions. In addition to websites that offer access to coupons, there are a large number of community forum sites where members share details about how to obtain good deals which often include information on how or where to find a sales promotion. Monitoring these sites may offer marketers insight into how customers feel about certain promotions and may even suggest ideas for future sales promotions.

Sales promotion techniques/types

• Refer First unit

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