Sales Promotion Chapters 18 19 Sales Promotion l

Sales Promotion Chapters 18, 19

Sales Promotion l Marketing communication tool that offers sales-related incentives to generate a specific, measurable action or response for a product or service.

Sales Promotion • Acts as a marketing communication tool • Offers sales-related incentives • Generates response or action • Produces measurable results • Changes the accepted price-value relationship

Sales Promotion STRENGTHS WEAKNESSES • Gives an extra incentive to act • Adds clutter • Changes the price/value relationship • Can set false retail price • Gives sense of immediacy to purchase • Some consumers won’t buy unless offered a price deal • Adds excitement • Stimulates trial • Stimulates continuity of purchase or support, repeat purchases • Increases purchase frequency and or quantity • Promotes reminder merchandise • Motivates trade support • Builds databases • Leads to forward buying by trade members • Fraudulent redemption of coupons and theft of premiums • Can be difficult to get trade cooperation • Can undercut brand images, create brand insensitivity

Sales Promotion Compared to Other Promotion Mix Tools Sales Promotion Advertising Direct Public Response Personal Relations (Interactive) Selling Time Frame short term long term short term both Primary Appeal both emotional rational Primary Objective sales image/ brand position goodwill sales relationships Contribution to Profitability high moderate low high

Push and Pull Strategies PUSH: PULL: • Directs Marketing to Resellers • Directs Marketing to End-Users Manufacturer PUSH Wholesaler PULL PUSH Retailer PUSH Consumer

Contributions to marketing communication strategy -- 1) Introducing new product Reduced price l In-store sampling l Special tie-in l Coupons l Mail samples l Offer reduced prices in stores l Contests l

Introducing new product l Trade Promotions n Trade advertising n Trade sales promotion techniques – Price discounts – Point-of-purchase (Po. P) displays – Advertising allowances n Repeat purchase promotions – Coupons – Rebates – Other rewards

Contribution -- Brand Building l Techniques to enhance brand image n Tie-ins l (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. Goals of proactive, longrange objectives l Create additional revenue or market share l Enlarge target market l Create positive experience l Enhance product value and brand equity 10. 9 Goals of reactive (normally negative or short-term situation l Match competition l Move inventory l Generate cash l Perhaps go out of business

Sales Promotion Mix Which to use l How to combine l How to deliver l n Separate 10. 4 or overlay

Sales Promotion Objectives CONSUMER TRADE • Prompt trial by new users • Introduce products to new distribution areas • Introduce new or improved products • Stimulate repeated product use • Encourage more frequent purchase or multiple purchases • Keep customers by providing an implied reward • Reinforce advertising or personal selling • Stimulate trade support 10. 12 • Reduce selling costs • Improve working habits • Offset competitive promotions • Increase sales volume • Control inventory • Stimulate in-store support • Create a high level of excitement among those responsible for product sale

Trade Sales Promotion -- Resellers l l l Dealer Contests Trade Coupons Dealer Loaders buying loaders n display loader n 10. 10 l Trade Deals n Buying allowances – slotting allowance – free goods allowance Advertising and cooperative advertising allowances n Display allowances n

Trade Sales Promotion -- Sales Force l Supportive programs n Sales meetings n Sales kits l Motivational programs n contests n honors clubs n push money 10. 11

Consumer Sales Promotion Techniques • Price Deals • Discounts • Cents-off • Price-pack deals • Bonus packs • Banded pack • Coupons • Refunds and Rebates

Consumer Promotions • Contests, Sweepstakes, Games • Premiums n Direct premiums – Store premiums – In-packs – On-packs – Container premiums n Mail premiums n Self-liquidator n Continuity-coupon plan n Free-in-the-mail premium

Consumer Promotions • Samples • Continuity Programs n Frequent l flyer programs Specialties, event sponsorship, licensing