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Sales Promo

Sales Promo

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Published by: Sumudu Liyanarachchi on Oct 19, 2013
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10/19/2013

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Sales Promotion

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Outline
     

What is Sales Promotion Objectives of Sales Promotion Advantages & disadvantages of sales promotions Sales Promotion Strategies Types of Sales Promotions Issues in setting sales promotion budgets

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Sales Promotion

Advertising

Reason to buy

Sales Promotion

Incentive to buy

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Sales Promotion
Definition 01

Sales Promotion  Sales Promotion consists of short‐term  incentives to  encourage the  purchase or sales of a  product. 

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17-5 Sales Promotion Definition 02 A short‐term incentive  Sales Promotion offered to the customer in  order to create more  excitement around the  product or service and to  boost sales 5 .

• In general. .17-6 Objectives of Sales Promotion         Encourage trial Convert trialist to end users To overcome negative perception Encourage brand switching Acquire more customers Build loyalty Encourage bulk buying Encourage trade to stock product Overcome seasonal dips in sales. sales promotion should focus on consumer relationship building.

     .  Can be oversubscribed and may cause promo fulfillment issues. Ability to gain wider in-store presence Can be creative and forge links with other brandscross promo Acquire customer database Disadvantages  If overused consumers will only buy when there is a promotion.  Lack of brand building – brand rely on promotions.17-7 Advantages & disadvantages of sales promotions Advantages Helps to boost sales Quickly arranged competitive activity.

17-8 Types of Sales Promotion Consumer Sales Promotion Consumer market Goal Drive immediate purchase Influence behavior Trade Sales  Promotions Marketing channel 8 .

17-9 REVIEW LEARNING OUTCOME The Objectives of Sales Promotion 9 .

17-10 Trends on Sales Promotion  ¾ of the marketing budget is allocated to sales promotion Nearly 51% of total ad spend represents trade promotions. 24% on media spending 22% on consumer promotion  .

pressure to occupy display space in retail outlets is very challenging.17-11 Why the Growth???      Instant results Faster implementation Measurable Relatively easy and inexpensive With more Brands flowing in. .

17-12 The Downside of Sales Promotion     Brand Erosion Profitability increase is relatively low Implementation cost and problems Orients marketing managers towards short term results .

17-13 Planning Sales Promotion     Who is our target set of consumers? What is the reason for that behavior What is the goal of the program Is there a meaningful economics attached to sales promotion .

17-14 Types of Buyers  Loyalist – Buy a particular brand on a more or less consistent basis People who are loyal to the competing brand Purchase of various brands in one category     Competitive loyalist – Switchers – Price buyers Non Users .

 refunds •Trade deals Loyal  Customers Competitor’s Customers Brand  Switchers Price Buyers •Break loyalty •Persuade to switch •Persuade to buy your  brand more often •Appeal with low  prices •Supply added value .  contests. Type of Buyer Desired Results •Reinforce behavior •Increase consumption •Change purchase timing Sales Promotion Examples  •Loyalty marketing •Bonus packs •Sampling •Sweepstakes. premiums •Price‐lowering  promotion •Trade deals •Coupons. price‐off packages.17-15 Results that are needed ….

17-16 Sales Promotional Strategies PUSH Channel PULL       Distributor / trade incentives Free supplies Sales force incentive Allowances Sales contests POSM    Consumer incentives Free samples Guarantees or extended warranties Loyalty rewards Prize draws Competition    .

17-17 Tools for Consumer Sales  Promotion Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion 17 .

17-18 Coupons      Clip and bring to the store to exchange Now it is phone based Induce loyalty Repeat purchase Keeps the consumers “locked” .

17-19 Coupons Instant redemption coupon Redeemed immediately Bounce back coupons Coupons To encourage customer retention Scanner delivered coupons Response offer coupons Target B2B to stimulate sales .

Tend to loose revenue from existing customers. Threat of counterfeiting coupons Miss-redemption of coupons by traders. . Can copy by competitors easily.17-20 Main Limitations of Coupons      May trigger price war from competition – lower total market value.

17-21 Bonus Packs   Like bundle pricing but this is temporary Adds value .

Promotion    It is used to introduce new products / service Dispose of excess inventory Use excess overhead .17-22 In Pack.

17-23 Specialty Container   Increases product’s perceived value Uy tignan mo ito meron libreng pitchel .

17-24 Issues with Premiums  Offering gifts with low quality will damage the brand Require alteration in production process Handling of package to consumer may become difficult.   .

17-25 Continuity Program /Loyalty Cards .

17-26 Refund / Rebate Promotion     If the product does not perform. then its money back Or consume X number of products and get Y FREE Increases consumer confidence Loyalty program .

the more tickets Creates loyalty .17-27 Sweepstakes    Chance game where the consumer has the chance to win something big through purchases The more purchases.

17-28 Sampling    Used when the consumer is unaware of the brand or product Product buying is prone to retail channel based trial Use when the product can be broken down into smaller dimensions .

17-29 Price off promotion     Use for slow moving items Excess inventory Off season Dislodge competitors .

17-30 Choose the right promotion for the right situation .

17-31 Example Problem New product Consumers not loyal Competitors are attacking the market with ads Excess inventory Shelf life is critical Solution Sampling. sweepstakes. rebates. on pack promo Rebates. loyalty cards Price off. free goods. etc . premiums.

17-32 Consumer Promotion     To induce immediate off take from the shelf To induce trial To buy more of your products To buy immediately .

17-33 Trade Promotion Encourages your trade channel to load up Move inventory from the company to the warehouse of the trade –   Distributor or Key Accounts  Deals with promotional tools for staff and sales people who are involved with the trade. .

.17-34 Trade Promotions .Objectives        Obtain initial distribution Penetrate distribution Obtain more shelf space Build relationship with trade Gain more volumes Combat competition Reduce manufacturer stocks.

17-35 Trade Sales Promotion Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows .

such as wholesalers and retailers. Trade Allowance 36 .17-36 Trade Allowance A price reduction offered by manufacturers to intermediaries.

to encourage other members of the channel to sell the products. Push Money 37 .17-37 Push Money Money offered to channel intermediaries to encourage them to “push” products--that is.

17-38 Cooperative Promotion    Co-branding Using another brand to penetrate the market Good if the equity of the other brand is high or parallel .

17-39 Issues in setting Sales Promotion budgets  How far does sales promotion achieve our communications budgets? Does our sales force need sales promotion to achieve targets? What are our competitor spending? What history do we have or can we acquire on the effectiveness of the sales promotion in our market?    .

17-40 Managing Sales Promotion    Select from wide range of techniques. rebates work best in recessionary period.sampling can get costly.coupons. Pull. goal. – Cost of device-. finish. Evaluating Sales Promotion: – Much easier than with advertising. – Usually clear start. depending on your objectives Select promotional devices based on: – Nature of target audience – Your promotional objectives: Push vs. – Current economic conditions-. .

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