Sales Promotion

Presented by:
Vrushali Bhavana Vivek

Balraj

Aditya

Ragesh

Padmanabh

INDEX
1. The Promotional Mix 2. 4 P's of Marketing 3. What is Sales Promotion? 4. Advertising v/s Sales Promotion 5. Objectives of Sales Promotion 6. Reasons for Rapid Growth of Sales Promotion 7. The Pull & Push Strategies 8. Sales Promotion Tools 9. Advantages / Disadvantages of Sales Promotion 10. History / Financial Figures of Colgate 11. Sales Promotional Techniques used by Colgate 12. History / Financial Figures of Dabur 13. Sales Promotional Techniques used by Dabur 14. History of DentaWhite 15. Sales Promotional Techniques used by DentaWhite

THE PROMOTIONAL MIX

What is Sales Promotion?
A good definition of sales promotion would be as follows:

An activity designed to boost the sales of a product or service. It may include an advertising campaign, increased PR activity, a free-sample campaign, offering free gifts or trading stamps, arranging demonstrations or exhibitions, setting up competitions with attractive prizes, temporary price reductions, door-to-door calling, telemarketing, personal letters on other methods .

SALES PROMOTION
‡ The term Sales Promotion broadly refers to all those promotional activities which are undertaken to stimulate interest, trial or purchase of a product by the end user or other intermediaries in between. Besides advertising and personal selling, all other activities undertaken to promote a product can be classified under sales promotion!

‡According to the Institute of Sales Promotion, "Sales Promotion comprises that range of techniques used to attain sales or marketing objectives in a cost effective manner by adding value to a product or service either to intermediaries or end users, normally but not exclusively within a defined time period."

‡Almost every Company uses Sales Promotion techniques at some stage of the product life cycle since sales promotion techniques provide a strong incentive to BUY!

SALES PROMOTION

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Sales promotion describes promotional methods using special short-term techniques to persuade members of a target market to respond or undertake certain activity. As a reward, marketers offer something of value to those responding generally in the form of lower cost of ownership for a purchased product (e.g., lower purchase price, money back) or the inclusion of additional valueadded material (e.g., something more for the same price). Sales promotions can be directed at either the customer, sales staff, or distribution channel members (such as retailers)

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ADVERTISING V/S SALES PROMOTION

Sales promotions are often confused with advertising. For instance, a television advertisement mentioning a contest awarding winners with a free trip to a Caribbean island may give the contest the appearance of advertising. While the delivery of the marketer s message through television media is certainly labeled as advertising, what is contained in the message, namely the contest, is considered a sales promotion. The factors that distinguish between the two promotional approaches are: 1. 2. whether the promotion involves a short-term value proposition (e.g., the contest is only offered for a limited period of time), and the customer must perform some activity in order to be eligible to receive the value proposition (e.g., customer must enter contest). The inclusion of a timing constraint and an activity requirement are hallmarks of sales promotion.

Objectives of Sales Promotion
Sales promotion is a tool used to achieve most of the five major promotional objectives Building Product Awareness Creating Interest Providing Information Stimulating Demand Reinforcing the Brand

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REASONS FOR RAPID GROWTH OF SALES PROMOTION
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Increasing Competition Customers Have Become More Price Sensitive Sales Promotions Generally Create An Immediate Positive Impact On Sales Products have become more standardized Consumer Acceptance Advertising Has Become More Expensive And Less Effective Trade Has Become More Powerful Emphasis On Sales Volumes Sales Promotions Maximizes Profits Introducing An Element Of Interest Impulse Buying Is Increasing Sales Promotion Specialists Are Available Excess Stocks

THE PULL & PUSH STRATEGIES
PULL STRATEGY : The objective of such promotional efforts would be to create sufficient consumer demand to pull the product through the channels, that is the consumers are encouraged to demand the product from retailers who in turn place orders with wholesaler or manufacturer to meet the consumer demand. A pull strategy is appropriate when
‡ The product demand as high. ‡ It is possible to differentiate the product on the basis of real or emotional features. ‡ Brand consumers show high degree of involvement in the product purchase, ‡ There is reasonably high brand loyalty and ‡ Consumers make brand choice decision before they go to the store.

THE PULL & PUSH STRATEGIES
PUSH STRATEGY : If a firm decides to use push strategy, its efforts are directed at resellers and the manufacturer becomes very dependent on their personal selling abilities and efforts. The promotional efforts are focused at pushing the product through the distribution channels. The communication to resellers is generally through trade circulars or the sales force. A push strategy is appropriate when
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Product categories where there is low brand loyalty Where many acceptable substitutes are available in the market. Relatively new products are to be launched When the brand choice is often made in response to displays in the stores, The product purchase is unplanned or on impulse and The consumer is familiar and has reasonably adequate knowledge about the product.

SALES PROMOTION TOOLS

‡ Consumer Promotion Tools. ‡ Trade Promotion Tools. ‡ Business And Sales-Force Promotion Tools.

Consumer Promotion Tools
Consumer sales promotions encompass a variety of short-term promotional techniques designed to induce customers to respond in some way. The most popular consumer sales promotions are directly associated with product purchasing. These promotions are intended to enhance the value of a product purchase by either reducing the overall cost of the product (i.e., get same product but for less money) or by adding more benefit to the regular purchase price (i.e., get more for the money). Major Consumer Promotional Tools: ‡ Samples ‡ Coupons ‡ Cash Refund Offers (rebates) ‡ Price Packs (cents off deals) ‡ Premiums ‡ Frequency Programs ‡ Patronage Programs ‡ Prizes (contests, sweepstakes, games) ‡ Free Trials ‡ Product Warranties ‡ Tie-in-Promotions ‡ Cross-Promotions ‡ Point-of-Purchase Displays and Demonstrations

Trade Promotion Tools
Trade Sales Promotions are used to push a product through the channel by encouraging channel members to purchase and also promote the product to their customers. For instance, a trade promotion aimed at retailers may encourage retailers to instruct their employees to promote a marketer s brand over competitors offerings. With thousands of products competing for limited shelf space, spending on trade promotion is nearly equal that spent on consumer promotions. Major Trade Promotional Tools: ‡ Price-off (off-invoice or off-list) ‡ Allowances ‡ Free Goods ‡ Point-of-Purchase Displays ‡ Advertising Support Programs ‡ Sales Incentives or Push Money ‡ Trade Shows

Business And Sales-Force Promotion Tools
The use of sales promotion is not limited to consumer products marketing. In business-to-business markets sales promotions are also used as a means of moving customers to action. However, the promotional choices available to the B-to-B marketer are not as extensive as those found in the consumer or trade markets. For example, most B-to-B marketers do not use coupons as a vehicle for sales promotion with the exception of companies that sell to both consumer and business customers Major Business And Sales-Force Promotional Tools: ‡ Trade Shows and Conventions ‡ Sales Contests ‡ Specialty Advertising

ADVANTAGES / DISADVANTAGES OF SALES PROMOTION
ADVANTAGES : ± Price discrimination ± Effect on consumer behavior ± Effect on trade behavior ± Regional Differences ± Induce Consumers to try a new product DISADVANTAGES : ± Increased price sensitivity ± Sales may hit a post-promotion dip ± Quality image may become tarnished ± Merchandising support from dealers is doubtful ± Short-term orientation

HISTORY
‡ From a modest start in 1937, when hand-carts were used to distribute Colgate Dental Cream, ColgatePalmolive (India) today has one of the widest distribution networks in India a logistical marvel that spans around 4.5 million retail outlets across the country, of which the Company services 1.5 million outlets directly. The Company has grown to a Rs. 1300 crore plus organization with an outstanding record of enhancing value for its strong shareholder base. The company dominates the Rs. 2400 crore Indian toothpaste market. Since 1976, Colgate has worked in close partnership with the Indian Dental Association (IDA) to spread the message of oral hygiene to children across the country under its Bright Smiles, Bright Futures Schools Dental Education Program. This program has successfully reached more than 70 million school children covering around 1,30,000 schools in 250 towns across the country since its launch. The program focuses on children so that the message of good oral hygiene is carried home to families and the community at large. In 2004, as an additional effort to create awareness for good oral hygiene Oral Health Month (OHM) was introduced. Since its launch, OHM is conducted each year during September / October, where free dental check ups are conducted by Colgate in partnership with IDA across the country. OMH is conducted in designated towns and cities to establish and promote the importance of good oral hygiene, OHM is Colgate s mass consumer contact program. The strong relationship and the trust of generations of consumers, trade and the dental profession built over decades of operations in India has made Colgate a trusted household name. In 2003 Colgate was ranked as India s Most Trusted Brand across all categories by Brand Equity s Most Trusted Brand Survey a position it has held in succession for four consecutive years from 2003 to 2007. Prior to this, Colgate was also rated as the #1 brand by the A&M MODE Annual Survey for India s Top Brands for eight out of nine years during the period 1992 to 2001.

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MILESTONES
1806 - William Colgate starts a starch, soap and candle business on Dutch Street in New York City. 1817 - First Colgate advertisement appears in a New York newspaper. 1857 - Upon the death of founder William Colgate, the company is reorganized as Colgate & Company under the management of Samuel Colgate, his son. 1864 - B.J. Johnson opens a soap factory in Milwaukee, WI which later becomes the Palmolive Company. 1873 - Colgate introduces toothpaste in jars. 1896 - Colgate introduces toothpaste in a collapsible tube. 1906 - Colgate & Company celebrates its 100th anniversary. Product line includes over 800 different products. 1911 - Colgate distributes two million tubes of toothpaste and toothbrushes to schools, and provides hygienists to demonstrate tooth brushing. 1930 - On March 13, Colgate is first listed on the New York Stock Exchange. 1953 - Colgate-Palmolive Company becomes company's official name. 1968 - Colgate toothpaste adds MFP Fluoride, clinically proven to reduce cavities. 1972 - Colgate acquires Hoyt Laboratories, which later becomes Colgate Oral Pharmaceuticals. 1983 - Colgate Plus toothbrush is introduced. Today over 1.6 billion Colgate toothbrushes are sold annually worldwide. If you lined them up end to end, they would circle the globe 16 times. 1985 - Colgate-Palmolive enters into a joint venture with Hong Kong-based Hawley & Hazel, a leading oral care company, which adds strength in key Asian markets. 1989 - Annual Company sales surpass the $5 billion mark. 1992 - Colgate acquires the Mennen Company. Today, Mennen products are sold in over 52 countries. Colgate Total toothpaste introduced. 1996 - Bright Smiles, Bright Futures oral health education program expands to 50 countries, and today reaches over 50 million children annually. 1997 - Colgate Total toothpaste is introduced in the U.S. and quickly becomes the market leader. Only Colgate Total, with its 12-hour protection, fights a complete range of oral health problems. 2004 - Colgate acquires the GABA oral care business in Europe, with its strength in the important European pharmacy channel and its ties with the dental community. Today , with sales surpassing $13 billion, Colgate focuses on four core businesses: Oral Care, Personal Care, Home Care and Pet Nutrition. Colgate now sells its products in over 200 countries and territories worldwide.

COLGATE - STATISTICS
Rs. In Lakhs Financial Year Sales
99822 108958 117688 116089 105689 104208 107253 121750 138538 155321

Profit After Tax (PAT)
4567 5179 6250 6979 8866 10800 11329 13760 16017 23171

1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

FINANCIAL STATISTICS
Sales (In Lakhs)
160000 140000 120000 100000 80000 60000 40000 20000 0

PAT (In Lakhs)
25000 20000 15000 10000 5000 0

SALES PROMOTION TECHNIQUES
Consumer Promotion Tools
Colgate Maxfresh Cooling Crystals Before Promotion: 150 gm Rs.50/With Promotion Offer: 150g + 80g + Free whitening toothbrush. Amount : Rs. 50/- (150g) + Rs. 29/- (80g) = Rs.79/Colgate Active Salt Before Promotion : 200 gm___________, only 50 gm Rs. 15/With Promotion Offer : 200g + 50g (worth Rs.15/-) = Rs. 52/Amount : Rs. __/- (200g) + Rs.__/- (50g) = Rs.82/Colgate Strong Teeth All Round Decay Protection Before Promotion : 200 gm Rs. 54. With Promotion Offer: 200g + 100gm + Extra Clean Toothbrush Amount : Rs. 54/- (200g) + Rs.28/- (100g) = Rs.82/-

SALES PROMOTION TECHNIQUES
Trade Promotion Tools

‡Rs.20/- off on purchase of 12pcs of 50gms toothpaste. ‡Get a scratch card with every purchase of 100gms toothpaste.

HISTORY
The story of Dabur began with a small, but visionary endeavor by Dr. S. K. Burman, a physician in Bengal. His mission was to provide effective and affordable cure for ordinary people in farflung villages. With missionary zeal and fervor, Dr. Burman undertook the task of preparing natural cures for the killer diseases of those days, like cholera, malaria and plague. The mission continues... Soon the news of his medicines traveled, and he came to be known as the trusted 'Daktar' or Doctor who came up with effective cures. And that is how his venture Dabur got its name - derived from the Devanagri rendition of Daktar Burman. Dr. Burman set up Dabur in 1884 to produce and dispense Ayurvedic medicines. Reaching out to a wide mass of people who had no access to proper treatment. Dr. S. K. Burman's commitment and ceaseless efforts resulted in the company growing from a fledgling medicine manufacturer in a small Calcutta house, to a household name that at once evokes trust and reliability. Dabur India Ltd. made its beginnings with a small pharmacy, but has continued to learn and grow to a commanding status in the industry. The Company has gone a long way in popularizing and making easily available a whole range of products based on the traditional science of Ayurveda. And it has set very high standards in developing products and processes that meet stringent quality norms.

MILESTONES
‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ 1884 - Established by Dr. S K Burman at Kolkata 1896 - First production unit established at Garhia Early 1900s - Production of Ayurvedic medicines 1930 - Automation and upgradation of Ayurvedic products manufacturing initiated 1936 - Dabur (Dr. S K Burman) Pvt. Ltd. Incorporated 1940 - Personal care through Ayurveda 1949 - Launched Dabur Chyawanprash in tin pack 1970 - Entered Oral Care & Digestives segment 1978 - Launches Hajmola tablet 1979 - Commercial production starts at Sahibabad, the most modern herbal medicines plant at that time 1984 - Dabur completes 100 years 1988 - Launches pharmaceutical medicines 1994 - Comes out with first public issue 1994 - Enters oncology segment 1994 - Leadership in health care 1998 - Burman family hands over management of the company to professionals 2000 - The 1,000 crore mark 2002 - Dabur record sales of Rs 1163.19 crore on a net profit of Rs 64.4crore 2003 - Dabur demerges Pharmaceuticals business 2005 - Dabur aquires Balsara 2006 - Dabur crosses $2 bin market cap, adopts US GAAP. 2006 - Approves FCCB/GDR/ADR up to $200 million

DABUR - STATISTICS
Rs. In Crores Sales
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 863 982 1100 1200 1285 1236 1417 1757 2080 2396

Financial Year

Profit After Tax (PAT)
50 77 78 64 85 107 156 214 282 333

FINANCIAL STATISTICS
Sales (Rs. In Crores)
2500 2000 1500 1000 500 0 1999 2000 2001 2002 2003 Sales 2004 2005 2006 2007 2008

PAT (Rs. In Crores)
350 300 250 200 150 100 50 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Profit After Tax (PAT)

SALES PROMOTION TECHNIQUES
Consumer Promotion Tools
Dabur Red Toothpaste Before Promotion : 200 gm Rs. 53. With Promotion Offer: 200g + Binaca Toothbrush Amount : Rs. 53/- (200g) + Rs.18/- (brush) = Rs.54/- against Rs.71/Dabur Babool Toothpaste with Natural Calcium Before Promotion : 190 gm Rs. 27. With Promotion Offer: 190g + Binaca Toothbrush Amount : Rs. 27/- (190g) + Rs.15/- (brush) = Rs.27/- against Rs.42/Before Promotion : 190 gm Rs. 27. With Promotion Offer: 190gms + 190 gms Amount : Rs. 27/- (190g) + Rs. 27/- (190g) = Rs.44/- against Rs.54/Dabur Babool Neem Toothpaste Before Promotion : 185 gm Rs. 35. With Promotion Offer: 185g + 50g + Toothbrush Amount : Rs. 35/- (185g) + Rs.12/- (50gm) + Rs.15/- (brush) = Rs.35/against Rs.62/-

SALES PROMOTION TECHNIQUES
Trade Promotion Tools

MARKET SHARE
2006
10.1%

53%

37.4%

Dabur Colgate Others

2007

12.2%

51% 36.6%

Dabur Colgate Others

DENTAWHITE

DentaWhite
DentaWhite was formed by a group of 7 friends in 2004. It was started as a toothpaste manufacturing company which later started manufacturing toothbrush and other oral care products. It has a market share of 5.2% today as against 4.1% in the previous year.

SALES PROMOTION TECHNIQUES
Consumer Promotion Tools
DentaWhite Herbal Toothpaste Before Promotion : 200 gm Rs. 50/-. With Promotion Offer: 200g + 100g + DentaWhite Toothbrush Amount : Rs. 50/- (200g) + Rs. 30/- (100g) + Rs.12/- (brush) = Rs.70/against Rs.92/Before Promotion : 200 gm Rs. 50/-. Promotion Offer : Bring the empty tube and get a travel pack worth Rs.9/- free. Before Promotion Promotion Offer Amount : 150 gm Rs. 42/-. : Rs.5/- off. : Rs. 42/- (150g) = Rs.37/- against Rs.42/-

Limited Edition 100gms DentaWhite Strawberry flavored toothpaste for the same price of Rs.30/-

SALES PROMOTION TECHNIQUES
Trade Promotion Tools

‡ Buy 40 pcs of 200gms DentaWhite Herbal Toothpaste and get 3 DentaWhite Toothbrush worth Rs.12/- each free. ‡ Buy 50 pcs of 100gms DentaWhite Herbal Toothpaste and get additional 3 absolutely free. ‡ On Window display of DentaWhite products get 5% discount on the purchases for next 2 months.