Sales Promotion and Stakeholder Relations(1)

• Concept of “Retail Therapy”

• ‘A rewarding Experience’ – qualities : FUN, ACTION REWARD !

• Bottom line: Customers are substantially changing their buying

behaviour, habits and views of purchasing

“ Sales Promotion comprises the incentives and offers that

encourage people to behave in a particular way at a particular
time and place, usually delivered by the three tools of
advertising, publicity (PR) and direct marketing ”

‘Sales promotion is a range of tactical marketing techniques designed

within a strategic framework to add value to a product or service to achieve
specific sales and marketing objectives ‘(Institute of Sales Promotion, UK)
Key Question to be focused upon in Sales Promotions
: “Who do I want to do What?”
SP & SR (2)

• All advertising media spend-TV, Press, Outdoor etc is about a third of the spending on Sales
Promotion (in 1980s, Advt: P= 60:40%, 2013: 25:75%, 2017/18 : 15 :85%)
• Sales Promotion is big- about the same as the rest –Advertising, PR, Direct Marketing put together

8 Reasons why Sales Promotion has grown extensively:

(i) A TIE-BREAKER
(ii) Offers Novelty, Excitement and Humour- experiential marketing
(iii) Provides short-term results
(iv) Helps ‘narrow-casting’
(v) Antidote to advertising messages-helps behaviour change
SP &SR (3)

(vi) Effective: SP + advt. effect on TV is 2 to 7 times more than just ads

(vii) Flexibility: builds, repairs and sustains relationships
(viii) ‘Interest and brand lock-in’ : bounce-back promotions( a second sales
promotion when customers take up the first sales promotion)-eg: mobile mktg.
SP&PR(4)  Customers and their behaviour
Characteristics: Changing behaviour and views of purchasing
e.g. Boots: Anti-ageing cream a big hit thr’ sales promotions aided by word of
mouth and clinical tests..a case of successful VIRAL MARKETING !

Total global market for anti-ageing cream in the range of

$ 30 billion !

What do Customers want ?

a) Value for money
b) Competitive pricing BOGOF
c) Convenience
EXTRA FILL
d) Prompt service
e) Good shopping experience
SP : cash or holiday ?
90% take the holiday
SP: Big Winners ?
 SP& SR (5) Customer Insights
Dampeners and Trends..

Operating in silos (banks/financial and mobile services)> poor post purchase

experience..undoes years of brand building efforts

Bill Gates, “Your most unhappy customers are your biggest source of learning”

i. Empower customer service arms with a sales promotion effort..how many do

it ??
ii. Inadequate customer service..pre and post purchase
iii. Fraudulent promotions
iv. Not tapping add-ons..sale of accessories thr’ websites [E tailing, a growing
medium of sales]or offers-cars, hotels, train tickets with air bookings,
restaurants,clothing,toiletries
v. Ineffective mobile marketing: mobile a constant companion can be used smartly
or abused up to a point of irritation. SMS used very effectively as a promotional
medium to garner over 20% public funding during Tsunami
Sales Promotion & PR(6)

(vii) SP assists bonding with brands ..TESCO ‘Loyals’

customers remember brand names of promotional items on their desks (76% recall it
of which 50-52% purchase these…pens, calendars, post it notes, calculators ..)

(viii) Customers have come of age .. Integrative approach needed..customers not the sole focus of
marketing department (expands beyond retail customers to B2B buyers. All customers are
“members of the public”)
Sales Promotion & SR (7)- understanding and identifying customers..concepts

Customer relationship -> a two way communication and understanding process

• Customers ,existing and potential -a heterogeneous mix-varying
attitudes, likes, preferences and prejudices
• Everyone involved with customers or impacting them within an
organisation needs to know about them
• Customers are constantly evaluating organisations, brands and services
• CRM :
• “Making sure that one understands the customer well and
establishing a lasting relationship whereby customers trust the company, its
brands and services is called customer relationship management”
• Different types of customers each with a unique approach to buying > segments->
sorting> market segments..segmenting customers by communication preferences..way
forward
• B2B: primary and secondary customers (customers’ customers and or consumers)
Sales Promotion & PR (8)

Put yourself in the recipients shoe or role ( read customers)

• Human beings : a complex mix >>baggage of differences ..culture,

upbringing, environmental influences and life experiences
• Assumptions not tested by research can be very misleading
• M&S –June 2007..uses report of Women’s Institute(WI) to vet future
clothing designs, when not used ,the clothing flopped
• Apply the ‘Self-recognition criteria’ (customer’s shoes) to identify the
“future shapers”

What
ticks ?
what makes customers think, absorb and react ? !
be creative and innovative in use of promotional medium
OUT OF HOME MEDIA OPTIONS- 4 categories
BILL STREET TRANSIT ALTERNATIVES
BOARDS FURNITURE

Bicycles and Airports Airborne e.g. hot air balloons

Bulletins Bicycle Racks and in-flight
advertising

Buses- Arena and stadium advertising,

Digital Trolleys exteriors cinema halls
billboards and interiors

Posters Bus Shelters Rail Systems Cartons/Cups

& Subways

Wall Murals Kiosks Taxicabs Shopping and dry clean Bags

Sales Promotion & PR (9)
Future shapers, characteristics :

• Value authenticity and originality

• Well informed and hugely involved
• Individualistic
• Time poor
• Socially responsible, ethically sensitive
• Curious, open minded and receptive
• Advocates of ideas

What is the new marketing mix ?? Going beyond the 4 Ps + 3

product or service, place ,price, promotion + process, people and
physical evidence  7 Ps ( Kotler once added ‘politics’ )
Ps are outdated
Sales Promotion & SR (10)
The new marketing mix-the offer, the six Cs and matching customer expectations

Products and Services need to offer a bundle of characteristics : Six Cs

(developed by Roddy Mullin and Cathy Ace ,2001)

• Cost
• Convenience
• Concept
• Communication
• Customer Relationship and
• Consistency

The above needs to be addressed from the perspective of the CUSTOMER

The six C formula replaces the ‘hierarchical silos’ ( as in the case of outsourced functions –call centres in banks and
financial services) of the 4 or 7 Ps with one of Relationships ( internal and external)
Sales Promotion &PR (11) The Six Cs
• Cost : cost vs. value perception… ‘quality of life assessment’ with
elements such as cost of time and travel to make a purchase
( Future Foundation studies: customers restrict radius of travel within 14 km)
• Convenience of buying :place/location, mode of purchase, travel,
parking ( customers are lazy!). Studies confirm convenience scores over
price and range
• Concept: a mix of product and service..warranty, after sales service..
’value for money’..” a brand is principally a consolidation of a concept
into an easy -to -remember space in the costumer’s mind”
• Communication: manner and method..SP becomes a persuader-(mobile
marketing, E-tailing)
• Customer relationship: respect , recognition and remembrance..
Important to integrate responses to customers across the organization
( research indicates an integrated approach is worth 30% of sales (or a loss of 30% if it is absent!)

• Consistency : reassurance of ongoing quality & reliability of other 5 Cs

Sales Promotion & SR (12)
Tapping the customer’s mind: Branding, Buying Process and Behaviour

• Branding : process of lodging what is on offer in the customer’s mind retention

devices : logo or brand name..(shorthand)
• Sales Promotion needs to match and enhance brand values
• Buying Process: different for different purchases
• Models of Buying : Involvement Model
• “Belongingness precedes Belief”..normally thought to be the other way round..belongingness because of
friends and family-case of church ….and is about :---

{Behaviour before Attitude}

• Sales Promotion can assist in change in behaviour ( free trials, bounce back in mobile
marketing)
• Surveys show that far more people think that it is a good thing to exercise regularly (attitude) than actually
practice it ( behaviour) ! , people drink more alcohol (behaviour) than they are prepared to admit it
(attitude) . People did not comply with use of seat belts while driving despite being urged by the govt. till it
was legislated ( grumbled but eventually complied)
Advertising and sales promotion campaigns that directly impact on the behaviour of
customers succeed far more than those that focus primarily on creating awareness
and changing attitudes
 Sales Promotion & SR (16)
The Promotional Mix

• Advertising : paid for space and time in broadcast, print media or the
new media( websites, interactive TV and SMS) and outdoor

• Publicity (PR) : 3rd party endorsement and opinions-powerful option

• Direct Marketing: personal selling/presentations(one-on-one) and field

marketing, new media: interactive TV, e-mails, call centres

• Sales Promotion: incentives and offers that encourage desired

customer behaviour
 Sales Promotion & SR (13)… Role of Influencers

• Customers are influenced by others when they

purchase..understanding their influence important..basis of ‘viral
marketing’
• Offer : the bundle of six Cs..basis of the what the brand promises
• Key role of the SP or Brand Manager is to enhance the ‘brand
equity’ – the sum total of quality, value and image as customers
perceive and understand it.. A company is as good as its brand
hence most CEOs and MDs are actively involved in building brands
adding to the ‘intangible asset’ of a company and its brands.
{Worshipful Company of Marketers (www.marketors.org)}
• Brand perceptions of a brand can vary drastically across countries
( Guinness unwittingly advertised in Africa using a symbol that it improved
fertility; Brylcreem was thought of as a food delicacy in an African country!)
• Brands are sometimes repositioned – (Lucozade was rebranded as a
sports drink from its previous perceived positioning as an expensive drink when
one was really ill)
 Sales Promotion & SR(14)- Sales Promotion and Ethics

• Need to guard against cutting corners, looking at the fine print as a get-out,
promise unrealistically

It takes years to build your reputation and a few moments to break it

Warren Buffet

• Studies confirm that those businesses that were consistently more

successful were the ones who did not place profit first but in second place
to a core ideology that often stressed responsibility to others
• Philip Kotler : MARKETING 3.0 ( Value Creation)
(case of Cadbury’s –the ‘Cadbury Experience’ visited by over 450,000 people every year..tarnished
somewhat when they delayed owning up to a packaging and product problem. Richard Branson’s
favourable rating as a business leader helped Virgin diversify from records to air travel, personal finance
and drinks)
• Since SP has the potential to change customer behaviour it is a powerful double-
edged weapon
• Some agencies do not handle promotions of products such as tobacco, liquor,
lotteries as they see it as detrimental to social interests
• What if things go wrong ? Hoover’s ‘free fights’ promotions? (p.157, case study 37)
 Sales Promotion & PR
Key Points-Summary
• Customer is smart, is aware of all facets of marketing and sales promotions
• Promotional offers must meet the six Cs needs of the customer, match the
preferred buying process and fulfill the brand promise
• Research should precede sales promotion to understand the customer’s
psyche and make the campaign successful
• SP is the key decider in situations where there is no human contact at the
point of decision making
• SP must match the customer’s preferred communication canvas
• It should be genuine and ethical and complement the brand

Winning SPs = Offer something extra + add value + deliver real benefit to customers

Winning SPs offer something extra, add value and deliver

benefits to the customer and importantly promote
responsible behaviour and ethical norms