Sales Promotion

Sales Promotion
Sales Promotion
Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase.
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Power Struggles and Sales Promotion

Sales promotion plays a key strategic role in the channel of distribution
Big name brands must be supported with sales promotion and POP to get the support of retailers through self space allocation. The top 10 retailers control 43% of all packaged goods sales so they can dictate which brands get how much shelf space.
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Why are sales promotions needed?

Can your Brand Communicate That it Values its Customers?

Consider Each Moment of Truth as a Brand Expression

Source: DAVIS S., LONGORIA T., Harmonising Your Touchpoints, Brand Packaging, Jan/Feb 2003

Moment of Truth - Experience

Advertising V/S Sales Promotion

The more the products quality and its advertising persuasiveness fail to meet competition, the greater is the need for promotion to improve the price value relationship

Advertising V/S Sales Promotioncontd

Advertising Reason to Buy Long Term Demand Encourage Brand Loyalty Encourage Repeat Purchases Promote Image Orientation Obtain Long term results Difficulty of Measurement Sales Promotion Incentive to buy Short Term Demand Encourage Brand Switch Induce Trial Use Promote Price Orientation Obtain immediate results Often Measurable
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Sales Promotion
Using incentives to create a perception of greater brand value
Consumer Market
Induce household consumers to purchase a firms brand

Trade-Market
Motivate distributors, wholesalers, and retailers to stock and feature a brand

Business Buyer
Cultivate buyers in large corporations who make purchase decisions

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SP spurs action because they are supposed to run for a limited time
While the advertising budgets are controlled by the brand managers, SP budgets usually are controlled by the sales managers

SP for Dog Food

Sales Promotion
Consumer Sales Promotion
Consumer market

Goal

Drive immediate purchase Influence behavior

Trade Sales Promotion

Marketing channel

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Objectives of Sales Promotion

Type of Buyer Desired Results Reinforce behavior Increase consumption Change purchase timing Break loyalty Persuade to switch Persuade to buy your brand more often Appeal with low prices Supply added value
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Sales Promotion Examples Loyalty marketing Bonus packs Sampling Sweepstakes, contests, premiums

Loyal Customers Competitors Customers Brand Switchers Price Buyers

Price-lowering promotion Trade deals

Coupons, price-off packages, refunds Trade deals

REVIEW LEARNING OUTCOME

The Objectives of Sales Promotion

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Tools for Consumer Sales Promotion

What are the most common forms of consumer sales promotion

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Sweepstakes

Loyalty Programs

Coupons

Samples Price Off Premium

Refunds Rebates Bonus Packs

Event Marketing

IMC Group Presentation Sales Promotion

Tools for Consumer Sales Promotion

Loyalty Marketing Program

A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers.

Frequent Buyer Program

A loyalty program in which loyal consumers are rewarded for making multiple purchases.

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Tools for Consumer Sales Promotion

Contests

Promotions that require skill or ability to compete for prizes.

Sweepstakes

Promotions that depend on chance or luck, with free participation.

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Tools for Consumer Sales Promotion

Sampling A promotional program that allows the consumer the opportunity to try a product or service for free.

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eCoupons from Pizza Hut

Competitive Sales Promotion Strategies Price Reduction.from P & G

Price Reduced by Rs. 18

Price Reduced by Rs. 20

Price Reduction..HUL reacts

Price Reduced by 22%

Superstar Photo Contest

Sweepstakes from

Log in at www.lufthansa.com and buy ticket

Fill up sweepstakes form Winner: Two tickets to any European destination

Money back Refund

MC Gold,Titanium and Platinum Cardholders :30% Moneyback Offer MC Standard Cardholders: 15% Moneyback
Jet, Kingfisher and IA

Something Extra

Free Sampling

Fast-food chains are well known for their instore premiums.

Click on image

2007 by Prentice Hall

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Methods of Sampling
Direct mail

Door-to-door delivery

Packaging with another product

Retail store demonstration

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Nirmal Coconut Oil Trial

8th to 13th June, 2012

Click

A total of 500 cars in 5 days!

Point-of-Purchase Promotion
Build traffic Advertise the product Induce impulse buying

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Case Study POP Promotion Mall Activation 2011

Communication Objective
The communication objective was to attract the TG of Dove & experience the Most recommended shampoo by Indian women.

Activity Details
Product: Dove Brand: Hindustan Unilever Limited Agency: Mindshare Fulcrum Locations: Mumbai, Delhi, Kolkata, Bangalore, Pune, Ahmedabad, Jaipur, Lucknow, Chennai, Hyderabad Duration: 2 Weekends 30th April to 1st May 2011 & 7th May to 8th May 2011 TG: Women in the age group of 18 to 35 yrs

Activity Concept
A Dove Experience Zone measuring 15 ft x 15ft was designed in order to be placed inside the domain of the Mall. The zone constituted two kiosks for Hair washing along with the backdrop of product. The basic idea was to attract the TG of Dove Shampoos, to get their hairwashed & blow-dried without any fear of hair damage & thus experience the most recommended shampoo by Indian women and thereby recommend it to others.

So the activity was all about Inviting women for free hair washing at the Dove Experience zone.
Activities inside the Experience Zone included:
Hair Washing & Conditioning Hair Drying Sampling of Dove Shampoo & Dove Gift Vouchers

Set-up Design
15 ft Backlit panel 2.5 ft dia

Side panel 2 x 6.5 ft Facia height 7 ft Facia Height 9 ft Checker panel 4 x 6 ft

Crew Members Attire

Set-up at the mall all set to unfold the exciting Dove Experience

Taking in registrations at the frontdesk for the hair-wash

Interacting with the incoming consumers and helping them with their queries

Product Sampling

Hair-wash given by hair-experts who also advised the consumers with tips to nurture their hair in a much better way

Post Hair-wash feedback session with the consumer enquiring them about the overall experience

Photo testimonial of the consumer with the gift-hamper after having done the hair-wash

Video testimonial provided by the consumer about with their valuable feedback on the Dove Experience

LO3

Trade Allowance
Trade Allowance

A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.

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Contest & Dealer Incentives

B2B Sector

Trade Allowance

Training Program

Point of Purchase Display

Trade Show
IMC Group Presentation Sales Promotion

Cooperative Advertising

LO3

Push Money
Money offered to channel intermediaries to encourage them to push products--that is, to encourage other members of the channel to sell the products.

Push Money

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Benefits of Trade Promotions

Help manufacturers gain new distribution Obtain wholesaler and retailer support for consumer sales promotions Build or reduce dealer inventories Improve trade relations
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LO3

REVIEW LEARNING OUTCOME

Forms of Trade Sales Promotion

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Final considerations
Dont promote if the product is not good Promotions rarely stop a declining sales curve It is very easy to lose the promotional gains made if your promotion has not been effective in retaining new customers. So the product has to speak for itself. The objective of the promotion is to wean away users from competition and create new users. Excessive promotions lead to diminishing returns and may devalue the brand

Contd
Promotions may be used in conjunction with advertising and other marketing communication tools It should be novel and attractive Ensure supply lines are good and adequate stock is available right through the promotion Cater for contingencies. Have escape routes built into the plan Trade has to be handled tactfully Reimburse incentives/ rewards/ gifts promptly Must be within the legal boundaries