Sales Promotion

Sales promotion
• By definition, sales promotion (or simply promotion) refers to any
incentive manufacturers, retailers, and even not-for-profit
organizations use that serve to change a brand’s perceived price or
value temporarily.
• Manufacturers use promotions to induce the trade (wholesalers and
retailers) or consumers to buy a brand and to encourage the
manufacturer’s sales force to sell it aggressively
Why increased emphasis on trade promotions
• Shift in manufacturer versus retailer balance of power
• Increased brand parity and price sensitivity
• Reduced brand loyalty
• Mass market and reduced media effectiveness
• Emphasis on short-term results in corporate reward structures
• Responsive consumers
Sales Promotions Can
• Stimulate sales force enthusiasm
• Renew sales of a mature brand
• Facilitate the introduction of new products to the trade
• Increase on- and off-shelf merchandising space
• Neutralize competitive advertising and sales promotion
• Obtain trial purchases from consumers
• Hold current users by encouraging repeat purchases
• Increase product usage by loading consumers
• Reinforce advertising
Sales Promotions Cannot
• Compensate for a poorly trained sales force
• Give the trade or consumers any compelling long-term reason to
continue purchasing a brand
• Permanently stop an established brand’ s declining sales trend
• Change the basic non acceptance of an undesired product
Major form of trade allowance

• Off-invoice allowances,
• Bill-back allowances
• Slotting allowances
Problem :

• Forward Buying
• Diverting
• Undercutting
Consumer promotion
• Sampling
• Couponing
• Premiums
• Free with purchase
• Offers in Mail/email
• Price off
• Games
• Loyalty schemes
• Contests
Trade versus consumer promotion