Sales Promotion

PRESENTED TO: PRESENTED BY:

Ms. TAMANNA ANAND PRASHANT
SHARMA

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The Retail Promotion Mix

Promotion
is a means that retailers use to bring traffic into their
stores, and it includes advertising, sales promotion,
publicity, and personal selling.

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Types of Promotion

The four basic components of the retailer’s

promotional mix:
Advertising
is paid, nonpersonal communication through various
media by business firms, nonprofit organizations, and
individuals who are in some way identified in the
advertising message and who hope to inform or
persuade members of a particular audience; includes
communication of products, services, institutions, and
ideas.

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Types of Promotion

Sales Promotion involves the use of media and non-

media marketing pressure applied for a predetermined,
limited period of time as the level of consumer, retailer,
or wholesaler in order to stimulate trial, increase
consumer demand, or improve product availability.
Publicity is non-paid-for communications of
information about the company or product, generally
in some media form.
Personal Selling involves a face-to-face interaction
with the consumer with the goal of selling the
consumer merchandise or service.

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Types of Promotion

Promotional decisions relate to and most be

integrated with other management decisions, such as
location, merchandise, credit, cash flow, building,
price and customer service.
Primary Trading Area is the geographical area where
the retailer can serve customers, in terms of
convenience and accessibility, better than the
competition.
Secondary Trading Area is the geographic area
where the retailer can still be competitive despite a
competitor having some locational advantage.

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Promotion in the Supply Chain

Major differences in the way retailers and

manufacturers use promotion:
Product image versus availability.
Specific product benefits versus price.
Focused image versus cluttered ads.

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Promotional Objectives

Long-Term Objectives
Short-Term Objectives

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Long-Term Objectives

Institutional Advertising
is a type of advertising in which the retailer attempts to
gain long-term benefits by promoting and selling the
store itself rather than the merchandise in the store.
Creating a positive store image.
Public service promotion.

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Corporate Citizenship

 Wal-Mart sponsors a
variety of community
and public service
programs, which help to
promote its role as a
good corporate citizen.

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Possible Promotion Objectives in Retailing

Improve Long-Run Improve Short-Run

Performance Performance

Store Image Public Increase

Attract
and Positioning Service Patronage of
New
Existing
Customers
Customers

From Existing Expand

Trade Area Trade Area

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Short-Term Objectives

Promotional advertising
is a type of advertising in which the retailer attempts to
increase short-term performance by using product
availability or price as a selling point.
Attraction of new customers.

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Selecting Advertising Objectives

Factors unique to retailing that should be considered

when determining objectives:
Age of the store
Store location
Type of merchandise sold
The competition
The size of trading area
Supplier support

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Selecting Advertising Objectives

Make consumers in your trading area

aware that you offer the lowest prices...

Wal-Mart’s
“ Always Low Prices”

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Selecting Advertising Objectives

Make customers aware of your

large stock selection...

Nordstrom’s promising the shopper a

free shirt if the retailer is “out of stock”
on the basic sizes.

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Selecting Advertising Objectives

Making a specific target market aware of your

product offering...

JCPenney’s “At least part of you is

comfortable” campaign

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Selecting Advertising Objectives

Increase traffic during slow sales

periods...

Subway Sandwiches Shop’s “Two-for-One

Tuesdays”

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Selecting Advertising Objectives

Move old merchandise at the end

of of a selling season...

The “after-Christmas clearance sales”

that many retailers use.

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Selecting Advertising Objectives

Cultivate new customers...

Any of the one-day discounts that a

customer gets for opening a charge
account with the retailer.

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Budgeting for the Campaign:
Retailer-Only Campaigns

Affordable method is a technique for budgeting

advertising in which all the money a retailer can afford
to spend on advertising in a given time period
becomes the advertising budget.
Percentage-of-sales method is a technique for
budgeting advertising in which the retailer targets a
specific percentage of forecasted sales as the
advertising budget.

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Budgeting for the Campaign:
Retailer-Only Campaigns

Task-and-objective method
is a technique for budgeting in which the retailer
establishes its advertising objectives and then
determines the advertising tasks that need to be
performed to achieve those objectives.

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 Task and Objective Method
of Advertising Budget Development

Objective and Task Estimated Cost

Objective 1: Increase traffic during dull periods.

Task A: 15 full-page newspaper advertisements

to be spread over these dates:
February 2 - 16; June 8 - 23; October 4 - 18 $22,500

Task B: 240, 30-second radio spots split on two stations

and spread over these dates:
February 2 - 16; June 8 - 23; October 4 - 18 4,320

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Task and Objective Method
of Advertising Budget Development

Objective and Task Estimate d Cost

Objective 2: Build store’s reputation.

Task A: weekly 15-second institutional ads on

the 10PM television news every Saturday
and Sunday $20,800

Task B: one half-page newspaper ad per month in

the home living section of the local newspaper 9,500

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 Task and Objective Method
of Advertising Budget Development

Objective and Task Estimated Cost

Objective 3: Clear out end-of-month, slow-moving merchandise.

Task A: run a full-page newspaper ad on the last

Thursday of every month $18,000

Task B: run 3, 30-second television spots on the last

Thursday of every month 14,000

Total advertising budget $99,020

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Co-Op Campaigns

 Vertical Cooperative Advertising occurs when the

retailer and other channel members (usually
manufacturers) share the advertising budget. Usually
the manufacturer subsidizes some of the retailer’s
advertising that features the manufacturer’s brands.
 Horizontal Cooperative Advertising occurs when two
or more retailers band together to share the cost of
advertising usually in the form of a joint promotion of
an event or sale that would benefit both parties.

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Designing the Message

 Creative messages cannot be developed without

knowing which media will be used to carry out the
message to the target market.
 Some Common Approaches:
 Lifestyle
 Fantasy
 Humorous
 Slice-of-life
 Mood/Image

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Media Alternatives

Mass Media aimed at total markets:

Newspapers
Television
Specific market media forms:
Radio
Magazines
Direct mail
Internet

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Media Selection

Coverage is the theoretical maximum number of

consumers in the retailer’s target market that can be
reached by a medium and not the number actually
reached.
Reach is the actual total number of target customers
who come in contact with an advertising message.
Cumulative Reach is the reach that is achieved over
a period of time.

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Media Selection

Frequency is the average number of times each

person who is reached is exposed to an advertisement
during a given time period.
Cost Per Thousand Method (CPM) is a technique
used to evaluate advertisements in different media
based on cost. The cost per thousand is the cost of
the advertisement divided by the number of people
viewing it, which is then multiplied by 1,000.

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Media Selection

Cost Per Thousand – Target Market (CPM-TM) is a

technique used to evaluate advertisements in different
media based on cost. The cost per thousand per target
market is the cost of the advertisement divided by the
number of people in the target market viewing it, which
is then multiplied by 1,000.
Impact refers to how strong an impression an
advertisement makes and how well it ultimately leads
to a purchase.

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Scheduling of Advertising

Ads should appear on, or slightly precede, the days when

customers are most likely to purchase.
Advertising should be concentrated around times when people
receive their payroll checks.
If the retailer has limited funds, it should concentrate its
advertising during periods of highest demand.
The retailer should time its ads to appear during the time of day
or day of week when the best CPM-TM will be obtained.
The higher the degree of habitual purchasing of a product class,
the more the advertising should precede the purchase time.

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Management of Sales Promotions and Publicity

Types of Sales Promotion

Evaluating Sales Promotions
Publicity Management

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 Types of Sales Promotion

Sales Promotions

Sole Sponsored Joint Sponsored

Contest and Frequent -

Premiums Sweepstakes Buyer
Programs

In-Store Demonstrations
Coupons
Displays and Sampling

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Types of Sales Promotions

Sole-Sponsored Sales Promotions are sales promotions that the

expense to the retailer may or may not be shared with others.
Premiums are extra items offered to the customer when
purchasing promoted products.
Contests and Sweepstakes are sales promotion techniques in
which customers have a chance of winning a special prize based
on entering a contest in which the entrant competes with others,
or a sweepstakes in which all entrants have an equal chance of
winning a prize.
Loyalty Programs are a form of sales promotion program in
which buyers are rewarded with special rewards, which other
shoppers are not offered, for purchasing often from the retailer.

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Types of Sales Promotions

Jointly Sponsored Sales Promotions offers retailer

the advantage of using “other people’s money” (OPM).
Coupons are a sales promotion toll in which the
shopper is offered a price discount on a specific item
if the retailer is presented with the appropriate coupon
at time of purchase.
In-Store Displays are promotional fixtures of displays
that seek to generate traffic, highlight individual items,
and encourage impulse buying.
Demonstrations and Sampling are in-store
presentations with the intent of reducing the
consumer’s perceived risk of purchasing a product.

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Types of Sales Promotions

Jointly Sponsored Sales Promotions:

Best Buy coordinates promotional efforts with

manufacturers to provide consumers price savings
through rebates.
Pizza Hut’s premium offer of a 6 song custom made
CD stimulated sales of its New Yorker Pizza when first
introduced.

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Eight Most Popular Types of
Joint-Sponsored Sales Promotions

Coupons in retailer ads 90%

Cents-off 90%
In-store coupons 88%
Refunds 85%
Electronic, in-store displays 83%
Samples of established products 78%
Premiums 75%
Sweepstakes 70%

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Evaluating Sales Promotions: What Sales
Promotions Can and Cannot Achieve

 Tasks That Sales Promotion Can Accomplish:

 Get consumers to try a new product
 Stimulate the sales of products
 Neutralize competitive advertising and sales
promotions
 Encourage repeat usage by current users
 Reinforce advertising

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Evaluating Sales Promotions: What Sales
Promotions Can and Cannot Achieve

 Tasks That Sales Promotion Cannot Achieve:

 Change the basic non-acceptance of an undesired
product
 Compensate for a poorly trained sales force
 Give consumers a compelling reason to continue
purchasing a product over the long run
 Permanently stop an established product’s declining
sales trend

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Publicity Management

 When publicity is formally managed, it should be

integrated with other elements of the promotion mix.
 Advantages of publicity:
 Objective

 Credible

 Appeals to a mass audience

 Disadvantages of publicity:
 Difficult to control and time

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THANK YOU

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