Sales Promotion

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Sales Promotional Techniques

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SALES PROMOTION

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COPYRIGHT © 2006 by Nelson, a division of Thomson Canada Limited. All rights reserved

Sales Promotion Learning Objectives
1. Define and state the objectives of sales promotion 2. Discuss the most common forms of consumer sales promotion 3. List the most common forms of trade sales promotion .

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What is Sales Promotion ?

Sales Promotion consists of short-term incentives to encourage the purchase or sales of a product.

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Sales Promotion
“Sales Promotion is a Marketing Discipline that Utilizes a Variety of Incentive Techniques to Structure Sales-Related Programs Targeted to Consumers, Trade, and/or Sales Levels that Generate a Specific, Measurable Action or Response for a Product or Service.”

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Scope of Sales Promotion
Growing power of retailers, declining brand loyalty, increased promotional sensitivity, brand proliferation, fragmentation of the consumer market, the short-term focus of many marketers, increased accountability, competition etc have led to the increase in the importance of sales promotion and the shift in media advertising to consumer and trade promotions.
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Scope of Sales Promotion
Exposure Attention Comprehension Attitudinal change Behaviour/Action

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Role of Sales Promotion
Increases Trial and Repurchases Increases the frequency or quantity of purchase Countering Competitive Offers Building Customer Databases & Customer Retention Cross-Selling and Extending the use of brands Reinforcing the Brand Image & Strengthening Brand Relationships
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Objectives of Sales Promotion
1.To Introduce New Products 2.To Attract New Customers

3.To Induce Present customers to buy more
4.To Help firm remain competitive 5.To Increase sales in Off season 6.To Increase Inventories of Business buyers 7.Encourage brand loyalty
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Objectives of Sales Promotion
8.To Educate Customers 9.To Stimulate Sales

10.To Facilitate Co-ordination

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Objectives of Sales Promotion
Type of Buyer Desired Results Sales Promotion Examples

Loyal Customers
Competitor’s Customers Brand Switchers

•Reinforce behavior •Loyalty marketing •Increase consumption •Bonus packs •Change timing •Break loyalty •Persuade to switch •Persuade to buy your brand more often •Appeal with low prices •Supply added value •Sampling •Sweepstakes, contests, premiums

•Price-lowering promotion •Trade deals
•Coupons, price-off packages, refunds •Trade deals

Price Buyers

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Sales Promotion Techniques

Consumer Sales Promotion

Trade Sales Promotion

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Consumer promotion
Stimulate purchase Induce trial Create new users Increase repurchase from occasional customers Reward loyal customers

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Trade promotion
Liquidating heavy inventories Persuade retailers to carry stock, carry more than usual stock, promote brand franchise

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Tools for Consumer Sales Promotion
Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion

On-line Sales Promotion
COPYRIGHT © 2006 by Nelson, a division of Thomson Canada Limited. All rights reserved

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Coupons, Rebates, Premiums
Coupon Rebate
A certificate that entitles consumers to an immediate price reduction. A cash refund given for the purchase of a product during a specific product. An extra item offered to the consumer, usually in exchange for some proof of purchase.

Premium

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Loyalty Marketing Programs

Loyalty Marketing Program

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

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Contests, Sweepstakes
Promotions that require skill or ability to compete for prizes. Promotions that depend on chance or luck, with free participation.

Contest

Sweepstakes

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Contests and Sweepstakes
Contests Sweepstakes

Compete for a Prize Based On Some Skill or Ability

Participants Submit Names To Be Included in Drawing

Generates High Degree Of Consumer Involvement

Can Help Revive Lagging Sales

Game – Type of Sweepstakes; Time Frame Much Longer
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Sampling
Allowing the Customer to Experience the Product or Service.
Very Effective Strategy for Introducing A New or Modified Product. 9 Out of 10 Customers Prefer a Sample to a Cents-Off Coupon to Introduce Product.

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

Direct mail

Methods of Sampling

Door-to-door delivery Packaging with another product Retail store demonstration
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Point-of-Purchase Promotion

Build traffic

Advertise the product
Goals of Point-of-Purchase Displays

Induce impulse buying
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Point-of-Purchase Displays
Display Distributed to Retailers Used to Call Customer’s Attention to Product Promotions.

Some of the Most Popular POP Tools & Techniques
Carton Displays Special Racks Banners Signs Price Cards
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On-line Sales Promotion
Free merchandise

Effective Types of On-Line Sales Promotion

Sweepstakes Free shipping Coupons

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Tools for Trade Sales Promotion
Trade allowances
Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows
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Trade Allowance
A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.

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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.

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Training
Training would be provided for
the employees of distributors, wholesalers, retailers.

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Free Merchandise
To stimulate and encourage the middle men to take up the new ventures, free merchandise techniques are used

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Trade Promotions
Retailer (Dealer) Kits
Materials That Help Reps Make Sales Calls Are Often Designed as Kits. Contain Detailed Product Specs, How-to-Do it Display, etc. Contests & Sweepstakes Advertisers Can Develop Contests & Sweepstakes to Motivate Resellers. Occasional Use Only is Effective.
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Trade Shows & Exhibits
Allow Product Demonstrations, Provide Information, & Answer Questions.

Specialty Advertising
Build Brands; Creating Both Awareness and Reminders

Includes Everything From Hats With Logos to T-shirts, & Mouse pads

Third Largest Category of Promotional Spending

Normally Have a Promotional Message Printed Somewhere
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Consumer sales promotion
Consumer sales promotion techniques Price deal: A temporary reduction in the price, such as happy hour Loyal Reward Program: Consumers collect points, miles, or credits for purchases and redeem them for rewards. Two famous examples are Pepsi Stuff and AAdvantage. Cents-off deal: Offers a brand at a lower price. Price reduction may be a percentage marked on the package. Price-pack deal: The packaging offers a consumer a certain percentage more of the product for the same price (for example, 25 percent extra). Coupons: coupons have become a standard mechanism for sales promotions. Loss leader: the price of a popular product is temporarily reduced in order to stimulate other profitable sales Free-standing insert (FSI): A coupon booklet is inserted into the local newspaper for delivery. On-shelf couponing: Coupons are present at the shelf where the product is available. Checkout dispensers: On checkout the customer is given a coupon based on products purchased.
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Consumer sales promotion
On-line couponing: Coupons are available on line. Consumers print them out and take them to the store. Mobile couponing: Coupons are available on a mobile phone. Consumers show the offer on a mobile phone to a salesperson for redemption. Online interactive promotion game: Consumers play an interactive game associated with the promoted product. See an example of the Interactive Internet Ad for tomato ketchup. Rebates: Consumers are offered money back if the receipt and barcode are mailed to the producer. Contests/sweepstakes/games: The consumer is automatically entered into the event by purchasing the product.

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Consumer sales promotion
Point-of-sale displays:Aisle interrupter: A sign that juts into the aisle from the shelf. Dangler: A sign that sways when a consumer walks by it. Dump bin: A bin full of products dumped inside. Glorifier: A small stage that elevates a product above other products. Wobbler: A sign that jiggles. Lipstick Board: A board on which messages are written in crayon. Necker: A coupon placed on the 'neck' of a bottle. YES unit: "your extra salesperson" is a pull-out fact sheet.

Kids eat free specials: Offers a discount on the total dining bill by offering 1 free kids meal with each regular meal purchased.

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Trade sales promotions
Trade sales promotion techniques Trade allowances: short term incentive offered to induce a retailer to stock up on a product. Dealer loader: An incentive given to induce a retailer to purchase and display a product. Trade contest: A contest to reward retailers that sell the most product. Point-of-purchase displays: Extra sales tools given to retailers to boost sales. Training programs: dealer employees are trained in selling the product. Push money: also known as "spiffs". An extra commission paid to retail employees to push products. Trade discounts (also called functional discounts): These are payments to distribution channel members for performing some function .

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