Unit 2 Lesson 5 Sales Promotion Product Powerpoint

Role (Explain):
Promotion is communication: (Explain)
Types of communication (define)
◦ Inform
◦ Persuade
◦ Remind
◦ Define Sender, Encoding, message channel,
decode, receiver.
◦ Interpersonal
◦ mass
 Usually
involves short term
 Offers some type of incentive to
make a purchase.
 Can be successfully used in all
channels of distribution.
Types of Promotions
◦ Slotting Allowances
◦ Buying Allowances
◦ Trade Shows and
◦ Sales Incentives
Consumer Sales
◦ Licensing
◦ Promotional Tie-Ins
◦ Visual
Merchandising and
◦ Premiums &
◦ Product Samples
3. Sales Promotion - All marketing activities,
other than personal selling, advertising, and
publicity, that are used to stimulate consumer
purchasing and sales effectiveness.
Objectives of Sales Promotion
◦ Increase sales
◦ Inform customers about new products
◦ Create a positive store or corporate image
3 Characteristics
◦ Short term activities
◦ Offers some type of incentive
◦ Can be successfully used in all channels of distribution
Sales promotion can be either consumer or trade oriented
Trade Promotions - sales promotion activities designed to
gain manufacturers’, wholesalers’, and retailers’ support for
a product. More money is spent on promoting to businesses
than to consumers.
◦ 1. Slotting allowances - a cash premium paid by the
manufacture to a retail chain for the costs involved in
placing a new product on its shelves.
◦ 2. Buying allowances - special price discount given by
manufacturers to wholesalers and retailers to encourage
them to either buy a product or buy a larger quantity.
◦ 3. Trade Shows and Conventions - designed to reach
◦ 4. Sales incentives - awards given managers and
employees who successfully meet or exceed their
company’s set sales quota.
Consumer Sales Promotions - designed to
encourage customers to buy a product.
◦ 1. Licensing - Organizations, such as manufactures, movie
makers, sports teams, and celebrities, may license for a fee
their logo, trademark, trade characters, names and
likenesses, or personal endorsements to a business to be
used in promoting the business’s products.
◦ 2. Promotional tie-ins - involve sales promotional
arrangements between one or more retailers or
manufacturers. They combine their resources (advertising
and sales promotional activities) to do a promotion that
creates additional sales for each partner.
◦ 3. Visual Merchandising and Displays ◦ Visual Merchandising - the coordination of all physical elements
in a place of business so that it projects the right image to its
◦ Displays - visual and artistic aspects of presenting a product to a
target group of customers.
◦ 4. Premium and Incentives - most popular and frequently used
sales promotion type
◦ Premiums - low cost items given away free to consumers as a
condition of purchase.
Coupons - certificates given to customers entitling cash discounts
Factory Packs (in-packs)- free gifts placed in product packages
Traffic Builders - low cost premiums like key chains, pens
Coupon Plans - ongoing programs in exchange for labels, coupons, or
other tokens from one or more purchases
◦ Incentives - higher-priced products given in contests or
◦ 5. Product Samples - free trial size of a product that is sent
through the mail, distributed door-to-door, or through retail
stores and trade shows
Advantages of Sales Promotions
◦ Unique and has special appeal to a potential customer
◦ Helps build customer loyalty
Disadvantages of Sales Promotions
◦ Difficult to end without the customers becoming
◦ Store image and sales can suffer if the promotion is not
properly planned and managed
◦ Only designed to supplement other promotional efforts and
cannot make up for poor products
May be targeted at the trade or
ultimate consumer; Makes use of a
variety of formats: premiums, coupons,
contests, etc.; Attracts attention, offers
strong purchase incentives, dramatizes
offers, boosts sagging sales;
Stimulates quick response; Short-lived;
Not effective at building long-term
brand preferences
Sales promotion - promotional activities
other than advertising, personal selling, or
publicity, which stimulate purchases.
Ex’s: Displays, Fashion Shows, Coupons, Free
Samples, Contests, Novelty Items, Trade
Shows, Demonstrations, Exhibits
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