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Planning,
Forecasting
& Budgeting
Warehousing
and Logistics
Sales Force
Management
Elements of
Distribution
Management
Channel
Information
Systems
Product
Pricing and
Promotion
SALES PROMOTION - 1
MKT 405: Distribution Management
M Wahidul Islam
Summer 2015
Distribution
Channels
Product
Visibility
BENEFITS OF SALES PROMOTION
MANUFACTURERS
WHAT IS SALES PROMOTION?
 “Sales
Promotion, a key ingredient in
marketing campaigns, consist of a diverse
collection of incentive tools, mostly shortterm, designed to stimulate quicker or
greater purchase of particular products or
services by consumers or the trade”
Philip Kotler

Price differentiation

Trial

Increase in sales

Build a database

Easy to design and implement and less-expensive

Useful for small player
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BENEFITS OF SALES PROMOTION
CONSUMERS

Loyals vs Switchers
DRAWBACKS OF SALES PROMOTION

Manufacturers



Price sensitive customers

BENEFITS OF SALES PROMOTION
TRADERS


New product introduction
Sampling
 Coupons
 Premiums (gifts)
 Contests & Sweepstakes (or Prizes)
 Refunds and rebates
 Price-offs
 Bonus packs
 Frequency programs
 Event marketing
 Point-of-Purchase
Confusion
Traders


Increased sales traffic
DIFFERENT CONSUMER PROMOTIONS
Consumer


Reduction in brand value
Dilution in quality image
Price-sensitivity
Increased competition
SAMPLING

In-store distribution

Direct sampling





Only respondents get the free
sample
Media sampling

Selective
sampling
Direct
sampling
Sampling
Sample is included in the media
outlet
Selective sampling

In-store
distribut
ion
Delivered to a mailing address
(home / office)
Response sampling


Direct from retail store
Samples are distributed at a site
/ event /
Media
sampling
Response
sampling
Sampling is one of the most expensive ways of consumer promotion as
there is no guarantee that it will lead to a future purchase.
However, most effective for launching a new product.
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COUPONS – A PRICE REDUCTION OFFER



When competitors products are
scanned, a coupon is given

Instant
redemptio
n coupon
Response
offer
coupons
Coupon for one product places
inside another (bundling)
Coupons
Bounce –
back
coupons
Response offer coupons

Issued on request of a customer
OTHERS

Contests


Consumer buy the product
Sweepstakes

Free in the mail premiums

Self liquidating premiums


Scanner
–
delivered
coupons
Can be difficult to manage.
Brands that are readily recalled by consumer, face value of the coupon,
the ease of distribution method and flexibility are key point in successful
promotion planning using coupons.
Participants do not require to buy the products
Small gift inside / strapped on the package


Crossruff
coupons
In or On package premiums

Cross-ruff coupons


Coupons are placed inside
packages so that consumers are
encouraged for repeat purchase
Scanner – delivered coupons


Can immediately redeem the
coupon while making the
purchase
Bounce – back coupons


PREMIUMS / GIFTS
Instant redemption coupon
After proof of purchase are received by the manufacturer
Consumers pays the cost for the gift and the handling as
well
Store or manufacturer premiums

Given by manufacturer or retailer when the customer buys
the product
Have high cost, but can add value to the product / brand.
They can attract new customers and thank the existing customers.
REFERENCES

Chapter 17 – Sales Promotion
 Havaldar K. and Cavale V. M. (2011) Sales and
Distribution Management – Text and Cases (2nd Edition)
Delhi: Tata McGraw-Hill Education Private Limited
Refunds and Rebates
 Price-offs
 Bonus packs
 Frequency and loyalty programs
 Event marketing and Event Sponsorship
 Point-of-Purpose


Includes posters, danglers, banners, stand-up racks, brand
logos, products dispensers
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END
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