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Planning,
Forecasting
& Budgeting
Warehousing
and Logistics
Channel
Information
Systems
Sales Force
Management
Elements of
Distribution
Management
Product
Pricing and
Promotion
SALES PROMOTION - 2
MKT 405: Distribution Management
M Wahidul Islam
Summer 2015
Distribution
Channels
WHAT IS SALES PROMOTION?
TRADE PROMOTIONS
 “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
Directed towards the channel members OR
Resellers





Product
Visibility
Retailers
Wholesalers
Distributors
Dealers
Usually companies spend more money on Trade
Promotions than Consumer promotions
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TYPES OF TRADE PROMOTIONS
OBJECTIVES OF TRADE PROMOTION



Persuade the reseller to carry the company’s product
To encourage retailers to promote / support company’s
product
To encourage retailers to display company’s PoP
material

To get better shelf space

To stock and display new products

Cooperative
advertising
Training
programs
A major type of trade promotion
Resellers are offered financial incentives to
purchase, promote, display company’s products


Trade
Contests
TYPES OF TRADE PROMOTIONS
TRADE CONTESTS


Trade
Promotions
Trade
Shows
To make retailers and their sales staff more
interested to push the company’s products
TYPES OF TRADE PROMOTIONS
TRADE ALLOWANCES

Trade
Allowances
Monetary rewards given to resellers’ sales
persons for achieving sales goals
Also known as spiff money or push money
Different execution types

Off-invoice allowance
Slotting allowance

Promotional / Merchandizing allowance

Drop-ship allowance
Exit fees

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Can have negative impact on end customers as
sales persons may push the wrong product
New Product Placement
Advertising and sales support activities
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TYPES OF TRADE PROMOTIONS
TRAINING PROGRAMS & TRADE SHOWS
TYPES OF TRADE PROMOTIONS
COOPERATIVE ADVERTISING



Training Programs

Training for resellers to know more about the
product’s features, benefits and USPs

Can be conducted in separate venue or during the
sales person’s visit
Trade Shows

Trade show / trade fair / exhibitions a useful way of
showcasing the product

Cost of advertising is shared by two or more
organizations
Three types

Horizontal Cooperative Advertising

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Vertical Cooperative Advertising

Ingredient-sponsored Cooperative Advertising


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Can convey products benefits to resellers as well as
end customers as well
Group of retailers providing similar products sponsor a
common campaign
Company and retailer together run a campaign
Manufacturers of raw materials and component parts help
successful promotion of the end product to the customer.
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
END
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