BA230 Sales Promotion 14_15

Sales Promotion
Sales promotions are marketing communications
activities that stimulate short term behavioral
responses from consumers, the trade (reseller
support), or the company’s own sales force in order
to encourage the trade and/or end customer to
purchase or to take other relevant action by affecting
the perceived value of the product being promoted.
Sales promotions are short-term incentives
designed to stimulate purchase among consumers
or trade.
Sales Promotion
Reasons to buy...
Sales Promotion
Incentives to buy...
Objectives of Sales Promotion
Increasing volume
Encouraging trial
Increase repeat purchase
Increasing frequency and amount of use
Widening use
Increasing loyalty
Reward loyal customers
Extending usage
Creating awareness and interest
Gaining intermediary support
Deflecting attention from price
Emphasizing price
Discriminating among users
Supporting database enhancement
Concepts mixed with sales prom.
• Merchandising: Range
of sales promotions
activities intended to
ensure that products are
easily available;
prominently and
attractively displayed at
point of sale.
• Point of Purchase (Sale)-P.O.P:
Marcom activities that take place where
products are bought and sold.
Reasons for Rapid Growth of Sales
• Growing power of retailers
• Declining more brand loyalty
• Increasing promotional sensitivity
• Brand proliferation/similarity
• Price sensitivity
• Fragmentation of consumer market
• The short term focus of many marketing plans and reward
• Use of sales promotion to gain or maintain a competitive
• The increasing problem of advertising clutter and the need
to use consumer promotions as a way of atrracting
attention and interest to advertising
Sales Promotion Activities
1. Consumer sales promotions
2. Trade sales promotions
3. Employee/Salesforce sales
Consumer focused sales
promotions activities
Bonus Packs
Banded Packs
Prize promotions
Tie-in promotions
Cause-related sales promotions
Merchandising/P.O.P displays/demonstrations
Information leaflets/packs and catalogues
“Loyalty” schemes
Free trials
Consumer focused sales
promotions activities
Sampling: Offer of a free
trial amount (size) of a
product or service.
– Door-to-door sampling
– Sampling through the mail
– In-store sampling
– On-package
– Inserts in magazines and
Consumer focused sales
promotions activities
Consumer focused sales
promotions activities
Free trials: Inviting prospects to try the
product free in the hope that they will buy
the product.
Consumer focused sales
promotions activities
Free trials
Consumer focused sales
promotions activities
Couponing: Certificates offering a stated
saving on the purchase of a specific
– Media delivery in newspapers and
magazines and as freestanding inserts
– through direct mail
– In-stores and at points of purchase
– In or on packages
Consumer focused sales
promotions activities
Premiums: Include free goods and
services such as extra item of the
product being purchased, a free item
of some other product or service such
as entry into a leisure park.
– Two for one
– “buy one get one free” etc.
Consumer focused sales
promotions activities
Displays and
demonstrations that take
place at the point of
purchase or sale
Consumer focused sales
promotions activities
• Information
leaflets/packs and
Consumer focused sales
promotions activities
Prize promotions: Prizes offer consumer to
chance, to win cash, trips or mechandise as a
result of purchasing something.
A contest calls for consumer to submit an entry
to be examined by judges who will select the
best entries.
A sweepstakes asks consumer to submit their
names for a drawing.
A game presents consumer with sth. Everytime
they buy- bingo numbers, missing letters- that
might help them win a prize.
Consumer focused sales
promotions activities
• Prize promotions:
Consumer focused sales
promotions activities
• On pack, immediate price
• Money-off voucher, immediate
price reduction
• Money-off voucher for next
• Money-off voucher for other
• Computer-generated
immediate price reduction
• Computer-generated
Consumer focused sales
promotions activities
Bonus Packs: Include an extra quantity
of the product in the pack for no extra
price increase.
Banded Packs: Multi-packs of the same
product, or more than one product
“banded” together for an inclusive
Bonus Packs
Banded Packs
Consumer focused sales
promotions activities
Tie-in promotions: Two or more
brands or companies team up
McDonald’s and Disney
McDonald’s and Toys’R’us
Consumer focused sales
promotions activities
“Loyalty” schemes: It aims to encourage
customers to purchase more item from, or
make more use of, the organization of which
they are “members”.
Trade focused sales promotions
Trade promotions are the
expenditures or incentives
used by manufecturers and
other members of marketing
channel to help push
products through to retailers.
They are aimed at retailers,
disributors, wholesalers, brokers,
and agents.
Trade focused sales
promotions activities
Trade allowances:
Discount/price reductions
Additional free products
Special terms
Target pay-backs
Trade contests and incentives:
Cooperative advertising (and vendor
support programs)
P.O.P materials and merchandising
Gifts and free merchandise
Information leaflets/packs and catalogues
Training programs, trade shows
Objectives of Trade Promotions
• Obtain initial distribution
• Obtain prime retail shelf space or location
• Support established brands
• Counter competitive actions
• Increase order size
• Build retail inventories
• Reduce excess manufacturer inventories
• Enhance channel relationships
• Enhance the IMC program
Trade focused sales
promotions activities
• P.O.P
Business and Sales force Sales
Promotion activities
• Trade Shows and Conventions
• Sales contests
• Specialty advertising (calender, deskoffice accessories etc.)
Objectives of Sales force
(Employee) Promotion
• Stimulate sales force motivation for new, improved or existing
• Provide extra “assistance” for sales staff e.g. Create extra sales
promotion materials for their use
• Encourage meeting of sales targets
• Help in the management of customer debt, e.g. Reduction of
overdue debts
• Encourage sales staff to generate leads
• Improve the quality of leads/qualified leads
• Encourage non-sales staff to generate leads
• Encourage all staff to improve customer contact and relations
• Complement other marketing communications “push” activities.
Sales Promotion Mechanics
Does the mechanic involve a task that is too
much trouble?
Will the mechanics be embarrassing or
personally intrusive?
Will the customer understand all the rules?
Should the mechanics be immediate or
Is the mechanics restricted by law?
Does the offer look too good to be true?
Steps in Sales Promotion
Program Development
Establish objectives
Select consumer-promotion tools
Select trade-promotion tools
Select sales force promotion tools
Develop the program
– Decide on the size of the incentive
– Set conditions for participation
– Determine how to promote and distribute the
Promotion Program
– Determine the length of the Program
• Pretest the program
• Implement and evaluate the program
Sales Promotion
• Provides extra incentive
to purchase product
• Way to appeal to price
sensitive consumer
• Can generate extra
interest in ads
• Easier to measure efforts
• Has short term impact
• Can be abused
• Can lead to promotional
• Often does not
contribute to brand
Find specific examples of three types of sales promotion in
the current market:
• Consumer sales promotions
• Trade sales promotions
• Employee/Salesforce sales promotions
Find one examples from each category by contacting
retailers, disributors, wholesalers, brokers, agents, sales staff and
employees of the companies and explain the techniques that they
use in order to stimulate short term behavioral responses from
consumers, the trade (reseller support), or the company’s own
sales force.
Your assignment is to take pictures of different and diverse
promotions in every category and to write a report in order to
explain the promotional tecniques, used by different companies.
Any example from the Internet is not accepted.
Deadline: 30 December 2014