Sales Promotion in Marketing

Sales Promotion

SALES PROMOTION• Sales promotion Marketing activities other than personal selling, advertising, and publicity that enhance consumer purchasing and dealer effectiveness.

• Goal is speeding the sales process and increasing sales volume.

• Produce best results when combined with other other marketing activities, such as advertising.

• Cannot overcome poor brand images, product deficiencies, or poor training for salespeople.

CONSUMER-ORIENTED SALES PROMOTIONS

• Goals: Encourage repurchases by rewarding current users, boost sales of complementary products, and increase impulse purchases.

• Coupons: most widely used form of sales promotion.

• Refunds Or Rebates: help packaged-goods companies increase purchase rates, promote multiple purchases, and reward product users.

• Samples, Bonus Packs, And Premiums: a “try it, you’ll like it” approach.

• Contests: require entrants to complete a task such as solving a puzzle or answering questions in a trivia quiz.

• Sweepstakes: choose winners by chance; no product purchase is necessary.

• Specialty Advertising: sales promotion technique that places the advertiser’s name, address, and advertising message on useful articles that are then distributed to target consumers.

TRADE-ORIENTED PROMOTIONS

• Sales promotion that appeals to marketing intermediaries rather than to final consumers.

• Accounts for half of typical firm’s promotion budget.

• Trade allowances—special financial incentives offered to wholesalers and retailers that purchase or promote specific products.

• Point-of-purchase advertising—display or other promotion located near the site of the actual buying decision.

• Trade shows—vendors who serve the industries display and demonstrate their products for members.

• Dealer incentives, contests, and training programs.

Sales Promotion

ConsumerSales Promotion

Trade Sales Promotion

Consumer market

Marketing channel

Drive immediate purchaseInfluence behavior Goal

The Objectives of Sales Promotion

LO1

Objectives of Sales Promotion

Type of Buyer

Loyal Customers

Competitor’sCustomers

Brand Switchers

Price Buyers

Desired Results

•Reinforce behavior• Increase consumption•Change purchase timing

•Break loyalty•Persuade to switch

•Persuade to buy your brand more often

•Appeal with low prices

•Supply added value

Sales PromotionExamples

•Loyalty marketing•Bonus packs

•Sampling•Sweepstakes, contests, premiums

•Price-lowering promotion

•Trade deals

•Coupons, price-offpackages, refunds

•Trade deals

Tools for Consumer Sales Promotion

Coupons and Rebates

Premiums

Loyalty Marketing Programs

Contests & Sweepstakes

Sampling

Point-of-Purchase Promotion


Coupon

Rebate

Premium

A certificate that entitles consumers to an immediate

price reduction.

A cash refund given for the purchase of a product during

a specific period.

An extra item offered to the consumer, usually in exchange

for some proof of purchase.


LoyaltyMarketingProgram

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

FrequentBuyer

Program

A loyalty program in which loyal consumers are rewarded for making multiple purchases.


Contests Promotions that require skill or ability to compete for prizes.

Sweepstakes Promotions that depend on chance or luck, with free participation.


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

Methods of Sampling

Direct mail

Door-to-door delivery

Packaging with another product

Retail store demonstration

B2B -- Trade Sales PromotionTrade Allowances

Push Money

Training

Free Merchandise

Store Demonstration

Conventions & Trade Shows

Trade Allowance

TradeAllowance

A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.

Push Money

Push MoneyMoney offered to channel intermediaries to encourage them to “push” products--that is, to encourage other members of the channel to sell the products.

E.g. Nike gives bonus to sales staff of retailers for meeting quotas

Benefits of Trade Promotions

Help manufacturers gain new distribution

Obtain wholesaler and retailer support forconsumer sales promotions

Build or reduce dealer inventories

Improve trade relations

Forms of Trade Sales Promotion

Kiosk Marketing• Information and ordering machines called kiosks (in contrast to vending

machines which dispense actual products) are used heavily in recent years at airports, stores and other locations.

• Kiosks at Hilton hotels help customers to see their reservations, get room keys, view pre-arrival messages, check in and out.

• Kiosks can read customer data from encoded registration badges and produce useful data that can be printed.

• Kiosks can give people information about the current schemes and sales promotion

Education

Sales Promotion in Marketing