Objectives Identify the characteristics of sales promotion Discuss the concept of trade promotion Identify the different types of consumer sales promotions Create sales promotion of our own for promotion project

Bell Ringer We’ve talked about several types of promotion. We explored advertising and publicity. What else can we do to attract customers to our product??? List examples that do not fall into either categories of advertising or publicity!!!

Another Element of the Promotional Mix Sales Promotion Another Element of the Promotional Mix

Sales Promotion Defined Sales Promotion- a short-term incentive offered to encourage buying a good or service Purpose: demand, therefore stimulating sales!!! Sales promotions can be directed at manufacturers, wholesalers, retailers, and consumers. Sales promos can also be directed toward a company’s employees, encouraging a sales force to sell products aggressively. Sales promotions are usually supported by advertising activities. Sales promos may be either business-to-business or business-to-consumer. Let’s take a closer look at each of those

Trade Promotion Sales promotion activities that are designed to gain manufacturers’, wholesalers’, and retailers’ support for a product More money is actually spent on promoting to businesses than to consumers. Major trade promotions include slotting allowances, buying allowances, trade shows and conventions, and sales incentives

Types of Trade Promotions Slotting Allowance-cash premium paid by the manufacturer to a retail chain for the costs involved in placing a new product on its shelves Buying Allowance- price discount given by manufacturers to wholesalers and retailers to encourage the purchase of a product Slotting Allowances can range from a few thousand dollars to more than $100,000 per product. In addition to buying space in the store, slotting allowances also pay for a retailer’s discount specials on a product, charges for store shelves, penalties for poor sales, and store advertising and display costs. Buying allowances are sometimes used to encourage buying a larger quantity of a product. The price discount results in more money for wholesalers and retailers for each sold product. They are more likely, therefore, to promote the product to customers.

Types of Trade Promotions Trade Shows and Conventions- designed to reach wholesalers and retailers Provide businesses with opportunities to introduce new products, encourage increased sales of existing products, and gain continued company and product support

Types of Trade Promotions Sales Incentives- awards given to managers and employees who successfully meet or exceed a sales quota Sales Incentives: Quotas can last for a specific period of time, such as a month, one-day sale, or a year, or for a particular product or line of products.

Consumer Sales Promotion Sales promotion efforts designed to encourage customers to buy a product Major consumer sales promotion devices include premiums, incentives, product samples, loyalty marketing programs, promotional tie-ins, product placement, and visual merchandising and displays. Let’s look at each of those…

Types of Consumer Sales Promotion Premiums- low-cost items given to consumers at a discount or for free Designed to increase sales by building product loyalty and attracting new customers and can also persuade non-users to switch brands EX: coupons, factory packs, traffic builders, and coupon plans People hopefully will become more motivated to buy a product when they are offered an “added value” gift in exchange. Remember: Premiums should be low cost Premiums should provide added value Premiums should aim to negate the targeted audience’s price issue Premiums should effectively differentiate the product from the competition. Premiums should create an immediate need to buy. Coupons are certificates which entitle customers to cash discounts on goods or services. Factory packs are free gifts placed in product packages, on product packages, or as a container premium. (EX: Prize in Cracker Jacks box) Traffic builders are low-cost premiums, such as pens, key chains, and calendars, which are given away free to consumers for visiting a new store or for attending a special event. Coupon plans are ongoing programs offering a variety of premiums in exchange for labels, coupons, or other tokens from one or more purchases (EX: Sending in three Campbell soup labels to receive a free recipe book) Rackley's Hiking Store

Types of Consumer Sales Promotion Incentives- higher-priced products earned and given through contests, sweepstakes, and rebates Product Samples Promotional Tie-Ins- involve sales promotional arrangements between one or more retailers or manufacturers Contests- games or activities that require a participant to demonstrate a skill Sweepstakes- games of chance Rebates- discounts offered by manufacturers to customers who purchase an item during a given time period

Types of Consumer Sales Promotion Product Placement- making sure a product becomes more easily recognized by placing it in special events, television, or the movies Visual Merchandising and Displays Loyalty Marketing Programs- reward customers for making multiple purchases Example = free air travel, motel discounts b/c of frequency, etc.

NOW YOU TRY! Create three sales promotion techniques that you plan to use with your promotion project product. Tell me exactly what you plan to do to. You must have both trade and consumer sales promotion represented. Describe the method you have chosen and create a visual aid to go with each (for example….with a coupon…draw the coupon). Write at least 10 sentences.