1. 16
Sales Promotion

2. Sales Promotion
A direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or ultimate consumer with the primary objective of creating an immediate sale
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3. Sales Promotion Vehicles
Consumer-Oriented
Trade-Oriented
Samples
Contests, incentives
Coupons
Trade allowances
Premiums
POP displays
Contests/sweepstakes
Sales training programs
Refunds/rebates
Trade shows
Bonus Packs
Cooperative advertising
Price-off deals
Frequency programs
Event marketing
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4. Reasons for Sales Promotion Increases
Growing power of retailers
Declining brand loyalty
Increased promotional sensitivity
Brand proliferation
Fragmented consumer markets
Short-term focus of marketers
Increased accountability
Competition
Clutter
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5. Sale Promotion Concerns
Negative impact of sales promotions
Fewer dollars to build brand equity
Encourages consumers to purchase on the basis of price
Detracts from the value of the brand
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6. Objectives of Consumer-Oriented Promotions
Increase consumption of an established brand
Obtain trial and purchase
Defend (maintain) current customers
Enhance IMC efforts and build brand equity
Target a specific segment
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7. Sampling Works Best When
The products are of relatively low unit value
The product can be broken into a small piece or size that reflects the full features and benefits
The purchase cycle is relatively short
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8. Pros and Cons of Coupons
Advantages
Disadvantages
Appeals to price sensitive consumers
Hard to tell how many consumers will use them and when
Can offer discounts without retailer cooperation
Often used by loyal consumers who would purchase anyway
Effective way to induce trial of products
Low redemption rates and high costs
Defends market share and encourages repurchase
Misredemption and fraud
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9. Types of Coupons In/On-Pack In-Store Bounce-back Tear-off pads
Cross-ruff
Handouts
Instant
Dispensers
Register printout
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10. Premiums
An offer of an item, merchandise, or service, free or at a low cost, that is an extra incentive for customers
Types of Premiums
Free: Only requires purchase of the product
Self-liquidating: consumer required to pay some or all of the cost of the premium
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11. More Consumer-Oriented Promotions
Price-off Deals
Contests and sweepstakes
Refunds and rebates
Bonus packs
Loyalty programs
Event marketing
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12. Trade Oriented Promotions
Obtain distribution for new products
Objectives
Maintain support for established brands
Encourage display of products
Build retail inventories
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13. Types of Trade Oriented Promotions
Contests and incentives
Trade allowances
Co-op Advertising
Types
POP displays
Sales training
Trade shows
Buying
Promotional
Slotting
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14. Cooperative Advertising
Trade-oriented cooperative advertising
The cost of advertising is shared by more than one party
Forms
Horizontal
Ingredient-sponsored
Vertical
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15. The Sales Promotion Trap
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