1. Sales Promotions

2. What are Marketing Communications?
Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers, directly or indirectly, about the products and brands they sell.
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3. Modes of Marketing Communications
Advertising
Sales promotion
Events and experiences
Public relations and publicity
Direct marketing
Interactive marketing
Word-of-mouth marketing
Personal selling
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5. Communication Platforms
Advertising
Print and broadcast ads
Packaging inserts
Motion pictures
Brochures and booklets
Posters
Billboards
POP displays
Logos
Videotapes
Sales Promotion
Contests, games, sweepstakes
Premiums
Sampling
Trade shows, exhibits
Coupons
Rebates
Entertainment
Continuity programs
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6. Communication Platforms
Events/ Experiences
Sports
Entertainment
Festivals
Arts
Causes
Factory tours
Company museums
Street activities
Public Relations
Press kits
Speeches
Seminars
Annual reports
Charitable donations
Publications
Community relations
Lobbying
Company magazine
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7. Communication Platforms
Personal Selling
Sales presentations
Sales meetings
Incentive programs
Samples
Fairs and trade shows
Direct Marketing
Catalogs
Mailings
Telemarketing
Electronic shopping
TV shopping
Voice mail
Blogs
Websites
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8. Word-of-Mouth Marketing
Person-to-person
Chat rooms
Blogs
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9. What is Sales Promotion?
Sales promotions consist of a collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade.

10. Sales Promotion Tactics
Consumer-directed
Samples
Coupons
Cash refund offers
Price offs
Premiums
Prizes
Patronage rewards
Free trials
Tie-in promotions
Trade-directed
Price offs
Allowances
Free goods
Sales contests
Spiffs
Trade shows
Specialty advertising

11. Sales Promotion Tactics
Consumer promotion is a short term incentive directed at consumer and consists of coupons, discounts, gifts, patronage rewards and other gifts. It can be considered as pull promotion.
Trade promotions are financial incentives given by the manufacturer to a retailer for better displays and price promotions. It can be considered as push promotion.

12. Key questions regarding Sales promotions
Some of the key questions that are of paramount importance to sales promotions are:
Are they increasing sales to their maximum?
Are they really as much profitable as thought to be?
How sensitive is consumer response to the design and communication of sales promotion?
What are long-term impact of sales promotion?

13. Impact of Sales promotions
Sales promotions impacts customers through three different routes:
Changing the product utility associated with product purchase ( the economic route).
Influencing consumer’s belief about product, brand or industry( the informative/benefit route).
Affecting the feelings and emotions aroused in the consumer( the affective route).

14. Economic Route
Economic affects pertains to a monetary or non-monetary gain or loss that a sales promotions provides to a customer.
Monetary benefits could be the price discounts and bundling.
Non-monetary benefits are the reduced order taking time, reduced delivery time, innovative channel of service or product delivery that actually reduces the cost (e-commerce).

15. Informational Route
Communication of direct or inferential knowledge derived from exposure to a promotion.
Increased awareness and increased brand recall are the resulting phenomenon of exposure to a sales promotion.
It also enables consumer’s to draw inferences about price-quality, product, product personality etc.

16. Affective Route
Affective influences of sales promotions are the feelings and emotions aroused due to typical sales promotions like cause related marketing.
It’s effects can be both general or specific.
General effects could be the positive impact of the ambiance on the hedonic customer looking for adventure and exploration.

17. Affective Route
Specific effects could be the inferences consumer’s make about themselves like being smart, ethical, lucky etc.

18. Deal Evaluation, Purchase Intention/Sale
Economic value
Informative value
Affective value
Sales Promotion
Deal Evaluation, Purchase Intention/Sale
Managerially Controllable contextual factors
The three routes of affective promotions

19. Computing Consumer Promotion’s Profitability
Promotion Profit= Economic value + Affective value – Opportunity lost – Promotional Expenses – Other variable expenses
Economic Value = Incremental volume due to promotion (Margin – Discount)
Affective Value = Incremental volume (Margin)
Opportunity lost = Baseline volume expected to be sold without promotion (Discount)

20. Using Sales Promotions
Establish objectives
Select tools
Develop program
Pretest
Implement and control
Evaluate results

21. Giant Consumer Products
Case Analysis

22. Case Summary Mike Needs strategy to allocate fund to
Dinardo’s 16 oz pack
Dinardo’s 32 oz pack
Natural meals
Do nothing
Problem: 2008 GCP’s frozen division was not able to earn desired profitability. They were evaluating options for sales promotion.

23. Organization structure
A rough look into the structure reveals the following hierarchy (who is answerable to whom)
Allan (CEO): Raises concerns on adverse impact of sales promotion
Potential for Cannibalization
Eroding Brand equity
Competitor may take advantage
Below Allan is Flatt (VP Sales): Suggests for Sales promotion

24. Organization structure
Below Flatt is Mary (GM for FFD): Flatt Consults Mary for effective use of funds
Below or may be on the same hierarchy with Mary is Mike (VP Marketing for FFD): Mary asks Mike to do the fund allocation for Flatt.

25. Brand Line
FFD is the brand under which they have two types Dinardo’s and Natural Meals.
This forms the length of the Product line.
Under Dinardo’s they have D32, D16 & D8&6.
This forms the depth of the Product.
Under Natural meals they have no depth. For this they followed Lifestyle based segmentation.

26. Analysis of the Competitors
A look into their competitors reveals the following information:
Daft: Competitor for Natural Meal (Organic Product for Niche segment)
Restaurants: Competitor for all brands
Supermarkets: Competitor for all brands

27. Market Analysis for GCP
Market is 2.8%
Channel is Manufacturers to Retailers
Channel Conflict identified from past for running sales promotions are
Not passing benefits to consumers
Passing for the offer period and once offer is over selling the same stock for higher
Selling it at discount even after the discounting period.
The last two is case of forward purchasing and piling of stock.

28. Mike’s Planning for Promotion
Objective was to increase volume and thus profitability. Vehicle for communication was weekly circular and end aisles displays. Sales promotion was scheduled for 1 week period.
Mike and Mary firmly believed that sales promotion is only a push strategy and to pull the customer for the longer period of time they need to focus on:
AIDA model of selling
New Product Introduction
Attractive Packaging

29. Solution for Dinardo 16 & 32
From Exhibit 3 (template 1) considering promotional impact on the promoted item it is clear that
Running promotion in D32 would generate profitable margin. ($718,986)
Running promotion on D16 would give negative margin (-$526,946)
From this template the company can conclude to run promotional campaign for D32 not D16.

30. Solution for Dinardo 16 & 32
From Exhibit 3 (template 2) considering within brand cannibalization it is clear that:
Incremental volume in D32 is largely due to the cannibalization of D16

31. Solution for Natural Meals
Change in the margin as a result of promotion is 12% for Natural Meal.
Go ahead with the promotion for Natural meals as there are no chances of cannibalization.
Natural Meal also do not have mass appeal so sales promotion may help the brand to get better mass appeal and increase its awareness and persuade customers to buy the same.

32. Thank You