1. Sales Promotion Overview and the Role of Trade Promotions
Chapter Seventeen
Sales Promotion Overview and the Role of Trade Promotions

2. Introduction to Sales Promotion
What Exactly is Sales Promotion?
Any incentive used by manufacturers to induce the trade and/or consumers to buy a brand and encourage sales force to aggressively sell it.

3. Introduction to Sales Promotion
What Exactly is Sales Promotion?
The incentive is additional to the basic benefits provided by the brand and temporarily changes its perceived price or value

4. Introduction to Sales Promotion
Promotion Targets
All three groups – the sales force, retailers and consumers – are targets of sales promotional efforts

5. Brand-Level Promotional Imperatives

6. Increased Budgetary Allocations to Promotions
Advertising spending as a percentage of total marketing communications expenditures has declined in recent years.
Promotional spending, however, has steadily increased.

7. Factors Accounting for the Shift
Push Strategy
Using promotional
efforts to push
product through
the selling chain
Pull Strategy
Using Consumer
advertising to pull
product through the
channel of distribution

8. Push and Pull Strategies

9. Factors Accounting for the Shift
Balance-of-power shift from manufacturers to retailers
Increased brand parity and price sensitivity
Reduced brand loyalty
Splintering of the mass market and reduced media effectiveness
Short-term orientation and corporate reward structures
Consumer responsiveness

10. Sales Promotions - Can Stimulate sales force
Invigorate mature brand sales
Facilitate introduction of new products
Increase merchandising space
Neutralize competitive ads
Obtain trail purchases
Hold current users
Increase product usage
Preempt competition
Reinforce advertising

11. Sales Promotions - Can’t
Compensate for lack of training and advertising
Give a long-term reason for repeat purchases of the brand
Permanently stop an established brand’s declining sales or basic non-acceptance

12. Generalizations About Promotions
1. Temporary retail price reductions substantially increase sales
2. The greater the frequency of deals, the lower the height of the deal spike
3. The frequency of deals changes the consumer’s reference price
4. Retailers pass-through less than 100% of trade deals
5. Higher market share brands are less deal elastic

13. Generalizations About Promotions
6. Advertised promotions can result in increased store traffic
7. Feature advertising and displays operate synergistically to influence sales of discounted brands
8. Promotions in one product category affect sales of complementary and competitive products
9. The effects of promoting higher-and lower-quality brands are asymmetric