Sales promotion


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Sales promotion

  1. 1. Sales Promotion The wonders and the wounds
  2. 2. Promotion Mix /Communication Mix (PR) Sales Promotion PR Selling Advertising  Below the line  Above the line
  3. 3. Two Types of Sales Promotion Consumer Promotion Trade Promotion
  4. 4. What do we want theconsumers and trade to do? Buy More Buy Now
  5. 5. A sales promotion shouldbe Temporary – if not the consumers would not believe it the next time Great Value Added – they should find reason to buy now and more
  6. 6. Trends on Sales Promotion ¾ of the marketing budget is allocated to sales promotion In 1995, 51% of total adspend represents trade promotions. 24% on media spending 22% on consumer promotion Growth in the coupon segment is tremendous in aspirational markets  Americans redeem more than 7 billion coupons annually.
  7. 7. Why the Growth??? Instant results Faster implementation Measurable Relatively easy and inexpensive
  8. 8. The Downside of SalesPromotion Brand Erosion Profitability increase is relatively low Implementation cost and problems Orients marketing managers towards short term results
  9. 9. What a sales promotionshould be…. Lets go back to the basics Should hit the consumer at a particular behavioral stage Are marketing communication activities that change the price/value relationship of a product / service perceived by the target  Generating immediate sales  Altering long term brand value
  10. 10. Planning Sales Promotion Who is our target set of consumers? What is the reason for that behavior What is the goal of the program Is there a meaningful economics attached to sales promotion
  11. 11. Types of Buyers Loyals  Buy a particular brand on a more or less consistent basis Competitive loyals  People who are loyal to the competing brand Switchers  Purchase of various brands in one category Price buyers Non Users
  12. 12. Results that are needed …. Loyals  Reinforce behavior  Increase consumption  Change buying timing Competitive loyals  Break loyalty  Encourage brand switching Switchers  Persuade to buy the “right” brand more often Price  Value added to make price less important Non users  Create awareness, create category worth
  13. 13. Types of Sales Promotions Coupon Bonus Packs In pack, On pack, and Near Pack Specialty container Continuity program Refund Sweepstakes Contest Through the mail Premium Sampling Price off Trade deal Cause related promotion
  14. 14. Coupons Clip and bring to the store to exchange Now it is phone based Induce loyalty Repeat purchase Keeps the consumers “locked”
  15. 15. Bonus Packs Like bundle pricing but this is temporary Adds value
  16. 16. In Pack, On Pack Promotion It is used to introduce new products / service Dispose of excess inventory Use excess overhead
  17. 17. Specialty Container Increases product’s perceived value Uy tignan mo ito meron libreng pitchel
  18. 18. Continuity Program /LoyaltyCards
  19. 19. Refund / RebatePromotion If the product does not perform, then its money back Or consume X number of products and get Y FREE Increases consumer confidence Loyalty program
  20. 20. Sweepstakes Chance game where the consumer has the chance to win something big through purchases The more purchases, the more tickets Creates loyalty
  21. 21. Sampling Used when the consumer is unaware of the brand or product Product buying is prone to retail channel based trial Use when the product can be broken down into smaller dimensions
  22. 22. Price off promotion Use for slow moving items Excess inventory Off season Dislodge competitors
  23. 23. Choose the right promotionfor the right situation
  24. 24. Example Problem SolutionNew product Sampling, on pack promoConsumers not loyal Rebates, sweepstakes, loyalty cardsCompetitors are attacking Price off, free goods,the market with ads premiums, rebates, etcExcess inventoryShelf life is critical
  25. 25. Consumer Promotion To induce immediate off take from the shelf To induce trial To buy more of your products To buy immediately
  26. 26. Trade Promotion Encourages your trade channel to load up Move inventory from the company to the warehouse of the trade  Distributor or Key Accounts Deals with promotional tools for staff and sales people who are involved with the trade.
  27. 27. Sell in (PUSH STRATEGY) Trade Promotion based on  Volume – buy a certain volume to attain a high discount  Prompt Payment – pay on time and get a discount  Free goods – using new products or slow moving products as promotional items
  28. 28. Volume Promotion It motivates the dealer to buy more Example  10+1 promotion – buy 10 boxes get one free  Volume discounts  Bundle promotion – feature a new product as freebie
  29. 29. Advertising Promotion Cooperative advertising  Coke and Julie’s Bakeshop  Lock in to the outlet to exclusively sell your brand
  30. 30. Cooperative Promotion  Co-branding  Using another brand to penetrate the market  Good if the equity of the other brand is high or parallel
  31. 31. Co-branding Can be a strategy or a promotion It increases margin Synergizes strength of two brands Increases profitability due to the higher value perception
  32. 32. Free Goods Better profitability Moves higher volume Economies of scale
  33. 33. Trade Advertising Advertisements used as a basis for booking sales Rationale is consumers will look for a brand that has ad support
  34. 34. Massive advertising always leadsto higher trade acceptanceTrade will only stock items that willsell
  35. 35. Personal Selling Direct Selling Distribution Selling Outlet Selling
  36. 36. Direct Sales One of the recent trends in consumer marketing Direct hit to consumers Smaller ad spending
  37. 37. Direct sales Uses human capital as resource Offering high earnings to those who do not have businesses Home based People get people strategy Very sound business model
  38. 38. How do they profit? Gross Margin 40% 1st level Commission – 10% 2nd level commission – 8% 3rd Level commission – 5% AT this point, the company still earns and yet the number of networks grow….
  39. 39. Direct Sales Meaningful to sales people The consumer saves money Answer to the crisis of power of retail channels
  40. 40. Distribution Selling Sales efforts to cover geographic region Cover relevant distribution channels Example:  Bonheur Marketing
  41. 41. Bonheur Marketing Former exclusive distributor of Marlboro and Philip Morris Covers outlets such as  Supermarkets  Sari sari stores  Sub distriutors  Dealers  Luzon wide
  42. 42. BiC became better when… Distribution was assigned to FilStar – an affiliate of National Bookstore That’s why BiC enjoys great retail presence in NBS
  43. 43. Public Relations
  44. 44. Advertising
  45. 45. Key things to remember Creative brief Copy strategy Execution methods Media Media Planning Success tracking
  46. 46. Creative Brief Brand elements Target segment Reason to buy Current behavior Current perception Desired impression
  47. 47. Copy Strategy Tagline Plot Mood and Tone Reason to believe Execution Media Media Plan
  48. 48. Media Plan Medium  Above the line  Below the line Loading  Front  Back  Seasonal  Flat
  49. 49. Media TVC Print Radio Internet  CPM (clicks per million)  Ad click  Ad impressions  Banner or button advertisement  Click through  Cost per click  Spam  URL
  50. 50. Media Billboard – of course they will stay Mall panels Comfort ads Transit ads Non traditional  Corporate gifts Leaflets
  51. 51. Media Plan Using each medium optimally to achieve brand objectives It is all about making the right mix or right allocation of budgets Hitting consumers where it matters most
  52. 52. Executions Humor MTV Slice of life Celebrity endorser Testimonial Image model – can be a competent looking person Performance test
  53. 53. Just make sure they do not… Laugh and forget which brand is being advertised Remember the story in the ad and then forget about the brand Remember the song and then… ano nga palang brand yun?!
  54. 54. Things you should remember Matrix or charts or altering SWOT with TOWS analysis (which by the way is not a marketing tool but a central management tool) DON’T BUY THE IDEA The basics still work – and it will sans a few alterations IMC is integrating all communication materials under one big idea
  55. 55. Remember Life is a journey of learning The moment you get cocky is the time you die Mistakes are best teachers Do not believe all teachers too… some of them have issues as well… pick good mentors Don’t label anything – good or bad Know thy Dharma – know what you are here for
  56. 56. Remember Detachment is a great tool Make yourself competent – goal is not to be employed but employable Don’t make yourself stagnant – even if your family or husband is rich Have FAITH
  57. 57. Remember PR competence is as important as knowledge Be the best you can ever be (not Alipin Sagigigilid all your life)
  58. 58. Thank you for such awonderful semester… really