Sales promotion

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Pubblicità e Strategie di Comunicazione Integrata della Prof.ssa Laura Minestroni. Sapienza-Roma

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Sales promotion

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

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