• SALES PROMOTION
• DIFFERENT KINDS AND
• TO DETERMINE SP
OBJECTIVES & FIX BUDGETS
• STEPS IN DESIGNING A SP
• EVALUATE THE
EFFECTIVENESS OF SP
• Sales promotion is one of the
four aspects of promotional
mix. (The other three parts of
the promotional mix are
selling, and publicity/public
• Media and non-media marketing
communication are employed for a predetermined, limited time to increase
consumer demand, stimulate market
demand or improve product availability.
• point of purchase displays
• rebate (marketing)
• free travel, such as free flights
« Sales promotion consists of a
diverse collection of incentive
tools, mostly short term,
designed to stimulate quicker
and/or greater purchase of a
product/service by consumers or
the trade »
SP IN THE INDIAN
• Indian market place has seen a sea change
over the last two decades.
• Consumer is truly the king.
• Most marketers are interested in short-term
• Ads becoming less effective comparing with
Advantages and Disadvantages of
•Excessive use can shift the focus on
•Pruduces immediate results.
Short term marketing planning.
•Excessive use can erode the brand
•Prevent competitor entry or offset
competitor promotions and thus help
•Increasing sales promotion activity
maintain the brand’s current market share. has led to clutter.
•Rupee-for-rupee immediate and measurable •In mature markets sp doesn’t do
much in attracting new customers but
results can be produced.
•Gain channel support.
•Both consumers and trade can
•Easy to design and implement.
engage in forward buying, ie stocking
•Some sp techniques can be abused
•Help build database.(mail-in-coupons or
by the trade as well as consumers.
SP and Consumer behaviour:
Sales promotion can be targeted to:consumers of the product
Trade of the product
Sales force which promote the product
push and pull strategies:
• Pull strategy:
In this the attempt is to get the consumer
to the retail outlet to ask for and buy the
• Push strategy:
In this the attempt is to get the trader to
stock sufficient product through the sales
force intervention and also to induce the
consumer to buy at the retail level.
Types of sales promotions:
Sampling: giving samples of products especially when a
product is being introduced for the first time.
Price-off: less than MRP.
Quantity deals: eg: 30% extra on same MRP.
Banded offers: mixing of 2 products and giving it for less
price. Mainly this can be one fast moving and one slow
In-product gift: teaspoon in a detergent pouch, etc.
Out-product gift: bowl with cerelac,etc.
Coupons: AVT containing cash coupons inside used for
next purchase reduced price.
Trading stamps: a stamp for this much purchase etc(in
large retail shops)
Consumer contests: completion of sentences etc.
On consignment sales: pay only when the product
2. Dealer contests:
3. Dealer gifts:
4. Display contests: ITC
5. Point-of-sale material: cadbury gives attractive
6. Shop board painting: ITC, chandrika soap, Tide etc.
7. Dealer discounts: buy 10 get one free, etc.
8. Trade fair participation:
9. Dealer meets:
10. Cooperative ads.: sharing the ad. Cost.
Sales force promotions:
Incentive schemes: bonuses, etc.
Star awards: as in insurance field f.cs are given attractive
awards like visiting abroad, etc.
Sales meets: in some attractive places for their sales
Local ad budgets: sales staff will be given the budget and
will negotiate with ad agencies and release ads.
Promotional aids: leather bags, T-shirts, caps, etc.
Sales promotion objectives and budget
• Defining the sales promotion
To increase the sales by 30% during the last
quarter at the retail level.
• To generate trial among a million consumers, who
have not tried the product so far.
Understanding the sales promotion
This is a very important objective to
understand the audiences of our product.
Eg: A baby food company wants to run a consumer offer of a bowl free
with a tin of product. Assume that the competitor has a similar offer
running and the marketing manager of the company believes that if he
offers a better bowl , say stainless steel as opposed to acrylic, the offer
is likely to be a hit and achieve the objective of having mothers switch
from the competing product or get new mothers adopt the product
right from the beginning.
Methods of Determining sp budgets
Determining the marketing budget is an important job of any
Some common methods are:
% of sales method: Allocate money based on what sales they expect
to achieve during an year.
Unit of sales method: Allocate a certain propotion of the cost of
product to promotion. Eg: if the cost of a product is Rs.100, the
company will allot Rs.10 towards promotion cost.
Zero budgeting: The company determines what needs to be
achieved in terms of sales and then reworks backwards in terms of
what money will need to be allocated to deliver those customers.
Designing the sp programme
This essentially involves 3 steps:
Implementation and monitoring
• Selection of the SP tools
Eg: Rasna spiderman campaign
• Advertising the SP
Eg: Rasna ‘spiderman’ ads.
• Organisational issues in running a SP
The marketing chief of a company normally takes all decisions regarding
the running of a SP campaign. The design of the SP campaign is done
either by the brand mgt team or a SP agency retained by the
company or both. They are responsible for determining the kind of SP
that is required, the budget thereof and the implementation issues.
• Evaluating the SP campaign
In running any SP campaign, it is imp. to evaluate at 3 basic stages:
before the commencement, during and after the campaign.
The objectives must be SMART(specific, measurable, achievable,
realistic and time bound) so that they can be better evaluated.
In a nutshell……
• SP is the process of engaging with the
consumer on a one to one to one basis with
the objective of stimulating sales.
• SP is of 2: consumer & trade promotions.
• Consumer promotion is a pull strategy as it
tries to get the consumer buy certain
products with attractive offers.
• Trade promotion is a push strategy where the
trade attempts to push the products to the