9 sales promotion

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9 sales promotion

  1. 1. IMC - Prof. Rajesh Satpathy
  2. 2. Sales PromotionSales Promotion:Personal selling and advertising often work closely with anotherpromotion tool, sales promotion. Sales promotion consists ofshort-term incentives to encourage the purchase or sales of aproduct or service. Whereas advertising offers reasons to buy aproduct or service, sales promotion offers reasons to buy now.Sales promotion is the most short-term of the promotion mixtools. Whereas advertising or personal selling says “buy,” salespromotions say “buy now.”
  3. 3. Sales PromotionSales Promotion Definition:“ Short-term incentives to encourage the purchase or sale of aproduct or a service. Sales promotion includes a wide variety ofpromotion tools designed to stimulate earlier or stronger marketresponse”.
  4. 4. Sales PromotionRapid Growth of Sales Promotion…Sales promotion tools are used by most organizations, includingmanufacturers, distributors, retailers, and not-for-profitinstitutions. They are targeted toward final buyers (consumerpromotions), retailers and wholesalers (trade promotions),business customers (business promotions), and members of thebusiness customers (business promotions), and members of thesales force (sales force promotions).Today, in the average consumer packaged-goods company, salespromotion accounts for 77 percent of all marketing expenditures.
  5. 5. Sales PromotionToday, consumers have become more deal oriented. In the currenteconomy, consumers are demanding lower prices and betterdeals.Sales promotions can help attract today’s more economy-orientedconsumers. The growing use of sales promotion has resulted inpromotion clutter, similar to advertising clutter.promotion clutter, similar to advertising clutter.In developing a sales promotion program, a company must firstset sales promotion objectives and then select the best tools foraccomplishing these objectives.
  6. 6. Sales PromotionSales Promotion Objectives:Sellers may use consumer promotions to urge short-termcustomer buying or enhance customer brand involvement.Objectives for trade promotions include getting retailers to carrynew items and more inventory, buy ahead, or promote thecompany’s products and give them more shelf space.company’s products and give them more shelf space.For the sales force, objectives include getting more sales forcesupport for current or new products or getting salespeople to signup new accounts.
  7. 7. Sales PromotionSome examples of popular sales promotions activities:1. Buy-One-Get-One-Free (BOGOF) - which is an example of aself-liquidating promotion. For example if a loaf of bread is pricedat Rs. 10, and cost Rs.3 to manufacture, if you sell two for Rs.15,you are still in profit - especially if there is a correspondingincrease in sales. This is known as a PREMIUM sales promotionincrease in sales. This is known as a PREMIUM sales promotiontactic.2. Customer Relationship Management (CRM) incentives such asbonus points or money off coupons. There are many examples ofCRM, from Petroleum Companies to banks to supermarkets.
  8. 8. Buy one get one free Petro Mile Card
  9. 9. Sales Promotion3. New Media - Websites and mobile phones that support a salespromotion.For example, in the United Kingdom, Nestle printed individualcodes on KIT-KAT packaging, whereby a consumer would enterthe code into a dynamic website to see if they had won a prize.Consumers could also text codes via their mobile phones to thesame effect.same effect.4. Merchandising- additions such as dump bins, point-of-salematerials and product demonstrations.
  10. 10. Dump BinsPOP Displays
  11. 11. Sales Promotion5. Free gifts e.g. Subway gave away a card with six spaces forstickers with each sandwich purchase. Once the card was full theconsumer was given a free sandwich.6. Discounted prices e.g. Budget airline such as SpiceJet e-mailtheir customers with the latest low-price deals once new flightsare released, or additional destinations are announced.are released, or additional destinations are announced.7. Joint promotions between brands owned by a company, orwith another companys brands. For example fast food restaurantsoften run sales promotions where toys, relating to a specificmovie release, are given away with promoted meals.Eg. MTV & NTT Docomo mobile promotion technology
  12. 12. Low price dealsGift CardLow price dealsmobile-phone-based jointpromotion trial using a newaccess technology
  13. 13. Joint Promotion
  14. 14. Sales Promotion8. Free samples: tasting of food and drink at sampling points insupermarkets.For example Red Bull was given away to potential consumers atsupermarkets and at petrol stations by a promotion team.9. Vouchers and coupons: often seen in newspapers andmagazines, on packs.magazines, on packs.10. Competitions and prize draws: in newspapers, magazines, onthe TV and radio, on The Internet, and on packs.
  15. 15. Free Sample Offer
  16. 16. Sales Promotion11. Finance deals: for example, 0% finance over 3 years onselected vehicles.Many of the examples above are focused upon consumers. Dontforget that promotions can be aimed at wholesales anddistributors as well. These are known as Trade Sales Promotions.Examples here might include joint promotions between amanufacturer and a distributor, sales promotion leaflets and othermaterials (such as T-shirts), and incentives for distributor salespeople and their retail clients.
  17. 17. Sales PromotionSales promotion:Short-term incentives to encourage the purchase or sale of aproduct or a service.Event marketing (or event sponsorships):Creating a brand-marketing event or serving as a sole orparticipating sponsor of events created by others.Trade promotions:Sales promotion tools used to persuade resellers to carry a brand,give it shelf space, promote it in advertising, and push it toconsumers.Business promotions:Sales promotion tools used to generate business leads, stimulatepurchases, reward customers, and motivate salespeople.
  18. 18. Planning Sales Promotion ProgrammesBeyond selecting the types of promotions to use, marketers mustmake several other decisions in designing the full sales promotionprogram. First, they must determine the size of the incentive.A certain minimum incentive is necessary if the promotion is tosucceed; a larger incentive will produce more sales response. Themarketer also must set conditions for participation. Incentivesmarketer also must set conditions for participation. Incentivesmight be offered to everyone or only to select groups.
  19. 19. Planning Sales Promotion ProgrammesMarketers must determine how to promote and distribute thepromotion program itself. A Rs. 10/- off coupon could be given outin a package, at the store, via the Internet, or in an advertisement.Each distribution method involves a different level of reach andcost.Increasingly, marketers are blending several media into a totalIncreasingly, marketers are blending several media into a totalcampaign concept. The length of the promotion is also important.If the sales promotion period is too short, many prospects (whomay not be buying during that time) will miss it. If the promotionruns too long, the deal will lose some of its “act now” force.
  20. 20. Planning Sales Promotion ProgrammesEvaluation is also very important. Many companies fail to evaluatetheir sales promotion programs, and others evaluate them onlysuperficially.Yet marketers should work to measure the returns on their salespromotion investments, just as they should seek to assess thereturns on other marketing activities. The most commonreturns on other marketing activities. The most commonevaluation method is to compare sales before, during, and after apromotion.
  21. 21. Planning Sales Promotion ProgrammesEvaluation is also very important. Many companies fail to evaluatetheir sales promotion programs, and others evaluate them onlysuperficially.Yet marketers should work to measure the returns on their salespromotion investments, just as they should seek to assess thereturns on other marketing activities. The most commonreturns on other marketing activities. The most commonevaluation method is to compare sales before, during, and after apromotion.
  22. 22. Planning Sales Promotion ProgrammesNow, Marketers should ask: Did the promotion attract newcustomers or more purchasing from current customers? Can wehold onto these new customers and purchases? Will the long-runcustomer relationship and sales gains from the promotion justifyits costs?Clearly, sales promotion plays an important role in the totalClearly, sales promotion plays an important role in the totalpromotion mix. To use it well, the marketer must define the salespromotion objectives, select the best tools, design the salespromotion program, implement the program, and evaluate theresults.Moreover, sales promotion must be coordinated carefully withother promotion mix elements within the overall IMC program.
  23. 23. Thank You!

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