2. Sales Promotion
• Sales promotions have become dominant in
many industries, due to
support existing brands
create excitement
reflect to market segmentation
3. 3
Sales Promotion in the Marketing
System
• Due to an institutional setup, sales promotions not
only address consumers, but the trade, as well.
• It can support the willingness to carry and
merchandise the product by retailers or
distributors
5. 5
Consumer promotions
• Product based (bonus packs and samples)
• Price based (price, coupons, rebates,
financing, frequency)
• Premiums
• Place based (displays)
• Games and sweeptakes
Referral program by Citi and
HDFC for credit cards
6. 6
Trade promotions
• Product based (free goods, returns)
• Price based (allowances, payment terms)
• Place based (slotting fees, display fees)
• Advertising based (coop ads, selling aids)
• Sales based (incentives, contests, prizes)
Trade promotion by giving
cash back if you buy from a
network retail store or e-
commerce site.
7. 7
Promotional Objectives
• Separated by time, consumer segmentation
and required impact
• Promotions rarely stop a declining sales
curve
• It is very easy to lose the promotional gains
made if your promotion has not been
effective in retaining new customers. So the
product has to speak for itself.
8. 8
Promotional Objectives
• Short run
1. Current Customers
Buy More
Buy Now
Be Loyal
2. Occasional Customers
3. Non-Customers
• Long run
1. Increase awareness
2. Change image
Joint Promotion HSBC and Sri
Lankan Airlines.
9. 9
Criticism of Promotions
• Do not help to build image
• Increase consumer price sensitivity
• Have strong impact on purchase timing
10. 10
Image-Building Promotions
• Image-building promotions aim to effect
brand image through creating associations,
other than low price
• Strategically correct contests and
sweepstakes
• Tie-ins with other companies
11. 11
A different strategy
• EDLP - Every Day Low Price, as a strategy
was pioneered by Procter and Gamble, to
overcome production volatility (pantry
filling effects)
• HI-LO - High-Low, is practiced by the
industry and trade, because it creates higher
excitement
