This document discusses evaluating the effectiveness of sales promotions. It begins by outlining common sales promotion techniques like money off deals, coupons, free gifts, and product sampling. The purposes and benefits of promotions are also reviewed, along with limitations. To evaluate effectiveness, the document recommends comparing sales before, during, and after a promotion using data from retailers and consumer surveys. Examples provided include a Coca-Cola promotion targeting loyal customers and an Auchan discount store promotion during a holiday. Proper evaluation is necessary to determine if promotions increase market share or attract unwanted "cherry pickers."

1. Evaluating sales promotion
effectiveness
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Made by:
Chernyak Elena
Karpukhina Tatiana
Solovyeva Tatiana
Shun Hui Luar

2. Overview
Introduction
1. Sales promotion
 Sales promotion techniques
 Purposes
2. Benefits and limitations of sales promotions
3. Sales promotion effects
4. Evaluation of sales promotion
 Theory
 Practice
 Examples of promotional activities
Conclusion

3. Introduction
 Important for most business enterprises
 Especially so with increasing market competition
 Sales promotion can help achieve every business’
ultimate goal of having greater sales
 Sales promotion can also promote greater usage and
trialability
 Marketers often use sales promotion to alter the
price-value relationship of their products or services,
as part of the overall marketing strategy

4. Introduction
Find out how effective are sales promotion

5. Techniques
1. Money off
2. Coupons
3. Free gifts
4. Free mail-ins
5. In-store sampling

6. Techniques
1. Money off
 Provides consumers additional products with little or no extra charge
 Most widely used today
 Example: price pack, buy 2 get 1 free
 Size of price reduction depends on brand requirements and the
competitive environment
 Disadvantages
 All consumers (including non-loyals) receives the same incentive
 Can be easily matched by competitors
 Frequent use of this technique may result in lower price expectation
 Advantages
 Can be implemented quickly
 Able to forecast outcomes with relatively high accuracy
 Well-liked by consumers and traders
 No need for economies for scale to implement, useful for small co.s

7. Techniques
2. Coupons
 Many different variations
 Give coupon for product A upon purchase of
product A
 Give coupon for product A upon purchase of
product B, also known as cross-couponing
 Distributed online, or door-to-door
 Similar visual impact as that of money off,
but has a lower real cost, since the level of
redemption is often low

8. Techniques
3. Free gifts
 Advantage of immediacy
 4 main types
 On-pack free gift
 In-pack free gift
 With-pack free gift
 Pack itself

9. Techniques
4. Free mail-ins
 Send in several proofs of purchase to redeem gift item
 The gift item may help in the brand differentiation
 Helps in building loyalty
 Potential problems
 Difficulty in choosing the right merchandise to offer
 This technique lacks immediacy
 Generally low appeal to consumers

10. Techniques
 In-store sampling
 Provides a direct interface between product and potential
customers
 Especially useful for complex or new products

11. Purposes
 Increase market share
 For both new and existing company
in the market: encourage trials and
hopefully a switch in loyalty to their
brand
 To clear stocks
 When the company is introducing a
new product, as a improved version
of the old product
 Not enough inventory space in the
warehouse or retail outlets
 Shelf-life

12. Benefits
 To adjust to variations in supply and demand
without changing list prices
 Small firms can use this as a marketing strategy to
compete with big firms
 Firms with niche market products can use this
marketing tool
 Useful for first-time entry into the market
 Induce trials

13. Limitations
 Weaker brand image
 Lower consumer loyalty
 Problem of stocking up

14. Outcomes
 Increased market share
 Unchanged market share
 Attracted “cherry pickers”, who did not buy the product after
the promotion
 Existing customers continue to buy the company’s products
 Decreased market share

15. Evaluation - Theory
 Obtain the actual volume of sales: before the
promotion and after the promotion
 Three consumer responses
 Competitor steal
 Brand cannibalization
 Category growth
 Customer survey to evaluate brand awareness
 Calculate total costs of the promotion
 Main cost = Volume sold * Reduced price per pack
 Other costs like dealer incentives

16. Evaluation - Practice
 Seek help from marketing agencies
 Use panel data gathering to determine how successful the
promotion was
 Loyal customers
 Cherry pickers
 Brand-switchers
 Consumption per person in the short
and long run
 The extent to which the promotion was
made known to target group

17. Evaluation - Practice
 Retailer to evaluate sales
 Before
 During
 After
 Using ad hoc research like
surveys

18. Example 1: Coca-Cola
 Targeted at the loyal
customers
 Aims to increase the
volume per buyer
 Note that the
campaign is held
during the festive
season
 We expect an increase
in sales will come from
loyal customers,
switches, and not
cherry pickers

19. Example 2: Auchan Maslenitsa
 Maslenitsa lasts for only
one week every year
 Auchan offers them at a
low price even though
there is high demand
 Strengthen its brand
image as a discount store
and attract more sales in
its other areas

20. Example 3: Domestos
 Example of never ending
promo campaign
 Offers extra mililitres free
 Bundles with other products
from the same company
 Difficult to evaluate the
sales effectiveness of this
product

21. Conclusion
 Short term sales promotions may result in greater sales,
so retailers should prepare more stocks to prevent
shortage
 Promotions can excite shoppers
 Promotions can also encourage trials and raise brand
awareness
 Frequent price promotions are harmful
 Promotions should be used together with advertising for
best outcomes
 Ensure consistency between promotional tool and the
product position

22. ENJOY SALES PROMOTIONS 