This document discusses the process for making sales promotion decisions. It outlines 6 steps: 1) establishing objectives, 2) selecting consumer promotion tools, 3) selecting trade promotion tools, 4) selecting business and sales force promotion tools, 5) developing the promotion program, and 6) implementing and evaluating the program. Some example consumer promotion tools discussed are samples, coupons, rebates, premiums, and point-of-purchase displays. Trade promotion tools include price discounts, advertising allowances, and free goods. The document also discusses tools for promoting to businesses and sales forces such as trade shows, sales contests, and specialty advertising.

1. How Should Sales Promotion
Decisions Be Made?
Kotler Chapter 17
Aayushi Aggarwal
IIT Kanpur

2. Sales Promotion Consists of a
collection of incentive tools ,mostly
short term, designed to stimulate
quicker or greater purchase

3. How Should Sales Promotion
Decisions Be Made?
6. Implementing and
evaluating the program
5. Developing the
program
4. Selecting business
and sales force
promotion tools
3. Selecting trade
promotion tools
2. Selecting Consumer
promotion tools
1. Establishing
objectives

4. 1. Establishing objectives
For Consumers
Segments
For Retailers
•Building trail among non users
•Attracting switchers away
from competitor
•Encourage off-
season buying
•Building brand
loyalty
•Gaining entry to
new retail outlets

5. 2. Selecting Consumer Promotion
Tools

6. Samples
Offer a free
amount of a
product or
service building
trail among non
users
Free
sample of
MyTide
bleach
with Tide

7. Coupons
Certificates entitling the
bearer to a stated saving on
the purchase of a specific
product
In newspapers

8. Rebates
Provide a price
reduction after
purchase than at
the retail shop.
Consumer sends a proof of purchase to
the manufacturer who refund part of the
purchase by mail

9. Price Packs
Reduced price pack is
a single pack sold at a
reduced price
Banded pack : 2 related
products banned
together Eg. Toothpaste
and Toothbrush

10. Premiums
(Gifts)
Are items that are given
free with the purchase of
the product

11. Frequency Programs
Programs providing
rewards related to
consumer’s
frequency and
intensity in purchase

12. Prizes
Offers of the chance
to win cash,trips, or
merchendise as a
result of purchasing
the product or
service.

13. Patronage
Awards
Values in cash or in other
forms that are
proportional to
patronage of a certain
vendor

14. Free Trails
Inviting prospective
customers to try the
product without cost in
hope that they will buy.

15. Product Warranties
Explicit or implicit promises by sellers that the
product will perform or the seller will fix it or
refund the customers money within the
specified time.

16. Tie-In promotions
Two or more brand or companies team up
on coupons,refunds and contests to
increase pulling power
Wolverine movie and Red
Robin tied in promotions
together

17. Cross-Promotions
Using one brand
to advertise
another
noncompeting
brand

18. Point-of-
purchase
Displays and
demonstrations
P-O-P displays and
demonstrations
take place at the
point of purchase
or sale. Eg. Beds
and cars
(Test drive for cars)

19. 3. Selecting Trade Promotion Tools
Trade
Price off Allowances Free Goods

20. Price off
A straight
discount off
the list price
during a
stated time
period

21. Allowance
An advertising
allowance is a
dividend paid by a
marketer to a
reseller for
advertising its
product.

22. Free goods
Offers of extra
cases of
merchandise to
intermediaries who
buy a certain
quantity

23. 4. Selecting Business
And
Sales Force Promotion Tool
Business and
Sales force
promotion Tools
Trade Shows And
Conventions
Sales Contests
Specialty
Advertising

24. Trade Shows
And
Conventions
An exhibition for companies in a
specific industry to showcase and
demonstrate their new products
and services.
Trade Fair in Delhi

25. Sales
Contests
Aims at inducing the sakes force
or dealers to increase their sales
results over a period of time
with prizes going to those who
succeed.

26. Specialty
Advertising
It consists of useful, low cost
items bearing the company’s
name. e.g key chains, ballpoint
pens etc.

27. Developing
The
Program
Size
Duration
Incentives
Distribution
Vehicle
Timing of
the
promotion
Total Sales
Promotion
budget
5. Developing the program
Determine the size of incentive. A
certain minimum is required for
the promotion to succeed.
Incentives might
be offered to
everyone or to
select groups
Decide
duration of
the
promotion
A prize-off coupon can be
distributed in a product package,
in stores, online or by mail

28. 6. Implementing and Evaluating the
program
Implementation
Lead time
Time necessary to
prepare the program
prior to launching it
Sell-in time
Begins with
promotional
launch and ends
when almost 95%
of the deal
merchandise is in
hands of
consumers
Evaluation
Sales Data
Consumers Survey
Experiments