Personal Sell Pt4 Sales Promo 20 Dec04 N24


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  • Personal Sell Pt4 Sales Promo 20 Dec04 N24

    2. 2. Sales Promotion Importance <ul><li>Growth in United States </li></ul><ul><li>Exceeds $250 billion dollars a year </li></ul><ul><li>Increasing percentage of promotional dollars </li></ul><ul><li>Consumer goods companies spend more on sales promotions than advertising </li></ul>
    3. 3. Sales Promotion <ul><li>Objective: Bolster/complement other promotional mix elements during a specific time period </li></ul><ul><li>Targeted toward: </li></ul><ul><li>Sales force </li></ul><ul><li>Wholesalers and retailers </li></ul><ul><li>Consumers </li></ul>Definition: any activity or material used as a direct inducement to purchase
    4. 4. Sales Promotion Methods for Consumers Contests, games & sweepstakes Product sampling, demonstrations Rebates, cents-off- Coupons, refunds
    5. 5. Sales Promotion Methods for Consumers Multiple purchase offers, Frequent-user incentives P-O-P material Product placements/tie-ins Premiums
    6. 6. Classifying Types of Sales Promotion Promotional pricing Non-price promotions Sampling <ul><li>Price reductions </li></ul><ul><li>Free goods </li></ul><ul><li>Tied offers </li></ul><ul><li>Money off next purchase </li></ul><ul><li>Loss leader pricing </li></ul><ul><li>Cheap credit </li></ul><ul><li>Contests </li></ul><ul><li>Free gifts </li></ul><ul><li>Self-supporting offers </li></ul><ul><li>Multi-brand promos s </li></ul><ul><li>Guarantees and added services </li></ul><ul><li>Most effective in the early stages of a new product launch (#1 use for coupons) </li></ul><ul><li>Important for food products </li></ul><ul><li>Very expensive </li></ul>
    7. 7. Rebates: A Consumer Information Source <ul><li>Buyers fill out rebate forms with names, addresses and household data about customers </li></ul><ul><li>- directly targets price cuts to customers </li></ul><ul><li>- 5-10% are redeemed (A Phantom discount) </li></ul>Pepsi offers a $5 rebate on the Home Alone video
    8. 8. Rebates are often effective at changing purchase probabilities, even for big-ticket items
    9. 9. Coupons, too, can be effective at getting consumers to purchase specific products
    10. 10. Number of Coupons Redeemed Per (International) Household in 1992
    11. 11. Snapple ‘Yard Sale’ Refreshes Sales Drive Source: Direct Mktg News, 2004 <ul><li>“ The idea is about brand loyalty, getting more people to buy bottles, collect caps and buy stuff at the Snappleton yard sale, an online town on” Ms. Bernstein, Senior V.P. </li></ul><ul><li>Involvement: Collecting bottle caps. </li></ul><ul><li>Silver cap (16 oz.)- ice tea products </li></ul><ul><li>Yellow caps (Lemonade products) </li></ul><ul><li>White caps (20-32 oz. bottles.) </li></ul>
    12. 12. <ul><li>Trade shows </li></ul><ul><li>Contests, free merchandise </li></ul><ul><li>Display equipment, P-O-P materials </li></ul><ul><li>Cooperative advertising & promotions </li></ul><ul><ul><li>Vertical - channel members </li></ul></ul><ul><ul><li>Horizontal - group of retailers </li></ul></ul><ul><li>Allowances (buying vol., buy-back, scan-back, merchandise) </li></ul><ul><li>Premium or push money, slotting allowances </li></ul>Sales Promotion Methods for the Trade
    13. 13. Trade Shows Maintain relationship Transmit messages to key accounts Remedy problems Add-on sales Selling objectives Non-selling objectives Current customers Potential customers Maintain image Test products Gather competitive intelligence Widen exposure Contact prospects Determine needs Transmit messages Commit to call back or sale Contact prospects Foster image building Test products Gather competitive intelligence
    14. 14. Proportion of Promotional Expenditures Trade sales promotion Consumer sales promotion Advertising
    15. 15. Sales Promotion, Pro and Con <ul><li>Advantages: </li></ul><ul><li>Motivation method for special efforts </li></ul><ul><li>Short-term sales increase </li></ul><ul><li>Defined target audience </li></ul><ul><li>Defined role/objectives </li></ul><ul><li>Indirect roles (e.g., wider distribution) </li></ul><ul><li>Disadvantages: </li></ul><ul><li>Only short-term </li></ul><ul><li>Hidden costs </li></ul><ul><li>Confusion </li></ul><ul><li>Price cutting -Brand image </li></ul><ul><li>Postponement effect </li></ul><ul><li>Significant government regulation </li></ul><ul><li>Lack of effectiveness sometimes (learning effect) </li></ul>
    16. 16. A Benefit Congruency Framework of Sales Promotion Effectiveness JrlMktg,Oct.2000 Are monetary savings the only explanation for consumer response to sales promotions? If not, how do the different consumer benefits of sales promotion influence its effectiveness? Savings Quality Convenience Value expression Exploration Entertainment Six Benefits
    17. 17. Sales Promotions Benefit Matrix Low Low High High Utilitarian Hedonic Free Gifts Positioning Map * Coupons * *Price Reductions Rebates * Sweepstakes Free Product Offers * *
    18. 18. Study #4: Design and Procedure
    19. 19. Study #4, Conclusions <ul><li>1. Monetary saving is not the only consumer benefit </li></ul><ul><li>2. Consumers distinguish six benefits </li></ul><ul><li>Six benefits grouped between Utilitarian and Hedonic </li></ul><ul><li>All six (except quality) are significant predictors of overall evaluation </li></ul><ul><li>5. Monetary promos provide more Utilitarian benefits than Hedonic benefits </li></ul>
    20. 20. Study #5: Benefit Congruency Effect Design and Procedure
    21. 21. Study #5, Conclusions <ul><li>1.Sales promo’s provide benefits beyond monetary savings </li></ul><ul><li>2.Nonmonetary promos provide more Hedonic benefits </li></ul><ul><li>3.For High End brands, sales promos are more effective </li></ul><ul><li>4.Monetary promos can destroy market share when offered with incongruent high equity hedonic brands competing against low-priced brands </li></ul><ul><li>Proof of congruency between needs of products and monetary promotions </li></ul><ul><li>Negative effects of some promotion were due to lack of relevance </li></ul>Discussion of Studies 4 and 5
    22. 22. Role of The Promotion Mix <ul><li>Promotion is an organization’s unique set of communications (stimuli) designed to influence (inform, persuade & remind) selected target audiences into desirable responses. </li></ul><ul><li>Who says what to whom, in what setting , by which channels, with what purposes. </li></ul><ul><li>Promotion facilitates (efficient) exchange </li></ul>