SALES PROMOTION THOMAS HILL BA 260 SUMMER 2012 S
What is it?S One of 7 aspects of the promotional mix which targets or incentivizes consumers to buy your product or service S Advertising S Personal selling S Sales promotion S Public relations S Direct marketing S Corporate image S SponsorshipS The sales promotion is targeted towards the customer, sales staff and/or the company’s distribution channel or retailer
S Usually a short-run tool used to stimulate demand for a certain product or serviceS Extremely effective and popular amongst most, if not all, major companies in the US S Estimates state that sales promotion accounts for $400 billion per annumS The goal: immediate purchase S What can we do as a company that will drive people to want to buy our product or service immediately
Examples: S Free Samples S Contests S Premiums S Tradeshows S Vacation Giveaways S CouponsS Loyalty Marketing Programs
Two greatest effects:S Lowers the price of the good or service to increase demandS Adds value to the current product or service to increase demand As advertising offers the consumer a reason to buy, the sales promotion offers the consumer incentive to buy
Benefits to sales promotions:S A lot cheaper and easier to measure than advertising: S Take any major sporting event for example–getting the necessary airtime to promote your product can cost millions S It’s difficult to objectively measure the impact of many advertising campaigns S Whereas with sales promotions, marketers know the exact number of coupons redeemed, contest entries, free samples given, etc.
Types of Consumers and Goals of Sales Promotion Sales PromotionType of Buyer Desired Results Examples • Reinforce behaviorLoyal • Loyalty marketing • Increase consumptionCustomers • Bonus packs • Change purchase timing • SamplingCompetitor’s • Break loyalty • Sweepstakes,Customers • Persuade to switch contests, premiums • Price-loweringBrand • Persuade to buy your promotionSwitchers brand more often • Trade deals • Appeal with low • Coupons, price-offPrice Buyers prices packages, refunds • Supply added value • Trade deals**Maj-Britt Kimm Chapter 18 Powerpoint slide #8**
S “Once marketers are able to understand the dynamics occurring within their product category and have determined the particular consumers and consumer behavior they want to influence, they can go about selecting promotional tools to achieve these goals.” Lamb et. al, 2011.