Group Members1. Monika Saxena2. Suraj Singh3. Diksha

1. What is sales promotion? Tools of sales promotion.2. History of sales promotion3. Consumer sales promotion.4. Trade sales promotion.5. Three steps to effective sales promotion.6. Significance of sales promotion in the scenario of emerging IMC.7. Demerits of sales promotion

Sales Promotion

Sales promotion is one of the five aspects of "Promotional Mix".

Sales Promotion are the set of marketing activities undertaken to boost sales of product or service.

• Sales Promotion signifies all those activities that supplement, coordinate, and make the efforts of personal selling and advertising more effective.

• It is non-recurrent in nature, which means it can not be used continuously.

• Sales Promotion consist of diverse collection of incentive tools, mostly short term designed to stimulate quicker purchase or greater purchase of particular product by cosumers or the trade.

• Advertising offers a reason to buy but Sales Promotion offers an incentive to buy.

Tools of sales promotionSales promotion includes ToolsSamples CouponsPrices offPrizesCash refundsContestPoint of sale Free trialsPremiumsBonuses

Cont...WarrantiesRebateTrade contestPush money Price packsCross promotionFree goods and so on.....

WHY IT STARTED?* Build traffic in store* create extra interest in product* Increase sales during down period or heavy competition * Motivate staff* Introduce new product, generate trial* Stock clearance

HISTORICAL REVIEW¾ of the marketing budget is allocated to sales promotion In 1995, 51% of total ads pend represents trade promotions. 24% on media spending 22% on consumer promotion Growth in the coupon segment is tremendous in aspirational markets Americans redeem more than 7 billion coupons annually

CONSUMER SALES PROMOTION• It is a MARKETING TECHNIQUE that is used to

entice customers to purchase a product. The promotions typically last for a set period of time and are used to achieve a specific purpose, such as increasing market share or unveiling a new product.

Functions Of Consumer Sales Promotion1. Building Product Awareness2. Create Interest and New Users3. Providing Information4. Creating Demand5. Reinforcing The Brand

TECHNIQUES OF SALES PROMOTION• Coupons - Coupons are short-term in

nature since most (but not all) carry an expiration date after which the value may not be received.

• Rebates - Rebates, like coupons, offer value to purchasers typically by lowering the customer’s final cost for acquiring the product.

• Promotional Pricing - One of the most powerful sales promotion techniques is the short-term price reduction or, as known in some areas, "on sale" pricing. Lowering a product’s selling price can have an immediate impact on demand.

• Trade-In - Trade-in promotions allow consumers to obtain lower prices by exchanging something the customer possess, such as an older product that the new purchase will replace.

• Contests and Sweepstakes - Contests are special promotions awarding value to winners based on skills they demonstrate compared to others.Sweepstakes or drawings are not skill based but rather based on luck. Winners are determined by random selection.

• Samples, Free Product and Premium - Enticing members of a target market to try a product is often easy when the trial comes at little or no cost to the customer.

• Loyalty Programs - Promotions that offer customers a reward, such as price discounts and free products, for frequent purchasing or other activity are called loyalty programs.

• Demonstrations and Personal Appearances - Demonstration is experienced in-person or via video form, such as over the Internet, this promotional technique can produce highly effective results.

Trade Sales Promotions In business and marketing, “trade” refers to the relationship between manufacturers and retailers. Trade Promotion refers to marketing activities that are executed in retail between these two partners. Trade Promotion is a marketing technique aimed at increasing demand for products in retail stores based on special pricing, display fixtures, demonstrations, value-added bonuses, no-obligation gifts, and more.Types of Trade promotion 1.In store display 2.Tempratory Price reduction3.Coupons4. Contest and sweepstakes5. Rebates6. Premiums7. Sampling

• Retail stores can be an extremely competitive environment• Trade promotions can help companies differentiate their products

from the competition.• Companies can utilize Trade Promotions to increase product visibility

and brand awareness with consumers.• Trade Promotions can also increase a product’s consumption rate, or

the average quantity of a product used by consumers in a given time period.

• Furthermore, effective Trade Promotions can enlarge a product’s market segment penetration, or the product’s total sales in proportion to the category’s competition.

• Companies use Trade Promotions to improve distribution of their product(s) at retailers and strengthen relationships with retailers. Lastly, Trade Promotions can be leveraged to introduce new product launches into retail stores.

Issues In Trade Promotions

1. Lack of accurate and timely information2. Inability to plan promotions based on

analytics3. Ineffective organization and partner

integration4. Lack of appropriate Key Performance

Indicators

Three Steps to Effective Sales Promotions Here's what you need to do:1. Target your effort Promotions can spur purchases by established customers, reel in new customers, draw customers from competitors, get current customers to buy differently, and stimulate business during slow periods. But, you must decide which of the following is most important so that you can target your effort:•Do you want customers to purchase more frequently, buy in greater volume, or be attracted to new or different offerings?•Do you want to lure new customers into your business?•Do you want lapsed customers to give your business another try?•Do you want to boost business during slow hours, weekdays or particular seasons

Targeted promotion prompts customers to take action by offering one of these incentives:•Price savings, including discounts, coupons or added value offers•Samples or trial offers to provide a low-risk way to try new products or services•Events or experiences to generate crowds, enthusiasm, sales, publicity.

2. Plan your incentive

Bear the following in mind1.Price offers Avoid uninspiring 10 to 20 % discounts, but also avoid very deep discounts.2.Coupons. Young consumers and affluent shoppers--groups that traditionally shun coupons--are using them. Printed coupons are still the most widely circulated, but printable coupons, distributed on web sites and via e-mail, provide a terrific way to test price offers .3. Samples work •Online-based businesses need to promote free samples .•Retailers can turn sampling into promotional events. Think of Costco on weekends.•Service businesses would do well to give away mini versions of their offerings. 3. Events and experiences draw customers for celebrations, product launches, special appearances or presentations, and other activities that combine entertainment with brand and product presentations.

3. Know what you want to achieve

Just be clear about what you want to achieve Set the number of sales you want to ring up dollars

you want to bring in customer names you want to collect, buying

patterns you want to change or any other objective you want your promotion to

achieve. Then determine what your desired change will

mean financially to your business.Allocate a promotion budget, dedicate staff time

and invest the energy necessary to host a strong promotion that will deliver business-boosting results over the time period it covers.

Significance of sales promotionDirect impact in boosting

salesExample

• It is also very important in any sales promotion to always include an expiration date. This gives urgency for these households to respond to your sales promotion before the offer expires.

Building on your consumer's loyalty• points-based loyalty

program • Boloco. They speak the language of their audience by measuring points in dollars, and rewards in food items. Customers swipe their stylish Boloco card at every purchase and the card tracks the amount of money spent. Every $50 spent earns the customer a free item. Doesn’t matter if they choose a super jumbo burrito or an extra small smoothie - it’s free after $50. This is an example of a company simplifying points with an accessible customer reward system.

• Example :-a manufacturer might offer steep price discounts at its on-site shop, convincing consumers to travel to its location to obtain deals they can’t get at their local retailers.

3.an effective tool in a highly competitive market, when the objective is to convince retailers to carry a product or influence consumers to select it over those of competitors.

4..a little push to consumers which they generally require in shaping their buying choice

Sales promotion with respect to changing paradigm of emerging paradigm imc

• it offers an alternative to only means of boosting the sales ie through advertising...

• Advertising only creates awareness & knowledge about the product but sales promotion provides an incentive and a reason to the consumer to buy the product...

• the contemporary scenario of globalization ( age of Mnc and Tnc) where everyone wants to make a profit....sales promotion best fits in ...in collaboration with adv, PR and other tools of marketing communication mix...

DISADVANTAGES OF SALES PROMOTIONS

While sales promotion is a powerful and effective method to produce immediate short term positive results, it is not a cure for a bad product or bad advertising. In fact, a promotion is speed up the killing of a bad product.

*Increased price sensitivity- Frequently promoted brands in the product category, especially on the basis of price, make consumers and traders more price sensitive not only for the promoted brands but for other brands as well in the same product category.Consumers wait for the promotion deals to be announced and then purchase the product. This is true even for brands where brand loyalty exists. Customers wait and time their purchases to coincide with promotional offers on their preferred brands.

• Quality image may become tarnishedIf the promotions in a product category have been rare, or the product happens to be of high involvement category, the promotions could have a negative effect about its quality image. Consumers may start suspecting that perhaps the product has not been selling well, the quality of the product is true compared to the price or the product is likely to be discontinued because it has become outdated.

• Dealers forward buy and divert stocksIn case of deals for the trade, many dealers forward buy, in excess of their inventory requirements. This is particularly happens if a product is low bulk, much in demand and the inventory holding costs are favorably low. This is true both for wholesalers as well as retailers.Wholesalers and retailers do not hesitate in selling these excess stocks in non- deal areas on prices that are less than the list price, but keeping some reasonable margin for themselves. This is likely to have a negative effect on price discrimination efforts of the company as dealers and those areas would not be buying even the normal requirements from the company.

• Merchandising support from dealers is doubtfulOne of the trade promotions tool is to offer promotional allowances to trade people to motivate them to provide merchandising support and to pass on some benefit to consumers. This generally is the condition attached with such promotional allowances. In many cases, the dealers do not cooperate in providing the merchandising support nor do they pass on any benefit to consumers. The retailer might not be willing to give support because he does not have the place, or the product does not sell much in his shop, or may be he thinks the effort required is more than the commission/benefit derived.

• Short-term orientationSales promotions are generally for a short duration. This gives a boost to sales for a short period. This short-term orientation may sometimes have negative effects on long-term future of the organization Heavy use of sales promotion, in certain product categories, may be responsible for causing brand quality image dilution. The argument given in favor is that companies should develop superior products or services which are better than competitors and consumer should be convinced through appropriate and focused advertising about the superiority of the product and its image.

This will result in lasting brand identities reflecting consumer values. Then there will be no need to offer any extra benefits; only the lasting brand image will keep customers loyal to the brand.