what exactly is sales promotion

8/3/2019 What Exactly is Sales Promotion

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What Exactly is Sales Promotion?

Promotion: any incentive used by manufacturers to induce the trade and/or consumers to buy a

brand and encourage sales force to aggressively sell it

Sales Promotion

Consumer products Industrial products Consumer products Consumer-oriented

coupons premiums samples contests/sweepstakes rebates etc

Trade-oriented


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point-of-purchase (POP) advertising allowances display allowances merchandise assistance quantity discounts

Industrial products

Trade shows Displays/exhibits Brochures and technical promotional material

Tools forConsumer Sales Promotion

Coupons and Rebates

Premiums

Loyalty Marketing Programs

Contests & Sweepstakes

Sampling

Point-of-Purchase Promotion

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Tools for Trade SalesPromotion

Trade Allowances

Push Money

Training

Free Merchandise

Store Demonstration

Conventions & Trade Shows

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Push MoneyMoney offered to channel intermediaries to encourage them to push products--that is, to

encourage other members of the channel to sell the products.

The amount of discounts disbursed during the

festive season(*in Rs 000)

CAR MODEL DISCOUNT FORMATION

Hyundai Accent 25-30 FreeInsurance,Registration,MP3 player

Tata Indica (V2 D andXeta)

27-38 Free Insurance, Cashdiscount

Maruti swift 15 Cash

Chevrolet Optra ( Ls-lt) 30-40 Free Insurance, Cash

Toyota Corolla 30-40 Free insurance, cash

Honda Accord 15-20 Cash

Ford Fiesta 15-20 Cash,MP3 Player

Honda Civic 10-15 Cash, Accessories


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Some recent Initiatives in Gift Items by India Inc forFestival season

COMPANY FESTIVAL STRATEGIES

Timex Launched racing Chronograph and will be penetrating in 4new places

Tanishq Launched everyday diamond jewellery

PepsiCo Launching gift pack for both Frito lay and pepsi

Archies Focusing more on corporate gifting

De Beers Group Launching new products and will be targeting themasses

Sales promotion

Adhesive which bonds face to face selling and promotional mix. Direct and immediate inducement that adds an extra value to the product so that it prompts

dealers, distributors, consumers to buy the products

Communicate-Convince-Compete Impact is short term.Acts as an catalyst

Characteristics

1)Invitation 2)Incentive 3)short Term 4)Stimulation in Purchase

Increase in Use of Sales promotion

1)Contineous rise in media costs 2)Advt efficiency is declining 3)Media clutter is on rise


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4)With increase in number of Brands the brand loyalty is fading 4)Competition is on rise ,traders are asking for more schemes 5)For product like durables Sales promotion is more effective than advertising

OBJECTIVES

1)FOR CONSUMERS 1)Create awareness 2)converting non users into users 3)winning over the competitive customers 4)Increase consumption pattern

2)FOR TRADERS

1)Display of products(New) 2)carry high level of stock 3)Encourage stocking of related items to offer a total system 4)Increase channel length and numbers 5)Combat competitors 6)Maintain exclusivity of Brand 7)Morale boosing 8)Motivate thr reward and recognition

3)FOR SALES FORCE

1)Collection of market information 2)Launch of new product 3)improve sales effectiveness 4)stimulate offseason sales 5)Motivate thr recognition

SALES PROMOTION TOOLS


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Type of market Competitive offer Cost of tool Relative effectiveness Type of product Size of organization

CONSUMER PROMOTION

A)Point of Purchase Goods will be displayed are half sold. Last word before purchase strategically located Skillfully designed display can enhance sales appeal

Displayspackaging, stickers, danglers posters, illuminated designs, motion displays.

B) Demonstrations Retail outlet/homes-durables Door to Door Key people journalist, media etc Vacuum cleaners, washing machine ,low cost product like beverages. C) Samples Free trial send the mail ,delivered at doorstep attached to product, at retail outlet. 1) shampoo, Hairoil, tea 2)large pack of detergent powder may contain pack of soap3)pharma

free sample effective way, expensive.

D) prizes To lure customers cash or kind /trip to exotic Location -legal obstacle prizes are not tied with

purchasing ,slogan ,Riddle Quiz ,lunch with celebrity-Individuals compete on basis of creative

skills based on chance/luck

DEALS: Majority of them are prices oriented in its appeal-1) Full money returned within 7 days if not

satisfied.


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2)price off say 10% on max. retail price. 3) Extra units in same price. For Eg. 2 safety blades in pack of ten (7 o clock) DEALER 1) Internal store display 2)Window display- Display Promotion Scheme (DPS)-24+1 F,48+3 F. Display Premium Allowance(DPA) If you buy 24 and display 1 you will get100/- If you buy 48 and display 1 you will get 300/- Mass Media Promotion(MMP) : offer is till stock lasts Bonus Stamp Displayed Bonanza Scheme(BSDBS) Bottles Type Stamp 12 WRL 1 Red 6 WGL 1 Yellow 3)Dealer Sales Contest- Dealer compete in SP 4)Dealer Stock Display 5)Dealer Discounts-other than normal trade discount 6)Cooperative Advertisement &Promotional Allowance

7)Dealer Gifts-

INDUSTRIAL MARKETING

Products with wide price range few rupees from nuts and bolts to several lakhs for machine tool No of customer small A) Documentation : Improve effectiveness 1)product literature-Type,Size, Design ,features 2)Selection and performance Charts-


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3)Technical Charts- 4) Operating and trouble shooting 5 ) Installation Manual 6)price list B) working model-model ,cut out,photograph Technical Seminar-selectivity(personal rapport) Comprehensive (design, manufacturing, raw

material, testing ,problems)

RED FM

SMS RED to 58558 Radio stations in Mumbai are celebrating the monsoon season through various promotions-

cum-public service initiatives. RED FM(Bajate Raho) has rolled out an extensive plan to help dela

with monsoon. Listeners can vote for boat on RED FM if their area is drowning in downpour. The

area with highest number of votes stand to win an inflatable RED FM boat.

In the heavy rain volunteers with huge ,RED FM branded umbrellas at major malls, multiplxesand railway stations

FEVER 104 FM launched a monsoon Help line that promised to ease Mumabaikars woes byaddressing problems like water logging ,power cuts

BIG 92.7 FM has tied up with weather monitoring department called Limtex to get live updatedweather reports from 22 locations

Fairglow has effectively used sales promotions to introduce its brand, by doing a lot of salespromotions like the buy 3 get 1 free, also Fairglow free with Good Knight, with other HLL

products.

When Godrejdid sales promotions to increase it washing machine sales Samsung to protect itsmarket also introduced sales promotions.

Godrej gave a rebate offer and a free VIP suitcase. So Samsung also introduced the rebate offerand gave a camera free.

Pantene when it was launched did a lot of sampling, to stimulate trail purchase. Their effortshave surely shown results, with Pantene being one of the top selling brands in India today.

Types of coupons


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Instant redeem coupon-distributed in retail store and placed on packages. The consumer canimmediately redeem the coupon while making purchase

Bounce Back coupons-Coupons placed inside the packages so that customers cannot reddemthem quite as quickly.This helps in repurchase

Scanner delivered coupon-Coupons deliverd at the cash register Cross Ruffing-Placement of coupon for one product on another product.Used for same company

product,encourages purchase within same brand/category

Response offer-Coupons are mailed by the consumers Methods of distributing coupons Print media Direct mail On or in package In store Sampling Internet Sales staff Fax

Contests-cum-sweepstakes:

Elle 18 Promotion:Elle 18 valentines day promotion, feb 2002 Objective:to use valentiness day platform to communicate with th etarget audience of Elle 18 City: Delhi, Mumbai, Banglore, Chnadigarh, Pune. Strategy: Upon the purchase of Elle 18 products worth a certain amount, a scratch-card was

given out. this could entitle the person to a number of gifts and hampers. The highlight of this

was the Cinderella Activity which invited those customers who had bought products worth a

pre-decided amount to try put a glass slipper. The lucky few, whose feet fit, were awarded dinner

dates.


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Refund and Rebates

They are offered to consumers or to the trade following the purchase of product. Consumer is expected to pay full price against the purchase and present the proof of

purchase,the manufacturer then reimburses a portion of the purchase price

In-store sampling

Lakme has in-store trail products. Since it in the cosmetics market it is very essential to providesamples, many stores in Mumbai from time to time have Lakme sampling offers. Where they

allow you to try the product and then buy it.

Pantene does door to door sampling.On-package sampling

Fair glow, a lot of free Fairglow soaps were available with many other products, especially otherHLL products.

Mobile sampling

Many road shows and mobile vans distribute free products or offers. Free Movie tickets, disco passes, pensare often distributed.

Price Off

Price deals are probably the most commonly used promotional techniques. A price deal for acustomer means a reduction in the price of the promoted product and the consumer sav

Colgate fresh energy ice blue gel(Colgate India) 50 gm pack, Rs. 5.50 off on normal price, nowavailable at Rs. 12.50 only. Determining the quantum of discount depends on the consumers

price perceptions and may be difficult to decide.

Banded Pack-Premium

The offer is termed as banded pack when 2 or more units of the products are sold at areduced price compared to the regular price.

Pepsodent toothpaste special pack a 150gm toothpaste + a 100gm toothpaste and a G.I.Joeinternational character, all in 1 pack at a low price of just Rs., which saves Rs.81/-

Trial offers


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Trial offers have the same goal as sampling to induce consumer trial use of a brand- but theyare used for more expensive items.

Ex: exercise equipment, appliances, consumer electronics, etc. the expense to the firm of coursecan be formidable. Segments chosen for this sales promotion technique must have high sales

potential.

Loyalty Reward

Repeat purchases may be stimulated by frequent user incentives. Perhaps the best examples ofthis are the many frequent flyer or user schemes used by airlines, train companies, car hire

companies etc.

Frequency Programmes offer consumers discounts or free product rewards for repeat purchaseor patronage of the same brand or company.

Shoppers stop

Objective: reward the loyal customer. Shoppers stopstarted the First Citizens Club and enrolled customers as members of the

shoppers club by charging a fee of Rs.150. The customers were entitled to a variety of benefits by

collecting points.

Exchange offers

If a family bought a refrigerator 10 years ago and the machine is still giving reasonable servicethen the family is unlikely to buy a newer and more advanced version of the refrigerator unlessthey get rid of the older one by selling it to someon

Consumer durables market is the one where exchange offers are used the most. Almost all theTVs, Refrigerators, Washing Machines, etc. have exchange offers. e.

Samsung

On exchanging old TV for a new Samsung Plano, upto Rs. 5000 off. On exchanging old TV for a new Samsung Hitron Digital, upto Rs. 3000 off. On exchanging old refrigerator for a new Samsung refrigerator, upto Rs. 8000 off.

Factors deciding the success

1)Market conditions and complex schemes 2)Stagnant rate of consumption


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3)Similar schemes by competitors 4)Independent views of people

Trade Promotion

Hewlett Packard Promotion: Mystery shopper program Objective: to revitalize the distribution chain, audit retailers and the competitive situation. City: Delhi, Mumbai, Ahmedabad and many more Strategy: aimed at the dealers, the objective of this promotion was to revitalize the distribution

chain, audit retailer and competitive situation. Mystery shoppers visited the retail outlets to

ascertain merchandising and retailer-consumer interaction.

Display and advertising allowance

The retailer is required to arrange the product display in a prominent show-window or offerdiscount to consumers and advertise this offer in the local newspaper or arrange a point-of-

purchase display on the shelf corner. The retailer earns the incentive only after meeting the

conditions set by the manufacturer.

Merchandise allowance

In the form of free products packed with regular shipments, are payments to the trade forsetting up and maintaining displays. The payments are typically far less than manufacturers

would have to spend to maintain the displays themselves.

Some of the schemes operating in town are: Buy Cadburys products worth Rs.3000/- and get 30 any chocolates worth Rs.5 free. Buy a box of Munch and get 1 Munch free.

POP displays

Point-of-purchase displays i.e. product displays and information sheets are useful in reachingthe consumer at the point of purchase and often encourage retailers to support ones brand.POP promotions can help win precious shelf space and exposure in a retail setting. From a

retailers perspective, a POP display should be designed to draw attention to a brand, increase

turnover, and possibly distribute coupons and sweepstake entry forms.

Companies do P-O-P displays as and when they have sales promotion schemes going on.


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Some companies that do a lot of P-O-P displays on a regular basis are Gillette, Vicks, Duracell,Pepsi, Coke,Pepsi

Dealer loaders

A dealer loader is a premium that the manufacturer gives to the retailers for buying a certainquantity of a product. There are generally 2 types of dealer loaders buying loader and display

loader.

A buying loader is given to the retailer on purchase of a specified quantity of a particularproduct.

A display loader is the premium given to the retailer for the window display. After thepromotion period is over, the item or items, are given to the retailer as a free premium.

Incentives

Incentives to the members of the trade include a variety of tactics like awards in the form oftravel, gifts, or cash bonuses for reaching targeted sales levels that induce retailers and

wholesalers to give a firms brand added attention.

The incentive does not have to be large or expensive to be effective.Consumer-cum-Dealer-cum-Sales force sales promotions:

Nokia Promotion:perfect 10 contest Objective: to attract channel partners, salespersons., an prospective buyers City: 15 cities Strategy: the contest was three fold - for consumers, dealers, and sales personnel. A large

number of activities were organized. Dealer road shows, mass media consumer competition and

intensive merchandising were undertaken. Lucky draws were conducted and the participants get

to win some great prizes also.


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Uses of Sales Promotion

Immediate purchases

Increase trial

Boost consumer inventory

Encourage repurchase

Increase ad effectiveness

Encourage brand switching

Encourage brand loyalty

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what exactly is sales promotion

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