Sales Promotion
SALES PROMOTION
MKT 3310 Lecture 9, 2012
1
Lecture objective By the end of today’s class you should:
• understand the role of sales promotion in a company's integrated marketing communications program.
• understand the different types of consumer and trade-oriented sales promotion tools, and the reasons for using them.
2
Lecture format
• Defining
sales promotion, types of sales promotion • Strengths and weaknesses of sales promotion
• Exercise
•Sales promotion and consumer behavior
•Sales promotion aimed at distributors
•Key learning points from the lecture
3
DEFINING SALES PROMOTION
“A direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or the ultimate consumer with the primary objective of creating an immediate sale.”
An extra incentive to buy
A tool to speed up sales
Targeted to different parties
4
Types of Sales Promotion
Consumer-Oriented (i.e. pull) Distributor-Oriented (i.e. push)
Samples
Coupons Premiums (i.e. free gifts) Premiums Contests/sweepstakes Refunds/rebates
Sales contests Contests, dealer incentives
Trade allowances Point-of-purchase displays Training programs
Trade shows Trade shows
Cooperative advertising
Bonus packs Packs
Price-off deals Frequency programs Loyalty programs Demonstrations
5
6
Sales Promotion Strengths
– gives an extra incentive to act, because it changes the price/value relationship – gives a sense of immediacy to act – encourages a behavioral response – builds databases – motivates trade support – produces measurable results, at least in terms of behavioral response
7
Sales Promotion Weaknesses
– clutter – if a price cut is used, consumers may expect it for the long term i.e. some consumers won’t buy except on price deal – forward buying/cheating by the trade – fraudulent coupon redemption – sometimes it is difficult to get trade cooperation to support the sales promotion campaign –
MKT 3310 Lecture 9, 2012
1
Lecture objective By the end of today’s class you should:
• understand the role of sales promotion in a company's integrated marketing communications program.
• understand the different types of consumer and trade-oriented sales promotion tools, and the reasons for using them.
2
Lecture format
• Defining
sales promotion, types of sales promotion • Strengths and weaknesses of sales promotion
• Exercise
•Sales promotion and consumer behavior
•Sales promotion aimed at distributors
•Key learning points from the lecture
3
DEFINING SALES PROMOTION
“A direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or the ultimate consumer with the primary objective of creating an immediate sale.”
An extra incentive to buy
A tool to speed up sales
Targeted to different parties
4
Types of Sales Promotion
Consumer-Oriented (i.e. pull) Distributor-Oriented (i.e. push)
Samples
Coupons Premiums (i.e. free gifts) Premiums Contests/sweepstakes Refunds/rebates
Sales contests Contests, dealer incentives
Trade allowances Point-of-purchase displays Training programs
Trade shows Trade shows
Cooperative advertising
Bonus packs Packs
Price-off deals Frequency programs Loyalty programs Demonstrations
5
6
Sales Promotion Strengths
– gives an extra incentive to act, because it changes the price/value relationship – gives a sense of immediacy to act – encourages a behavioral response – builds databases – motivates trade support – produces measurable results, at least in terms of behavioral response
7
Sales Promotion Weaknesses
– clutter – if a price cut is used, consumers may expect it for the long term i.e. some consumers won’t buy except on price deal – forward buying/cheating by the trade – fraudulent coupon redemption – sometimes it is difficult to get trade cooperation to support the sales promotion campaign –