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Chapter 8 Sales Promotion. Sales Promotion. “Activity that provides special incentives to encourage immediate response from customers, distributors, and an organization’s sales force.” . Incentives to stimulate purchase or loyalty. . Consumer Promotion.

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Chapter 8 Sales Promotion


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chapter 8 sales promotion
Chapter 8Sales Promotion

©2005 Pearson Education Canada Inc.

sales promotion
Sales Promotion

“Activity that provides special incentives to encourage immediate response from customers, distributors, and an organization’s sales force.”

Incentives to stimulate purchase or loyalty.

Consumer

Promotion

Incentives to encourage purchase and merchandising support by distributors.

Trade

Promotion

©2005 Pearson Education Canada Inc.

push and pull strategies
Push and Pull Strategies

Pull

Marketer

Wholesaler

Retailer

Consumer

Push

A combination of push and pull works best!

©2005 Pearson Education Canada Inc.

sales promotion planning
Sales Promotion Planning

“Developing a plan of action for communicating incentives to designated targets.”

Promotion plans are often devised by external specialists who are briefed on the assignment.

  • Market Profile
  • Competitive Activity
  • Target Market Profile
  • Promotion Objectives
  • Budget

©2005 Pearson Education Canada Inc.

sales promotion plans
Sales Promotion Plans

Marketing Plan

Other IMC

Plans

Sales Promotion

Plan

Objectives

Strategies

Tactics

Advertising

Strategy

Fulfillment

Evaluation

©2005 Pearson Education Canada Inc.

sales promotion objectives
Sales Promotion Objectives
  • Trial Purchase
  • Repeat Purchases
  • Brand Loyalty

Consumer

Promotion

  • Listings
  • Sales Increases
  • Merchandising Support

Trade

Promotion

©2005 Pearson Education Canada Inc.

sales promotion strategy
Sales Promotion Strategy

Promotion strategy involves selecting the right combination of consumer promotions and trade promotions to achieve the marketing objectives.

Strategy = Consumer Promotion + Trade Promotion + Advertising Strategy

Advertising is essential to create awareness and interest in the sales promotion.

©2005 Pearson Education Canada Inc.

logistics and fulfillment
Logistics and Fulfillment
  • Involves decisions about dates, deadlines, and details.
  • A promotion must run seamlessly from the front-end (announcing the promotion) to the back-end (delivering prizes or merchandise to recipients).
  • Fulfillment is often outsourced to a specialist.

©2005 Pearson Education Canada Inc.

measurement and evaluation
Measurement and Evaluation

Some typical yardsticks include:

  • Sales increases in promotion period
  • Trial and Loyalty (research may be necessary)
  • Number of entries in a contest
  • Redemption rates
  • Financial Payout

©2005 Pearson Education Canada Inc.

consumer promotion execution
Consumer Promotion Execution

Coupons

  • Media delivery
  • Product delivery
  • In-store delivery
  • Cross-product delivery

A price-saving incentive to trigger new or repeat purchases.

©2005 Pearson Education Canada Inc.

consumer promotion execution11
Consumer Promotion Execution
  • Regular size
  • Trial size
  • In-store taste samples
  • On-site giveaway

Free

Samples

Free product to encourage trial purchase.

©2005 Pearson Education Canada Inc.

consumer promotion execution12
Consumer Promotion Execution

Contests

  • Sweepstakes
  • Games Contests
  • Instant Wins

Repeat purchase and loyalty-building incentives. They require advertising support to create interest.

©2005 Pearson Education Canada Inc.

consumer promotion execution13
Consumer Promotion Execution

Cash

Rebates

  • Single Purchase Offers
  • Multiple Purchase Offers
  • Slippage Occurs

$ returned to consumers after purchase has been made.

©2005 Pearson Education Canada Inc.

consumer promotion execution14
Consumer Promotion Execution
  • In-pack
  • Mail-in
  • With purchase
  • Product bundling
  • Bonus packs

Premium

Offer

An item given free or at a discounted price with the purchase of a good.

©2005 Pearson Education Canada Inc.

consumer promotion execution15
Consumer Promotion Execution
  • Points programs
  • Loyalty cards
  • $ rewards

Loyalty

Programs

Incentives that encourage long-term loyalty; database management initiatives.

©2005 Pearson Education Canada Inc.

trade promotion
Trade Promotion

A distributor’s loyalty to any supplier’s products is influenced by the quality and quantity of trade promotion offers.

Distributors make money by buying and re-selling goods. Inventory turnover is very important.

©2005 Pearson Education Canada Inc.

trade promotion execution
Trade Promotion Execution

A variety of financial incentives are commonly offered to distributors.

Trade

Allowance

Temporary price reduction to stimulate larger purchases.

An additional allowance to encourage merchandising support.

Performance

Allowance

An accumulating fund that supports retail advertising.

Cooperative

Advertising

©2005 Pearson Education Canada Inc.

trade promotion execution18
Trade Promotion Execution

Some trade promotion incentives are controversial.

An incentive offered a distributor to encourage a “special” purchase. Often called “payola.”

Dealer

Premium

Retail representatives are offered incentives to “push” a sponsors product line.

Spiff

©2005 Pearson Education Canada Inc.

trade promotion execution19
Trade Promotion Execution

Some trade promotions support the personal selling effort and in-store merchandising programs.

Material used by sales reps in presentations (price lists, catalogues, brochures, CD-ROMs, etc.).

Collateral

Matrial

Point-of-purchase display material to encourage purchase (shelf pads, posters, displays, etc.).

Dealer Display

Material

©2005 Pearson Education Canada Inc.

planning the promotion
Planning the Promotion

Planning is crucial. Sales promotions are complimentary activities that must be integrated with other marketing and marketing communications programs.

  • How frequent should promotions be?
  • What effect will promotions have on brand image?
  • Will promotions enhance brand equity?

Tim Hortons RRRoll Up the Rim meets all of these considerations positively.

©2005 Pearson Education Canada Inc.