13-1 Copyright © 2009 Pearson Education Canada CHAPTER 13 Sales Promotion.

13-1 Copyright © 2009 Pearson Education Canada

CHAPTER 13

Sales Promotion


Learning Objectives

Identify the roles of various consumer and trade promotion activities in the marketing communications process

Outline the nature of various consumer and trade promotion activities

Assess the strategies for integrating sales promotions into the marketing communications mix


Activity that provides special incentives to bring about immediate response from:

Consumers,

Distributors,

Organization’s sales force.

Sales Promotion


Sales Promotion

Can be subdivided into 2 broad categories:

1. Consumer promotionsDesigned to stimulate purchases by consumers (ultimate

users)Help pull the product through the distribution channels focus on achieving trail purchase and repeat multiple

purchases and building brand loyalty.

2. Trade PromotionsDesigned to encourage distributors to purchase more

additional volume and provide encouraging merchandise support to stimulate consumer purchase.

Help push the product through the distribution channels


Sales Promotion Planning

In today’s environment, where planners consider an integrated marketing approach, sales promotions are not viewed as separate entities

Sales Promotions are planed at the same time to ensure that synergies are achieved across all forms of communications.

Promotion activity must complement the total marketing effort.


Sales Promotion Objectives

Objectives of consumer promotions focus on achieving:Trial purchaseRepeat or multiple purchasesBuilding brand loyalty

Objectives of trade promotions focus on:Selling more volume of merchandiseEncouraging merchandising support among channel members that buy and resell products.


Pull

MarketerMarketer ConsumerConsumerWholesalerWholesaler RetailerRetailer

MarketerMarketer ConsumerConsumerWholesalerWholesaler RetailerRetailer

Promotion Strategy

Push


Consumer Promotion – Pull Strategy

Pulls the product through the channel

MarketerMarketer DistributorsDistributors ConsumersConsumers

Objectives: Trial purchase Brand loyalty Multiple purchase


Coupons Free Samples Contests Cash Refunds Premium Offers Loyalty (Frequent- Buyer) Programs Delayed Payment Incentives Combination Offers

Types of Consumer Promotion Activity


Coupon Distribution


Objectives of Coupon Programs

Non-brand users to make trail purchase

Maintain current users

Speed up acceptance of a new product

Encourage current customers to repurchase the brand (build loyalty)

Attract users of competitive brands

Encourage multiple purchases

Increase seasonal sales


Coupons can be delivered to consumers in four different ways, by:

Product

Media

In-Store at the point-of-purchase

Electronically

Methods of Coupon Distribution


Average Redemption Rates by Method of Delivery


Free product distributed to potential users in a trial or regular size, effective for achieving trial purchase. In-store samples most common, plus:

Cross-sampling

Co-operative direct mail

Event sampling

Sample packs

Free Samples


Contests are designed and implemented to create temporary excitement about a product.

Sweepstakes

Games / Instant Wins

Successful contests have significant media advertising support.

Contests


Money returned directly to the consumer by the manufacturer after the purchase has been made.

Reinforce loyalty and multiple purchases

Slippage commonly occurs

Successful refund offers require strong P-O-P support

Cash Refunds (Rebates)


An item offered free or at a bargain price to encourage consumers to buy a specific product. It is usually offered three ways.

1. Mail-in

2. In/On Pack

3. Coupon Offer at P-O-P

Premium Offers


A frequent buyer program offers consumers a bonus, such as points or “play money.”

Canadian Tire Money

Club Z at Zellers and Bay

Shoppers Drug Mart’s Optimum Card

The goal is to encourage loyalty through repeat purchases.

Loyalty (Frequent-Buyer) Programs


Delayed Payment Incentives

Consumers are granted a grace period during which he or she pays no interest or principal for the item purchased.Leon’s “Don’t Pay a Cent Event”Home Depot

For renovations and household repairs, they offer six-month and one-year interest-free financing packages

This gives them a competitive edge over independent contractors who demand payment when jobs are completed.


Pushes the product through the channel

ConsumersConsumersMarketerMarketer DistributorsDistributors

Objectives: Secure listings Build sales volume Secure merchandising support

Trade Promotion – Push Strategy


Trade Allowance

Performance Allowance

Co-operative Advertising Allowance

Continued…

Trade Promotion Planning

Three basic objectives: secure a listing, build volume, and encourage merchandise support.


Retail In-Ad Coupons

Dealer Premiums

Collateral Material

Dealer Display Material (P-O-P)

Trade Shows

Branded Promotion Merchandise

Trade Promotion Planning (cont.)


In the packaged goods market there has been a steady shift toward trade promotion, largely due to:

Media Fragmentation

Demand for accountability

Buying-Power Concentration

Trends in Sales Promotion Planning


Promotion strategies must be integrated with other marketing communications activities. Strategic decisions must consider:

Frequency of Promotion Activity

Promotion/Product Relationships

Creative Strategy

Media Strategy

Sales Promotion Integration with Marketing Communications

13-1 Copyright © 2009 Pearson Education Canada CHAPTER 13 Sales Promotion.

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