Sales Promotion2

Sales Promotion

Whereas advertising gives a reason to buy, SP gives an incentive to buyIt is part of the Marketing spend of all companies and these days SP spends in many companies exceed that of the adspends

SP is a push strategySince it is at the last point where the consumer is often at the point of buying, the additional incentive makes a last ditch effort to convert the customer on to the incentivised brand

Trade promotionLiquidating heavy inventoriesPersuade retailers to carry stock, carry more than usual stock, promote brand franchise

Consumer promotionStimulate purchaseInduce trialCreate new usersIncrease repurchase from occasional customersReward loyal customers

Forms of trade promotionBulk discountsFree materialsDisplay windowsShelf hiringLucky drawsMystery customerRedistribution incentivesShop salesmen incentives

Forms of consumer promotionFree samplesFree giftsCouponsIn-packsPrice packsPrice-offsSweepstakesBundling offers

SP spurs action because they are supposed to run for a limited time While the advertising budgets are controlled by the brand managers, SP budgets usually are controlled by the sales managers

The more the products quality and its advertising persuasiveness fail to meet competition, the greater is the need for promotion to improve the price value relationship

Promotion at different stages of the PLCIntroduction wise to use heavy promotion to induce trials and promote brand franchiseGrowth promotion should be limited ,if anyMaturity Higher promotions required since the brand is under attack from competitors or product quality or advertising effectiveness is tapering offDecline Heavy promotions. Used only to retain a set of loyal customers. Prior to withdrawal of the product, it could be used as a one time stock clearance from the trade

Essential elements for an effective SP programmeSignificant value before promotion is effectivePromotions must be part of an overall planEvery brand must have a promotion objective and a strategy statementA written tactical plan time frame, costs, evaluation yardsticksFactual knowledge must be gathered to planSpecialised professional skill and knowledge must be applied to every promotion operations

Final considerationsDont promote if the product is not goodPromotions rarely stop a declining sales curveIt is very easy to lose the promotional gains made if your promotion has not been effective in retaining new customers. So the product has to speak for itself.The objective of the promotion is to wean away users from competition and create new users.Excessive promotions lead to diminishing returns and may devalue the brand

ContdPromotions may be used in conjunction with advertising and other marketing communication toolsIt should be novel and attractiveEnsure supply lines are good and adequate stock is available right through the promotionCater for contingencies. Have escape routes built into the planTrade has to be handled tactfullyReimburse incentives/ rewards/ gifts promptlyMust be within the legal boundaries