How should sales promotion decision be

made?Guided by: Presented by:Prof. Sameer Mathur Smriti Mishra G.E.C Rewa

Sales promotion

• It consist of collection of incentive tools, designed to stimulate quicker or greater purchase of particular product.

Difference between advertising and sales

promotion Advertising offers a reason to buy a product whereas sales promotion offers an incentive.

Major decisions

• Establishing objectives• Selecting consumer promotion tools • Selecting trade promotion tools• Selecting business and sales force promotion tools• Developing the programs• implementing and evaluating the program

Establishing objectives• For consumers-Encouraging purchase of larger-sized unitsBuilding trial among nonusersAttracting switchers away from competitor

brands• For retailers-Persuading retailers to carry new itemsEncouraging off-season buyingBuilding brand loyalty• For sales force-Encouraging support of a new productEncouraging more prospective off-season sale

Selecting consumer promotion tools

Promotional planner should take into account• Type of market• Sales promotion objectives• Competitive conditions• Tool’s cost effectiveness

Main consumer promotional tools

•Samples- offer free amount of a product or service

•Coupons-certificates entitling the bearer to a stated saving on the purchase

•Cash refund offers- provide a price reduction after purchase

•Price packs- offers to consumers of savings off the regular price of the product, flagged on the label or package

•Premiums- products offered at a relatively low price or free as an incentive to purchase

• Frequency programs- programs providing rewards related to the consumer’s frequency and intensity in purchasing the products.

•Prizes- offers to win prizes or rewards as a result of purchasing something.

• Patronage awards- values in cash or in the forms that are proportional to patronage.

• Free trials- inviting purchasers to try the products without cost

•Product warranties- insurance against failure

• Tie-in Promotions- two or more brands or companies team up to increase pulling power.

•Cross-promotions-

using one brand to advertise another noncompeting brand

•Point of purchase- displays and demonstrations take place at the point of purchase

Selecting trade promotion tools

Major trade promotional tools• Price-off• Allowance• Free goods

•Price-off-discount off the list price on the products

•Allowance-amount offered in return for the retailers agreeing to feature the products in some way.

• Free goods- offers on buying certain quantity, flavour or size.

Selecting business and sales force promotional tool

• Trade show and conventions• Sales contests• Speciality Advertising

Trade show and conventions

• An exhibition for companies in a specific industry to showcase and demonstrate their new products and services

Sales contests

• Aims at inducing the sales force for dealers to increase their sales.

Speciality advertising

• Consist of useful, low cost items bearing the company name

Developing the program

• Marketers must first determine size of the incentive• Marketing manager must establish

conditions for participation• Marketer must decide on the duration of

promotion.• Marketer must choose a distribution

vehicle• Must establish total sales promotion

budget

Implementing and evaluating the program

• Preparing implementation and control plans that cover lead time for each individual promotion• Program can be evaluated

using sales data, consumer surveys, and experiments

Created by Smriti Mishra,G.E.C Rewa, during an internship by

Prof. Sameer Mathur,IIM Lucknow

www.IIMinternship.com