sales promotionsamples coupons premiums contests/sweepstakes refunds/rebates bonus packs price-off...
TRANSCRIPT
Sales PromotionWeek 10
W. Rofianto, ST, MSi
An extra
incentive to buy
A tool to
speed up sales
An extra
incentive to buy
A tool to
speed up sales
Targeted to
different parties
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.”
Samples
Coupons
Premiums
Contests/sweepstakes
Refunds/rebates
Bonus Packs
Price-off deals
Frequency programs
Cooperative advertising
Trade allowances
Training programs
Contests, dealer incentives
Point-of-purchase displays
Trade shows
Sales Promotion Vehicles
Consumer-Oriented Trade-Oriented
Event marketing
Samples
Coupons
Premiums
Contests/sweepstakes
Refunds/rebates
Bonus packs
Price-off deals
Loyalty programs
Trade allowances
Training programs
Contests, dealer incentives
Point-of-purchase displays
Trade shows
Event marketing
Long-Term Allocations of Promotions
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
‘94 ‘95 ‘96 ‘97 '98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05
Consumer Promotions
Media Advertising
Trade Promotions
Percent of Total Promotional Dollars, 3-year Moving Average.
Growing power of retailers
Declining brand loyalty
Increased promotional sensitivity
Brand proliferation
Fragmentation of consumer markets
Short-term focus of marketers
Increased accountability
Competition
Clutter
Competition
Increased accountability
Short-term focus of marketers
Fragmentation of consumer markets
Brand proliferation
Increased promotional sensitivity
Declining brand loyalty
Growing power of retailers
Reasons for Increase in Sales Promotion
Reasons
To increase
consumption of an
established brand
To target a specific
segment
Enhance IMC
efforts and build
brand equity
To defend
(maintain) current
customers
To obtain trial and
purchase
To target a specific
segment
To defend
(maintain) current
customers
To increase
consumption of an
established brand
To obtain trial and
purchase
Objectives of Consumer-Oriented Sales Promotion
Objectives
The products are
of relatively low
unit value, so
samples don’t cost
much
The products are
divisible and can be
broken into small
sizes that can reflect
the products features
and benefits
The purchase
cycle is relatively
short so the
consumer can
purchase in a
relatively short
time period
The products are
of relatively low
unit value, so
samples don’t cost
much
The products are
divisible and can be
broken into small
sizes that can reflect
the products features
and benefits
Sampling
Sampling Works Best
When
Event sampling
Door-to-door
Direct mail
Central location distribution
In-store sampling
Cross-product sampling
Co-op package distribution
With newspaper/magazine
Internet sites
Event sampling
With newspaper/magazine
Co-op package distribution
Cross-product sampling
In-store sampling
Central location distribution
Direct mail
Door-to-door
Sampling Methods
Methods
Advantages and Limitations of Coupons
Advantages Disadvantages
Appeal to price sensitive
consumer
Can offer price break without
retailers coop
Can be effective way to induce
trial of new or existing
products
Can be way to defend market
share and encourage
repurchase
Coupons are often used by
loyal consumers who may
purchase anyway
Misredemption and fraud
Difficult to determine how
many consumers will use
coupons and when
Declining redemption rates
and high costs of couponing
Appeal to price sensitive
consumer
Can offer price break without
retailers coop
Can be effective way to induce
trial of new or existing
products
Can be way to defend market
share and encourage
repurchase
Coupons are often used by
loyal consumers who may
purchase anyway
Difficult to determine how
many consumers will use
coupons and when
Declining redemption rates
and high costs of couponing
Free Premiums:
Only require purchase of
the product
Self-liquidating
Premiums: require
consumer to pay some or
all of the cost of the
premium
Free Premiums:
Only require purchase of
the product
Premium: an offer of an item of
merchandise or service either free or at a
low cost that is an extra incentive for
customers
Premiums
Two Types of Premiums
Contests and Sweepstakes
Contest: a promotion where consumers compete for prizes or money on
the basis of skills or ability. Winners are determined by judging entries or
ascertaining which entry comes closes to some predetermined criteria
Sweepstakes/games: a promotion where winners are determined purely
by chance and cannot require a proof of purchase as a condition for entry.
Winners are chosen by random selection from a pool of entries or
generation of a number to match those held by game entrants.
Bonus Packs
Frequency/
Loyalty
Programs
Event Marketing
Price-off Deals
Refunds and
Rebates
Frequency/
Loyalty
Programs
Price-off Deals
Bonus Packs
Refunds and
Rebates
Other Popular Consumer Sales Promotion Tools
OtherPromotional
Tools
Summary of Consumer-Oriented Promotions and Market Objectives
Encourage retailers to
display
existing brands
Encourage retailers to
display
existing brands
Obtain distribution of new products
Maintain trade support for existing products
Build retail inventories
Maintain trade support for existing products
Obtain distribution of new products
Trade-Oriented Sales Promotion Objectives
Objectives
Trade ShowsTrade Shows
Contests and IncentivesContests and Incentives
Trade Allowances
Point-of-Purchase Displays
Sales Training Programs
Cooperative Advertising
Types of Trade-Oriented Promotions
Buying Allowances
Promotional Allowances
Slotting Allowances
Buying Allowances
Promotional Allowances
Trade Allowances
Point-of-Purchase Displays
Sales Training Programs Slotting Allowances
The Sales Promotion Trap
1 2
3 4