Chapter 8 Sales Promotion 8-1 2005 Pearson Education

Chapter 8 Sales Promotion 8-1 2005 Pearson Education

Chapter 8 Sales Promotion 8-1 2005 Pearson Education Canada Inc. Sales Promotion Activity that provides special incentives to encourage immediate response from customers, distributors, and an organizations sales force. 8-2 Consumer Consumer Promotion Promotion

Incentives to stimulate purchase or loyalty. Trade Trade Promotion Promotion Incentives to encourage purchase and merchandising support by distributors. 2005 Pearson Education Canada Inc. Push and Pull Strategies Pull Marketer Marketer

Wholesaler Wholesaler Retailer Retailer Consumer Consumer Push A combination of push and pull works best! 8-3 2005 Pearson Education Canada Inc. 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 Promotion Objectives Competitive Activity Budget Target Market Profile 8-4 2005 Pearson Education Canada Inc. Sales Promotion Plans Marketing MarketingPlan Plan

Sales SalesPromotion Promotion Plan Plan Objectives Objectives Strategies Strategies Tactics Tactics Fulfillment Fulfillment 8-5 Other OtherIMC IMC Plans

Plans Advertising Advertising Strategy Strategy Evaluation Evaluation 2005 Pearson Education Canada Inc. Sales Promotion Objectives Consumer Consumer Promotion Promotion Trade Trade Promotion

Promotion 8-6 Trial Purchase Repeat Purchases Brand Loyalty Listings Sales Increases Merchandising Support 2005 Pearson Education Canada Inc. 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. 8-7 2005 Pearson Education Canada Inc. Logistics and Fulfillment 1. Involves decisions about dates, deadlines, and details. 2. A promotion must run seamlessly from the front-end (announcing the promotion) to the back-end (delivering prizes or merchandise to recipients). 3. Fulfillment is often outsourced to a specialist. 8-8 2005 Pearson Education Canada Inc. 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 8-9 2005 Pearson Education Canada Inc. Consumer Promotion Execution Coupons Coupons Media delivery Product delivery In-store delivery

A price-saving incentive to trigger new or repeat purchases. 8-10 Cross-product delivery 2005 Pearson Education Canada Inc. Consumer Promotion Execution Free Free Samples Samples Regular size Trial size In-store taste samples

Free product to encourage trial purchase. 8-11 On-site giveaway 2005 Pearson Education Canada Inc. Consumer Promotion Execution Contests Contests Sweepstakes Games Contests Instant Wins

Repeat purchase and loyalty-building incentives. They require advertising support to create interest. 8-12 2005 Pearson Education Canada Inc. Consumer Promotion Execution Cash Cash Rebates Rebates Single Purchase Offers Multiple Purchase Offers Slippage Occurs $ returned to consumers

after purchase has been made. 8-13 2005 Pearson Education Canada Inc. Consumer Promotion Execution Premium Premium Offer Offer In-pack Mail-in With purchase Product bundling An item given free or at a

discounted price with the purchase of a good. 8-14 Bonus packs 2005 Pearson Education Canada Inc. Consumer Promotion Execution Loyalty Loyalty Programs Programs Points programs Loyalty cards $ rewards

Incentives that encourage long-term loyalty; database management initiatives. 8-15 2005 Pearson Education Canada Inc. Trade Promotion A distributors loyalty to any suppliers 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. 8-16 2005 Pearson Education Canada Inc.

Trade Promotion Execution A variety of financial incentives are commonly offered to distributors. Trade Trade Allowance Allowance 8-17 Temporary price reduction to stimulate larger purchases. Performance Performance Allowance Allowance An additional allowance to

encourage merchandising support. Cooperative Cooperative Advertising Advertising An accumulating fund that supports retail advertising. 2005 Pearson Education Canada Inc. Trade Promotion Execution Some trade promotion incentives are controversial. Dealer Dealer Premium Premium

Spiff Spiff 8-18 An incentive offered a distributor to encourage a special purchase. Often called payola. Retail representatives are offered incentives to push a sponsors product line. 2005 Pearson Education Canada Inc. Trade Promotion Execution Some trade promotions support the personal selling effort and in-store merchandising programs. 8-19

Collateral Collateral Matrial Matrial Material used by sales reps in presentations (price lists, catalogues, brochures, CDROMs, etc.). Dealer DealerDisplay Display Material Material Point-of-purchase display material to encourage purchase (shelf pads, posters,

displays, etc.). 2005 Pearson Education Canada Inc. Planning the Promotion Planning is crucial. Sales promotions are complimentary activities that must be integrated with other marketing and marketing communications programs. 1. How frequent should promotions be? 2. What effect will promotions have on brand image? 3. Will promotions enhance brand equity? Tim Hortons RRRoll Up the Rim meets all of these considerations positively. 8-20 2005 Pearson Education Canada Inc.

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