How Should Sales Promotion Decisions Be Made?

Kotler Chapter 17Aayushi Aggarwal IIT Kanpur

Sales Promotion Consists of a collection of incentive tools ,mostly short term, designed to stimulate quicker or greater purchase

How Should Sales Promotion Decisions Be Made?

6. Implementing and evaluating the program

5. Developing the program

4. Selecting business and sales force

promotion tools

3. Selecting trade promotion tools

2. Selecting Consumer promotion tools

1. Establishing objectives

1. Establishing objectivesFor Consumers Segments

For Retailers

•Building trail among non users•Attracting switchers away from competitor

•Encourage off-season buying•Building brand loyalty•Gaining entry to new retail outlets

2. Selecting Consumer Promotion Tools

SamplesOffer a free amount of a product or service building trail among non users

Free sample of MyTide bleach with Tide

CouponsCertificates entitling the bearer to a stated saving on the purchase of a specific product

In newspapers

RebatesProvide a price reduction after purchase than at the retail shop.

Consumer sends a proof of purchase to the manufacturer who refund part of the purchase by mail

Price Packs

Reduced price pack is a single pack sold at a reduced price

Banded pack : 2 related products banned together Eg. Toothpaste and Toothbrush

Premiums(Gifts)

Are items that are given free with the purchase of the product

Frequency ProgramsPrograms providing rewards related to consumer’s frequency and intensity in purchase

PrizesOffers of the chance to win cash,trips, or merchendise as a result of purchasing the product or service.

Patronage Awards

Values in cash or in other forms that are proportional to patronage of a certain vendor

Free TrailsInviting prospective customers to try the product without cost in hope that they will buy.

Product WarrantiesExplicit or implicit promises by sellers that the product will perform or the seller will fix it or refund the customers money within the specified time.

Tie-In promotionsTwo or more brand or companies team up on coupons,refunds and contests to increase pulling power

Wolverine movie and Red Robin tied in promotions together

Cross-PromotionsUsing one brand to advertise another noncompeting brand

Point-of-purchase Displays and demonstrations

P-O-P displays and demonstrations take place at the point of purchase or sale. Eg. Beds and cars (Test drive for cars)

3. Selecting Trade Promotion Tools

Trade

Price off Allowances Free Goods

Price off

A straight discount off the list price during a stated time period

Allowance

An advertising allowance is a dividend paid by a marketer to a reseller for advertising its product.

Free goodsOffers of extra cases of merchandise to intermediaries who buy a certain quantity

4. Selecting Business And

Sales Force Promotion Tool

Business and Sales force

promotion Tools

Trade Shows And Conventions Sales Contests Specialty

Advertising

Trade Shows And Conventions

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

Trade Fair in Delhi

Sales Contests

Aims at inducing the sakes force or dealers to increase their sales results over a period of time with prizes going to those who succeed.

Specialty Advertising

It consists of useful, low cost items bearing the company’s name. e.g key chains, ballpoint pens etc.

Developing The Program

Size

Duration

Incentives

Distribution Vehicle

Timing of the promotion

Total Sales Promotion

budget

5. Developing the programDetermine the size of incentive. A certain minimum is required for the promotion to succeed.

Incentives might be offered to everyone or to select groups

Decide duration of the promotion

A prize-off coupon can be distributed in a product package, in stores, online or by mail

6. Implementing and Evaluating the program

Implementation

Lead timeTime necessary to prepare

the program prior to launching it

Sell-in timeBegins with

promotional launch and ends when

almost 95% of the deal merchandise is

in hands of consumers

Evaluation

Sales Data

Consumers Survey

Experiments