sales promotion ppt2 by shumet demeke. (aausc)
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E2BAIS3 GROUP ‘C’ STUDENTS
ADDIS ABABA UNIVERSITY SCHOOL OF COMMERCE
DEC,29/2013
ALL YOU NEED TO KNOW ABOUT
SALES PROMOTION
Principles of Marketing
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WHAT IS SALES PROMOTION?
Set of marketing activities undertaken to boost sales of the product or service.
It describes incentives and rewards to get customers to buy now rather than later. . Means to give short term incentives to encourage purchase or sale of a product or service (AMA)
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Purpose of Sales Promotion
Yield faster, more measurable results in salesStimulate consumer trialAttract new triers or brand switchersReward loyal customersIncrease repurchase rate of occasional usersEnhance Brand Image
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Sales Promotion Vs Other Promotional tools
In order to understand the basic role and function of sales promotion, one must differentiate between sales promotion and other components of the marketing mix.
Sales promotion usually operates on: a short timeline (temporarily), uses a more rational appeal, returns a tangible or real value, fosters an immediate sale, and contributes highly to profitability. The reasonable, practical and functional desirability
of a product or service to a potential consumer
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Main objectives of Sales Promotion
To introduce new products or services:To attract new customersTo induce existing customers to buy moreHelps the firm to remain competitiveTo increase sales in off-seasonsTo add to the stock of the dealers
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Advantages of Sales Promotion
Can be viewed from two point of views
Manufacturers helps to increase sales in a competitive market
and thus, increases profits;helps to introduce new products in the market by
drawing the attention of potential customers; When a new product is introduced or there is a
change of fashion or taste of consumers, existing stocks can be quickly disposed off;
It stabilizes sales volume by keeping its customers with them
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Advantages…Con’tconsumers
the consumer gets the product at a cheaper rate;
It gives financial benefit to the customers by way of providing prizes and sending them to visit different places;
The consumer gets all information about the quality, features and uses of different products;
Certain schemes like money back offer creates confidence in the mind of customers about the quality of goods
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Disadvantages of Sales Promotion
Increased price sensitivityQuality image may become discolored
Dealers forward buy and divert stocks
Merchandising support from dealers is doubtful
Short-term orientation
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Major tools of Sales Promotion
•To increase the sales of a product, the producers or manufacturers use various tools of sales promotion.
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MAJOR TOOLS ……CON’T
Consumer Sales Promotion
Directed to consumers of goods and service
Trade Sales
Promotion Directed to distributors and retailers
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Consumer Sales Promotion
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Trade Sales Promotion
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Objectives, Merits & Demerits of TSP
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MAJOR DECISIONS IN SALES PROMOTION
Establish ObjectivesSelecting the Appropriate ToolsDeveloping the ProgramPretesting, Implementing and Controlling the ProgramEvaluate Results
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1. Establishing Objectives
Objectives for Consumers• Purchase larger size units• Lead nonusers to trial• Attract switchers from competing brands
Objectives for the Sales Force• Encourage support of new products• Encouraging more prospecting• Stimulate off-season sales
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Establishing ….Con’t
Objectives for Retailers
•Carry new items in stock•Carry a higher level of inventory
•Off-season buying•Stock related items•Offset competitive promotions•Build brand loyalty•Enter new retail outlets
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2. Selecting the Appropriate Tools
Consumer Promotion Tools
•Manufacturer Promotions•Retailer Promotions•Consumer-Franchise Building Promotions
•Non-Consumer-Franchise Building Promotions
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3. Developing the Program
• Integration of various tools• Factors:
• Size of Incentive• Conditions for Participation• Duration• Distribution • Timing• Total Sales-promotion Budget
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4. Pretesting, Implementation & Control
•Pretesting is important to ensure efficacy of promotion tools
•Implementation • Lead time: preparation prior to launch
• Sell-in time: begins with promotional launch and ends when 95% of merchandise is distributed to consumers
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5. Evaluation of Sales Promotion
•Brand switching•Repeat purchasing•Purchase acceleration
•Category expansion
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Some local Examples on Promotional tools
1) Consumer Oriented Promotion COMPANY/ORGANIZATION NAME
PRICE DEAL Local Boutiques
CONTESTS/SWEEPSTAKES
SPECIAL EVENTS
PREMIUMS
CONTINUITYPROGRAM
SAMPLING
2) TRADE ORIENTED PROMOTIONS
POINT-OF-PURCHASE (POP) DISPLAYS
TRADE SHOWS
PUSH MONEY
DEAL LOADERS
TRADE DEALS
BUYING ALLOWANCES
ADVERTISING ALLOWANCES
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THANK YOU!
Any Questions?