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Sales Promotions.pptx
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- 3. DEFINITIONS:- “Sales promotion consistsof a diverse collection of incentive tools, mostly short-term, designed to stimulate quicker and/or greater purchase of particular products /services by consumers or the trade”. • “ Philip Kotler” “Sales promotion is an organized effort applied to the selling job to secure the greatest effectiveness for advertising and for dealers”. • “ G.W. Hopkins”
- 4. CHARACTERISTICS • Salespromotion isusefulfor newaswell asexisting products. • They are marketingevents. • They are designed to have a direct impact on consumer’s behavior. • They are designed to influence consumers or marketing intermediaries. • Sales promotion has become the fastest-growing method of promotion.
- 6. LO1 OBJECTIVES OF SALESPROMOTION Type of Buyer Loyal Customers Competitor’s Customers Brand Switchers Price Sensitive Buyers Desired Results •Reinforce behavior •Increase consumption •Change purchase timing •Break loyalty •Persuade to switch •Persuade to buy your brand more often •Appeal with low prices •Supply added value Sales Promotion Examples •Loyalty marketing •Bonus packs •Sampling •Sweepstakes, contests, premiums •Price-lowering promotion •Trade deals •Coupons, price-off packages, refunds •Trade deals
- 7. TYPES OF SALESPROMOTIONS Consumer Sales Promotion Trade Sales Promotion Consumer market Marketing channel Drive immediate purchase Influence behavior Goal
- 8. TOOLS FOR CONSUMERSALES PROMOTION Coupons and Rebates Premiums Exchange Scheme Contests & Sweepstakes Free Samples Installment Sales
- 9. Samples are atrial of a product. This is generally the most powerful form of promotion for “new products”. It simply means offer of a free product or service. 1. SAMPLES
- 10. Coupons are acertificate which offer price reduction to consumers for specified items. Coupons bear a date of expiry and can't be redeemed after the cut off date. 2.COUPONS
- 11. 3.CONTESTS Consumers contests areorganized to attract the participation of awidely scattered consumers'base.
- 12. 4.EVENT SPONSORSHIP Events likeTV shows, matches and sitcoms are sponsored by various products to increase demand.
- 13. 5.SWEEPSTAKES It gives customerschance to win like scratch and win offers. The winners are determined by a drawing from all entry forms.
- 14. 6.PREMIUM(GIFTS) Apremium (gifts) isareward given to the customers for purchasing aproduct. Premiums are offeredat low costor for free.
- 15. 7.CASHREFUND It is aschemein which customers are promised to get refund of money on submission ofcash memo of theproduct.
- 16. SevenMost PopularConsumer PromotionTechniques S.NO. NAMEOFTECHNIQUES 1COUPONSIN RET AILADS 2 IN-STORECOUPONS 3 REFUNDS 4 DISPLA YS 5 SAMPLES 6 PRMIUMS 7 SWEEPST AKES
- 17. TRADE/MIDDLEMEN PROMOTIONS Cash Bonuses Stock Return CreditTerms Dealer Trophies Dealer Contests
- 18. 1.DISCOUNT It is alsoknown asprice-off. Thediscount isprovided on the basesof amount of purchase by the whole seller or retailer.
- 19. 2.Allowance In this methodallowances are offered towholesalers and retailers for purchasing or promotion specific products.
- 20. 3.TRADESHOWS In this schemevendors display their products. These trade shows are organized by industry trade associations.
- 21. 4. FREEGOODS It isin the form of extra quantity of purchased product, "free”. Freegoods encourage sellersto stock more during promotionperiod.
- 22. 5. CashRebate It isan incentive that gives retail salespeople cash rewards for every unit of aproduct they sell. It is a monetary reward given to the salesforce of the dealers.
- 23. 6. DEALERSCONTEST • Thesearerun by the manufacturers to induce retailers and their salespeople to increasesales and to promoteproduct.
- 24. Advantages 8. Demand Creation 7. Product LifeCycle 1. Competitive Advantage 2. Increase In Sales 4. Specific Objectives 6. Goodwill 5. Reduced Costs 3. Brand Switching
- 26. DISADVANTAGES OF SALES PROMOTIONS ◦1. Increased price sensitivity- Consumers wait for the promotion deals to be announced and then purchase the product. This is true even for brands where brand loyalty exists. Customers wait and time their purchases to coincide with promotional offers on their preferred brands. Thus, the routine sales at the market price are lost and the profit margin is reduced because of the discounts to be offered during sale-season. ‘The Diwali Bonanza Offers’ on electronic goods. ◦ 2. Quality image may become tarnished- If the promotions in a product category have been frequent, the promotions could have a negative effect about its quality image. Consumers may start suspecting that perhaps the product has not been selling well, the quality of the product is true compared to the price or the product is likely to be discontinued because it has become outdated. The Smyle Powder offer of “Buy 1 and get 2 free” went on and on. Ultimately people stopped asking for the product as the on-going sales promotion strategy made the customers perceive it to be a cheap and an inferior product.
- 27. ◦ 3. Merchandisingsupport from dealers is doubtful- In many cases, the dealers do not cooperate in providing the merchandising support nor do they pass on any benefit to consumers. The retailer might not be willing to give support because he does not have the place, or the product does not sell much in his shop, or may be he thinks the effort required is more than the commission/benefit derived. ◦ 4. Short-term orientation- Sales promotions are generally for a short duration. This gives a boost to sales for a short period. This short-term orientation may sometimes have negative effects on long-term future of the organization. Promotions mostly build short- term sales volume, which is difficult to maintain. Heavy use of sales promotion, in certain product categories, may be responsible for causing brand quality image dilution.