SALES PROMOTION & EVENT MANAGEMENT

IMC
Promotion Mix: tools for communicating with consumers & other stakeholders IMC: Careful coordination of promotion mix so as to deliver a clear, compelling & consistent message about the Brand, Product or the Company.

IMC

IMC
Digital Marketing

Viral / VoM

Special Events

IMC
Other Communication Elements Design / Packing Medium Used Message & Delivery

IMC
Need for IMC Changing Communications Landscape
Digital Interactive individual Communication empowerment

New Media Vehicles Less Broadcasting & more Narrowcasting

IMC
Need for IMC Need to mix traditional and modern media to amplify communication Varying sources of marketing message in an organisation Increased Crowd Sourcing leading to more listening & less talking

IMC
Lack of IMC Contradicting Claims Confused customers Unclear Brand position Poor CRM

IMC - Effectiveness
Cognitive formation of mental image, understanding and interpretation Affective affecting the mental feelings and emotions Conative intentions actions and behaviors

IMC - Effectiveness
Hierarchy Effects model
Awareness Knowledge Liking Preference Conviction Actual purchase

IMC - Effectiveness
MECCAS Means Ends Conceptualisation of components for advertising strategy promotion means to an end sales
Product attribute lightens skin Consumer benefit makes you beautiful Leverage point beauty brings success Personal values become successful Execution frame work

IMC - Effectiveness
AIDA
Awareness about the product and its benefits Interest in the product through customers ability to leverage the benefit Desire to use the product and succeed Action buying, using, benefiting & mouthing

SALES PROMOTION & EVENT MANAGEMENT

ADS COST AVG COAST REACH OBJECTIVE TYPE OF GOOD EFFI & EFFECTIVENESS SPEED TO OBJECTIVE SPEED TO REACH COMPLEXITY H L H AID CG L S F L SP H H H ACT All H F F H PS L H L AIDA Tech Goods H F S H DM L L L AID Tech Goods L S S L PR L L H Aware Corp H F F H VM L L H AID Corp/ All ? F F L EVE H H L AIDA All/ Durab H F S H

SALES PROMOTION

SALES PROMOTION
Promotions incentives used to entice a potential customer
Trade promotions incentives that members of trade channel use to entice another member to purchase goods for further resale targets being distributor, wholesaler, retailer, agent, broker. Consumer/ sales promotions incentives used by a member of trade channel to entice a customer/ consumer to purchase goods for final consumption

TRADE PROMOTION
Advantages
Stronger relations with trade channel Channel motivation push effect Promotes low involvement products Largest promotional spent Tool for demand management

TRADE PROMOTION
Disadvantages
Loss of profits addictive effect Channel clogging Short term effect Generally poorly synchronised with other promotion Leads to price wars

TRADE PROMOTION
Selection criteria
Type of product Competition & industry practice Company preferences Who needs to be motivated? Seasonal/ demand factors Cost involved Legal restrictions

Trade promotions
Types
Trade allowance Trade contest Trade incentives Training programs Vendor support programs Trade shows Specialty ads PoP ads

Trade promotions -

Trade allowance

Trade allowance financial incentives given to other channel members to entice them in to purchasing Types
Off invoice allowance Drop ship allowance Slotting fee Exit fee

Trade promotions Off invoice allowance:

Trade allowance

financial discount on invoice during a specific date & for specific volumes. Some time referred as bill back allowance No to be confused with cash discounts

Trade promotions Drop ship allowance

Trade allowance

Money paid to retailers who are willing to bypass the wholesaler/ agent/ broker etc Helps create a stronger retailer relation Financial savings for both Special attention from the retailer to you product line

Trade promotions Slotting fee

Trade allowance

Money paid to stock a new product Pays for the cost of carrying new goods Shoos away non serious introduction Insures against product failures Generates working capital

Trade promotions Exit fee

Trade allowance

Incentive used to remove/ replace an old item from list/ shelf Not widely used

Trade promotions-

Trade allowance

Disadvantages Trade allowances

Monopolistic behavior Discrimination Failing to pass the allowance to the customers Alteration of on deal Forward buying Diversion place of stocking Cross subsidy / re-dealing

Trade promotions- Trade contest

reward given to channel members to perform Also known as spiff money Uses non financial rewards, generally Done among the various members of the channel Usually keeps the ordering staff away Most widely used for lower level channel members

Trade promotions- Trade incentive

an incentive offered for performing a certain function Very similar to trade allowance Manufacture controls the function Promotes pushing of the product by retailer Types
CMA CSP PPA BHA Premium/ Bonus Packs

Trade promotions- Trade incentive - CMA

CMA Corporate Merchandising Agreements CMA with Price Breaks
Ideal to create trade incentive for specific marketing objective Allows manufacturers to plan long in terms of promotion and communication Allows retailer to calendar promotions Allows uniformity of margins as all brands are alternatively promoted

Trade promotions- Trade incentive - CMA

Trade promotions- Trade incentive - CSP

CSP corporate sales programs Manufacturer make the ready to display pallets Standardisation and control of the promotion is better Can be used for whole product line Ideal for warehouse retail formats

Trade promotions- Trade incentive - CSP

Trade promotions- Trade incentive - CSP

Trade promotions- Trade incentive - PPA

Producing Plant Allowance Allowed for retailers Availed for ordering a truck load from the plant Ideal for large product lines Eliminates transportation & scheduling trouble Eliminates distributors Ideal for large retailers

Trade promotions- Trade incentive - BHA

Backhaul Allowance The cost of transportation is paid by the retailer, who gets a discount for the order Cross doc/ Pedal run allowance Incentive for small chains that orders 1 truckload divided among its different stores, takes palettes of goods Premium/ Bonus pack Offering of free merchandise based on a minimum amount of order with in a specific date schedule

Trade promotions- Training program

Ideal for technically complex products A better learned sales staff promotes the product Done for the staff of the distributor Most widely used in services and industrial goods Eg: Microsoft/ Kirloskar/ Hero Honda

Trade promotions- Vendor Support Programs

Helps by supporting vendors sales activity Increased vendor turnover increases the manufacturers turnover too Generally used for specialty goods Single line store formats are most suited Two types
Bill back Cooperative advertising

Trade promotions- Vendor Support

Programs

Bill back

manufacturer pays for the special product displays, advertisements, price cuts etc. Cost is initially paid by the vendor and later reimbursed by the manufacturer Extreme localisation and adaptation possible Vendor becomes entrepreneurial Full price invoicing is possible, reimbursements can be written off as expenses

Vendor Support Programs

coop ad

advertising is jointly done by the manufacturer and the vendor Symbiotic relationship Do not advertising competing products Advertisement standard & message is generally controlled by the manufacturer Budget is generally set as a % purchase of the retailer Retailer may have cash flow blockages

Trade promotions- Vendor Support Programs coop ad

Trade promotions- Vendor Support

Programs

coop ad

Trade promotions- Trade Shows

Participation in exhibitions for certain category of goods/ services/ consumer groups etc Ideal for B2B promotions Helps in prospecting new customers High networking capacity Functions as a source of trade or competitive intelligence Can complete AIDA in single promotion for industrial capital goods

Trade promotions- Trade Shows

Trade shows strengthen the brand name Informal and low pressure business setting Specialty shows to suit your needs Types of customers
Education seekers Reinforcement seekers Solution seekers Buying teams Power teams

Trade promotions- Trade Shows

Geneva motor show Auto expo India Bangalore Air Show DSF Dubai travel and tourism fair WTM London book fair http://www.reedlatam.com/en/quickl inks_markets

Specialty Advertising
Includes small gifts & give away Constant reminders of the brand Given through the channel members Based on reciprocation principle Good gifts reinforces decisions Poor gifts can be counter productive Cultural angle to be probed Calendar, key chains, card holders. Part of collateral marketing

Trade promotions- Specialty Advertising

Trade promotions- Pop Advertising

displays, signs, structures, & devices used to identify or advertise the merchandise, an outlet, product or service Works as in store trigger 70% of brand decisions are made in store due to brand parity High recall 50% of buyers recall the PoP Aids impulsive buying Last chance to reach the customers Some times used with POS cash register

Pop Advertising

Objectives of Trade Promotion

Obtain initial distribution Obtain prime shelf space or location Supporting established brands Countering competition Increase order size Increase order size Build retailer inventory Reduce manufacture incentives Enhanced channel relation Enhancing IMC program

Problems in TP
Inability to synchronise with IMC Conflicting internal objective Conflicting external objective Irreversible impact on brand image Low involvement of Top/ Strategic management Multiple retailing formats Herd mentality

Consumer Promotion

Consumer Promotion
Consumer Promotions called Promotions/ sales promotion/ product promotion by commoner Incentives aimed at a Firms customers. Directed towards the end customer. It might be for individuals /Organization but not for resale purpose.

Consumer Promotion
Promotes Action Always used in Conjunction with Ads Increases store traffic significantly. Used more as a differentiator for the Brand. Increases awareness but reduces Brand equity.

Consumer Promotion
INTRODUCTORY STAGE
Increases awareness Induce purchase opportunities

GROWTH STAGE
Increases consumption Fend off competition Find newer customers

DECLINE STAGE
Maintain Purchases

Consumer Promotion
TYPES: Coupons Premiums Contests & sweepstakes Refund & rebates Sampling Bonus Packs Price Offs

Consumer Promotion -

Coupons

COUPONS Price reduction offer to a customer. Very low redemption ( 1 % in U. S ) Distributed through print media , FSI ( Free standing Packs ) , Product Pack Constant reminders even when not redeemed

Consumer Promotion -

Coupons

TYPES OF COUPONS Instant redemption coupon Bounce back coupons- Placed inside packs. Cross ruffing Coupon for one product on another product Response offer coupons given on request by consumers.

Instant redemption coupon

Bounce back coupons

Cross ruffing

Response offer coupons

Consumer Promotion -

Coupons

PROBLEMS OF COUPONS Reduces revenues Mass Cutting Illegal redemption Counterfeiting Misredemption.

Consumer Promotion -

premium

Prizes , gifts or other special offers consumers receive when purchasing products Realizes full product price Improves Brand image.

Consumer Promotion TYPES

premium

Free in the- mail : Mail proof & get the gift . In/On pack Premiums : Gifts/Tags on the pack. Store/ Manufacture Premiums : Given when customer buys a product Eg Happy meal , Soft toy Self liquidating premium.

Free in the- mail

In/On pack Premiums

Consumer Promotion Problems Time factor Short Life May go out of fashion fast Cost associated .

premium

Consumer Promotion & Sweepstakes

Contests

Contests Needs a participants to perform certain activity eg: slogan writing/ winner prediction Needs some kind of a skill May need a product purchase to enter No multiple entries generally allowed

Contests

Consumer Promotion & Sweepstakes

Contests

Sweepstakes No activity requirements Based on probability Multiple entries allowed Need not purchase a product, entry may be differently sold The winning to total ticket is usually pre decided

Sweepstakes

Consumer Promotion & Sweepstakes

Contests

Values Extrinsic money value Intrinsic value associated with competing

Consumer Promotion & Sweepstakes

Contests

Problems Costs ads, prizes, processing, administration, retailer activity, retailer compensation Consumer indifference clutter

Consumer Promotion & Rebates

Refunds

Cash returns offered to a consumer following the purchase of product Full price purchase is made Proof is sent across Refunds a portion of the purchase cost Refund on soft goods food/ clothing, small value Rebate on hard goods automotives/ appliances, large value

Refunds & Rebates

Consumer Promotion & Rebates

Refunds

Problems Low redemptions are seen Too cumbersome Too much documentation Reduced impact due to price reducing the rebate

Consumer Promotion Sampling

Actual delivery of the product to consumers for their use or consumption Promotes product trial Ideal for B2B consumers Highly effective in service sector salons/ hospital/ restaurant

Consumer Promotion Sampling

Types
In store ideal for food Direct mailed to the user Response given to the respondent Cross ruff sampling one product with another FSI/ Media invited media effect Professional doctor/ painter. Selective in selected events, localities, outlets eg: gym/ muscle protein

In store

Direct mail samples

Professional

Consumer Promotion Sampling

Problems Costs Special developmental needs Pilferage is high Media cost

Consumer Promotion pack

Bonus

Additional / extra number of items are placed in a special product package Increases product usage Blocks/ preempts competition Stock pile the product Develop loyalty Ideal at decline stage for establishes brands Attract price sensitive users Encourage brand switching in case of brand parity

Bonus pack

Consumer Promotion pack

Bonus

Problems Not ideal for constant consumption product Consumer perception is extreme

Consumer Promotion
Temporary reduction in prices

Price Off

Also called off Generally printed on product, PoP, built in the billing system Definitely passed on to customers Ideal for stimulating sale of an existing product Some times retailer induces price offs

Price Off

Consumer Promotion

Price Off

Problem Increased impact on margin 20% increase in sales for 5% reduction in prices Thus widely misused Affects brand image severely eg: Nycil/ Dermicool

Other Practices in SP
Use of Overlay i.e. use of multiple promotion in one go. Eg; sampling with coupons Tie In use of one brand for promoting another brand eg: Annapurna atta for Knorr soups Inter company Tie Ins eg: fly Air India & avail 30% off at Taj

Overlay

Inter company Tie Ins

Planning for Promotion

Understand the customer Understand the product category Understand the brand image & positioning Understand competition Understand the product category/ brand promotion requirement

Characteristics of a successful SP
Complements the IMC Gives Synergestic effect to IMC Consistent with brand image PLC synchronised Creates intrinsic value for the brand Reduce price sensitivity of the brand High visibility, innovativeness and impact

Characteristics of a successful SP
Increase brand loyalty Long term oriented Customer specific Low cost
Use of technology Co- branded

Characteristics of a successful SP
Increase store traffic Increase store sales and traffic Attract new customers Increase store loyalty Increase channel commitment Support future activities