Chapter 8

Sales Promotion

8-1 ©2005 Pearson Education

 Sales Promotion
“Activity that provides special incentives to encourage
immediate response from customers, distributors, and an
organization’s sales force.”

Consumer
Consumer Incentives to stimulate
Promotion
Promotion purchase or loyalty.

Trade Incentives to encourage

Trade
Promotion purchase and merchandising
Promotion
support by distributors.

8-2 ©2005 Pearson Education

 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

 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

 Sales Promotion Plans
Marketing Other
OtherIMC
IMC
MarketingPlan
Plan
Plans
Plans
Sales
SalesPromotion
Promotion
Plan Advertising
Advertising
Plan
Objectives Strategy
Strategy
Objectives
Strategies
Strategies
Tactics
Tactics

Fulfillment
Fulfillment Evaluation
Evaluation

8-5 ©2005 Pearson Education

 Sales Promotion Objectives

• Trial Purchase
Consumer
Consumer
Promotion • Repeat Purchases
Promotion
• Brand Loyalty

• Listings
Trade
Trade
Promotion • Sales Increases
Promotion
• Merchandising Support

8-6 ©2005 Pearson Education

 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

 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

 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

Consumer Promotion Execution

• Media delivery
Coupons
Coupons
• Product delivery
• In-store delivery
• Cross-product delivery
A price-saving incentive
to trigger new or repeat
purchases.

8-10 ©2005 Pearson Education

Consumer Promotion Execution

Free
Free • Regular size
Samples
Samples
• Trial size
• In-store taste samples

Free product to
• On-site giveaway
encourage trial
purchase.

8-11 ©2005 Pearson Education

Consumer Promotion Execution

•Sweepstakes
Contests
Contests
•Games Contests
•Instant Wins

Repeat purchase and

loyalty-building incentives.
They require advertising
support to create interest.

8-12 ©2005 Pearson Education

Consumer Promotion Execution

Cash
Cash • Single Purchase Offers
Rebates
Rebates • Multiple Purchase Offers
• Slippage Occurs

$ returned to consumers
after purchase has been
made.

8-13 ©2005 Pearson Education

Consumer Promotion Execution

Premium • In-pack
Premium
Offer
Offer • Mail-in
• With purchase
• Product bundling
An item given free or at a • Bonus packs
discounted price with the
purchase of a good.

8-14 ©2005 Pearson Education

Consumer Promotion Execution

• Points programs
Loyalty
Loyalty
Programs
Programs • Loyalty cards
• $ rewards

Incentives that encourage

long-term loyalty; database
management initiatives.

8-15 ©2005 Pearson Education

 Trade Promotion

A distributor’s loyalty to any supplier’s 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

 Trade Promotion Execution
A variety of financial incentives are commonly offered
to distributors.

Trade
Trade Temporary price reduction to
Allowance
Allowance stimulate larger purchases.

Performance An additional allowance to

Performance encourage merchandising
Allowance
Allowance support.

Cooperative
Cooperative An accumulating fund that
Advertising
Advertising supports retail advertising.

8-17 ©2005 Pearson Education

 Trade Promotion Execution
Some trade promotion incentives are controversial.

An incentive offered a
Dealer
Dealer distributor to encourage a
Premium
Premium “special” purchase. Often
called “payola.”

Retail representatives are

Spiff
Spiff offered incentives to “push”
a sponsors product line.

8-18 ©2005 Pearson Education

 Trade Promotion Execution
Some trade promotions support the personal selling
effort and in-store merchandising programs.

Material used by sales reps in

Collateral
Collateral presentations (price lists,
Matrial
Matrial catalogues, brochures, CD-
ROMs, etc.).

Point-of-purchase display
Dealer
DealerDisplay
Display material to encourage
Material
Material purchase (shelf pads, posters,
displays, etc.).

8-19 ©2005 Pearson Education

 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