salespromotion

8/12/2019 salespromotion

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SALESPROMOTION

RAHULFANTASIA


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AN OVERVIEW

SALES PROMOTION DIFFERENT KINDS AND TOOLS TO DETERMINE SP OBJECTIVESFIX BUDGETS STEPS IN DESIGNING A SPCAMPAIGN EVALUATE THE EFFECTIVENESSOF SP CAMPAIGN

RAHULFANTASIA


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Sales promotion Sales promotion is one of the fouraspects of promotional mix. (Theother three parts of the promotional

mix are advertising, personalselling, and publicity/publicrelations.)


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Media and non-media marketing

communication are employed for a pre-

determined, limited time to increaseconsumer demand, stimulate market

demand or improve product availability.

Examples include:

contests

point of purchase displays

rebate (marketing) free travel, such as free flights


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Sales promotion consists of a diversecollection of incentive tools, mostlyshort term, designed to stimulatequicker and/or greater purchase of aproduct/service by consumers or thetrade

RAHULFANTASIA

PHILIP KOTLER


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SP IN THE INDIAN CONTEXT Indian market place has seen a sea change

over the last two decades.

Consumer is truly the king.

Most marketers are interested in short-term

results.

Ads becoming less effective comparing with

sp.


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Title

content


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Advantages and Disadvantages of

SP

AdvantagesProduces results.

Pruduces immediate results.

Prevent competitor entry or offset

competitor promotions and thus help

maintain the brands current market share.

Rupee-for-rupee immediate and measurable

results can be produced.

Gain channel support.

Easy to design and implement.

Relatively inexpensive.

Help build database.(mail-in-coupons or

contest forms).

DisadvantagesExcessive use canshift the focus on

Short term marketing planning.

Excessive use can erode the brand

equity.Increasing sales promotion activity

has led to clutter.

In mature markets sp doesnt do

much in attracting new customers but

only switchersBoth consumers and trade can

engage in forward buying, ie stocking

up.

Some sp techniques can be abused

by the trade as well as consumers.


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SP and Consumer behaviour:

Sales promotion can be targeted to:-

1. consumers of the product2. Trade of the product

3. Sales force which promote the product


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push and pull strategies:

Pull strategy:

In this the attempt is to get the consumer

to the retail outlet to ask for and buy the

product.

Push strategy:

In this the attempt is to get the trader to

stock sufficient product through the sales

force intervention and also to induce the

consumer to buy at the retail level.


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Types of sales promotions: Consumer promotions:1. Sampling: giving samples of products especially when a

product is being introduced for the first time.2. Price-off : less than MRP.

3. Quantity deals: eg: 30% extra on same MRP.

4. Banded offers: mixing of 2 products and giving it for less

price. Mainly this can be one fast moving and one slowmoving products.

5. In-product gift: teaspoon in a detergent pouch, etc.

6. Out-product gift: bowl with cerelac,etc.

7. Coupons: AVT containing cash coupons inside used for

next purchase reduced price.

8. Trading stamps: a stamp for this much purchase etc(in

large retail shops)

9. Consumer contests: completion of sentences etc.


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Trade promotions:

1. On consignment sales: pay only when the product

moves.

2. Dealer contests:

3. Dealer gifts:

4. Display contests: ITC5. Point-of-sale material: cadbury gives attractive

dispensers.

6. Shop board painting: ITC, chandrika soap, Tide etc.

7. Dealer discounts: buy 10 get one free, etc.8. Trade fair participation:

9. Dealer meets:

10. Cooperative ads.: sharing the ad. Cost.


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Sales force promotions:

1. Incentive schemes: bonuses, etc.

2. Star awards: as in insurance field f.cs are given attractive

awards like visiting abroad, etc.

3. Sales meets: in some attractive places for their sales

force.

4. Local ad budgets: sales staff will be given the budget andwill negotiate with ad agencies and release ads.

5. Promotional aids: leather bags, T-shirts, caps, etc.


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Sales promotion objectives and budget

allocations:

Defining the sales promotionobjectives:

Examples:

To increase the sales by 30% during the last

quarter at the retail level.

or

To generate trial among a million consumers, whohave not tried the product so far.


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Understanding the sales promotion

audiences:

This is a very important objective to

understand the audiences of our product.

Eg: A baby food company wants to run a consumer offer of a bowl freewith a tin of product. Assume that the competitor has a similar offer

running and the marketing manager of the company believes that if heoffers a better bowl , say stainless steel as opposed to acrylic, the offer

is likely to be a hit and achieve the objective of having mothers switch

from the competing product or get new mothers adopt the product

right from the beginning.


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Methods of Determining sp budgets Determining the marketing budget is an important job of any

marketing manager.

Some common methods are:

1. Affordability method:

2. % of sales method: Allocate money based on what sales they expect

to achieve during an year.

3. Unit of sales method: Allocate a certain propotion of the cost of

product to promotion. Eg: if the cost of a product is Rs.100, the

company will allot Rs.10 towards promotion cost.

4. Zero budgeting: The company determines what needs to be

achieved in terms of sales and then reworks backwards in terms of

what money will need to be allocated to deliver those customers.


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esigning the sp programme

This essentially involves 3 steps:

Planning

2. Implementation and monitoring

3. Evaluation


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Selection of the SP toolsEg: Rasna spiderman campaign

Advertising the SPEg: Rasna spiderman ads.

Organisational issues in running a SP

campaignThe marketing chief of a company normally takes all decisions regarding

the running of a SP campaign. The design of the SP campaign is doneeither by the brand mgt team or a SP agency retained by the company

or both. They are responsible for determining the kind of SP that is

required, the budget thereof and the implementation issues.


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Evaluating the SP campaign

In running any SP campaign, it is imp. to evaluate at 3 basic stages:

before the commencement, during and after the campaign.

The objectives must be SMART(specific, measurable, achievable,realistic and time bound) so that they can be better evaluated.


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In a nutshell

SP is the process of engaging with the

consumer on a one to one to one basis with

the objective of stimulating sales.

SP is of 2: consumer & trade promotions.

Consumer promotion is a pull strategy as it

tries to get the consumer buy certain

products with attractive offers.

Trade promotion is a push strategy where the

trade attempts to push the products to the

consumer.


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