sales promotion

Sales Promotion

The wonders and the wounds

Promotion Mix / Communication Mix (PR) Sales Promotion PR Selling Advertising

Below the line Above the line

Two Types of Sales Promotion Consumer Promotion Trade Promotion

What do we want the consumers and trade to do? Buy More Buy Now

A sales promotion should be Temporary – if not the consumers

would not believe it the next time Great Value Added – they should

find reason to buy now and more

Trends on Sales Promotion ¾ of the marketing budget is allocated to

sales promotion In 1995, 51% of total adspend represents

trade promotions. 24% on media spending 22% on consumer promotion

Growth in the coupon segment is tremendous in aspirational markets Americans redeem more than 7 billion

coupons annually.

Why the Growth??? Instant results Faster implementation Measurable Relatively easy and inexpensive

The Downside of Sales Promotion Brand Erosion Profitability increase is relatively

low Implementation cost and problems Orients marketing managers

towards short term results

What a sales promotion should be…. Lets go back to the basics Should hit the consumer at a particular

behavioral stage Are marketing communication activities

that change the price/value relationship of a product / service perceived by the target Generating immediate sales Altering long term brand value

Planning Sales Promotion Who is our target set of

consumers? What is the reason for that

behavior What is the goal of the program Is there a meaningful economics

attached to sales promotion

Types of Buyers Loyals

Buy a particular brand on a more or less consistent basis

Competitive loyals People who are loyal to the competing brand

Switchers Purchase of various brands in one category

Price buyers Non Users

Results that are needed …. Loyals

Reinforce behavior Increase consumption Change buying timing

Competitive loyals Break loyalty Encourage brand switching

Switchers Persuade to buy the “right” brand more often

Price Value added to make price less important

Non users Create awareness, create category worth

Types of Sales Promotions Coupon Bonus Packs In pack, On pack, and Near Pack Specialty container Continuity program Refund Sweepstakes Contest Through the mail Premium Sampling Price off Trade deal Cause related promotion

Coupons Clip and bring to

the store to exchange

Now it is phone based

Induce loyalty Repeat purchase Keeps the

consumers “locked”

Bonus Packs Like bundle

pricing but this is temporary

Adds value

In Pack, On Pack Promotion

It is used to introduce new products / service

Dispose of excess inventory

Use excess overhead

Specialty Container Increases

product’s perceived value

Uy tignan mo ito meron libreng pitchel

Continuity Program /Loyalty Cards

Refund / Rebate Promotion If the product does

not perform, then its money back

Or consume X number of products and get Y FREE

Increases consumer confidence

Loyalty program

Sweepstakes Chance game

where the consumer has the chance to win something big through purchases

The more purchases, the more tickets

Creates loyalty

Sampling Used when the

consumer is unaware of the brand or product

Product buying is prone to retail channel based trial

Use when the product can be broken down into smaller dimensions

Price off promotion Use for slow

moving items Excess

inventory Off season Dislodge

competitors

Choose the right promotion for the right situation

ExampleProblem Solution

New product Sampling, on pack promo

Consumers not loyal Rebates, sweepstakes, loyalty cards

Competitors are attacking the market with ads

Price off, free goods, premiums, rebates, etc

Excess inventory

Shelf life is critical

Consumer Promotion To induce immediate off take from

the shelf To induce trial To buy more of your products To buy immediately

Trade Promotion Encourages your trade channel to

load up Move inventory from the company

to the warehouse of the trade Distributor or Key Accounts

Deals with promotional tools for staff and sales people who are involved with the trade.

Sell in (PUSH STRATEGY) Trade Promotion based on

Volume – buy a certain volume to attain a high discount

Prompt Payment – pay on time and get a discount

Free goods – using new products or slow moving products as promotional items

Volume Promotion It motivates the dealer to buy

more Example

10+1 promotion – buy 10 boxes get one free

Volume discounts Bundle promotion – feature a new

product as freebie

Advertising Promotion Cooperative advertising

Coke and Julie’s Bakeshop Lock in to the outlet to exclusively

sell your brand

Cooperative Promotion Co-brandingCo-branding Using another Using another

brand to brand to penetrate the penetrate the marketmarket

Good if the Good if the equity of the equity of the other brand is other brand is high or parallel high or parallel

Co-branding Can be a strategy

or a promotion It increases margin Synergizes

strength of two brands

Increases profitability due to the higher value perception

Free Goods Better

profitability Moves higher

volume Economies of

scale

Trade Advertising Advertisements used as a basis

for booking sales Rationale is consumers will look

for a brand that has ad support

Massive advertising always leads to higher trade acceptance

Trade will only stock items that will sell

Personal Selling

Direct SellingDistribution SellingOutlet Selling

Direct Sales One of the recent

trends in consumer marketing

Direct hit to consumers

Smaller ad spending

Direct sales Uses human capital as resource Offering high earnings to those

who do not have businesses Home based People get people strategy Very sound business model

How do they profit? Gross Margin 40% 1st level Commission – 10% 2nd level commission – 8% 3rd Level commission – 5%

AT this point, the company still earns and yet the number of networks grow….

Direct Sales Meaningful to sales people The consumer saves money Answer to the crisis of power of

retail channels

Distribution Selling Sales efforts to cover geographic

region Cover relevant distribution

channels

Example: Bonheur Marketing

Bonheur Marketing Former exclusive distributor of

Marlboro and Philip Morris Covers outlets such as

Supermarkets Sari sari stores Sub distriutors Dealers Luzon wide

BiC became better when… Distribution was assigned to

FilStar – an affiliate of National Bookstore

That’s why BiC enjoys great retail presence in NBS

Public Relations

Advertising

Key things to remember Creative brief Copy strategy Execution methods Media Media Planning Success tracking

Creative Brief Brand elements Target segment Reason to buy Current behavior Current perception Desired impression

Copy Strategy Tagline Plot Mood and Tone Reason to believe Execution Media Media Plan

Media Plan Medium

Above the line Below the line

Loading Front Back Seasonal Flat

Media TVC Print Radio Internet

CPM (clicks per million) Ad click Ad impressions Banner or button advertisement Click through Cost per click Spam URL

Media Billboard – of course they will stay Mall panels Comfort ads Transit ads Non traditional

Corporate gifts Leaflets

Media Plan Using each medium optimally to

achieve brand objectives It is all about making the right mix

or right allocation of budgets Hitting consumers where it

matters most

Executions Humor MTV Slice of life Celebrity endorser Testimonial Image model – can be a competent

looking person Performance test

Just make sure they do not… Laugh and forget which brand is

being advertised Remember the story in the ad and

then forget about the brand Remember the song and then…

ano nga palang brand yun?!

Things you should remember Matrix or charts or altering SWOT with

TOWS analysis (which by the way is not a marketing tool but a central management tool) DON’T BUY THE IDEA

The basics still work – and it will sans a few alterations

IMC is integrating all communication materials under one big idea

Remember Life is a journey of learning The moment you get cocky is the time

you die Mistakes are best teachers Do not believe all teachers too… some

of them have issues as well… pick good mentors

Don’t label anything – good or bad Know thy Dharma – know what you are

here for

Remember Detachment is a great tool Make yourself competent – goal is

not to be employed but employable

Don’t make yourself stagnant – even if your family or husband is rich

Have FAITH

Remember PR competence is as important as

knowledge Be the best you can ever be (not

Alipin Sagigigilid all your life)

Thank you for such a wonderful semester… really