Description
This presentation highlights topics like promotional matrix, objectives, classification, types, bonus, refunds, coupons, sampling, exchange offer, sale promotion process, budgeting and decision making
PROMOTINAL MIX
PROMOTIONS
Advertising Personal Selling Publicity
Sales Promotion
Each one is distinct and compliment each other
SALES PROMOTIONS
Short term incentives designed to stimulate quicker and / or greater purchase of a particular product by consumers / trade
GENERAL OBJECTIVES
? Induce Action ? Appeal to rational aspect ? Increase Sales on a short run
HOW THEY STACK UP
Advertising Sales Promotion
Short Term
Personal Selling
Short/Long Term Rational
Publicity
Time Frame Long Term
Long Term
Primary Appeal
Emotional
Rational
Emotional
Primary Objective
Image/Brand Sale Building
Sale/Relatio nship
Goodwill
SP – OBJECTIVES
? General Objectives
? Induce Action
? Appeal to rational
aspect
? Increase Sales on a
? Specific Objectives
? To stimulate use of new product ? To stimulate continued purchase ? To buy multiple units
short run
? To accelerate usage rates
? To defend / attack competition ? To liquidate inventory
SP CLASSIFICATION ? Where Targeted ? Who Runs
? Manufacturer
? Dealer ? Retailer
? Consumer
? Trade ? Sales force
• Objective
• Franchise Building
• Non Franchise Building
SALES PROMOTION - TYPES
PRICE OFFS
? Discount on Printed Price ( MRP )
•Commodity Product / Low Brand Loyalty •/ Impulse products /Price Sensitive Benefit clearly seen in monetary terms Challenge : What should be the discount %?
BONUS PACK
? Bonus Pack ? Additional Qty of same product - Horlicks ? More quantity at less than proportionate price ? Banded Pack ? Buy two take one free ? 3 for less price ? Sense of Urgency/Large Pack shift
REFUND & REBATE
? Promise of full or part money return ? Seen as a reward for purchase
? Preponement of Purchase
? Trial at no risk / Perceived Risk
? Used mainly in US
? Slippage Effect
COUPONS
? Discount on related/unrelated products ? Distributed Directly/Media/With Product
? Specific targeting possible
? Shifts attention from price hike ? Induces involvement in advertisement ? Mis use by retailers
CONTEST & SWEEPSTAKES
? “Interest” Promotions ? Trial run will be difficult ? Eg : Contest Cards, Conteststowin.com
PREMIUMS
? Another product with the purchased product
? Higher price possible ? Targeting Possible ? POP should be attractive ? Types
? In Pack/On Pack/ Container /Mail In ? Eg : Shakti Oil Mills plastic bucket
SAMPLING
? Door to door ( expensive ) ? Direct Mail ( pilferage ) – Colgate Story
? Media ( targeting ) – Pepsi Story
? Retail shopping centers – Sampoorna Story ? Retail Stores ( not free ) ? Trade Fairs / Exhibitions
EXCHANGE OFFERS
? Mainly for durables ? Creation of Replacement Demand ?
? Assessment / Evaluation Problems
? Own products or others as well ? ? Steamrolling / Cannibalization
? Long Term
CONTINUITY PROGRAMS
? Trading Stamps ? Store Continuity Plans ? Loyalty Programs / Club Memberships
? Eg : Little Pai/ Café Coffee Day/ Maruti offer in 1995
? Short Term
? The Bournvita Story (Card Games)
? Coolers ( Drinking Glass )
TYPES OF SP ( CONSUMER )
? Price Deals ? Price Packs ? Premiums ? Samples
? Refund / Rebates
? Coupons ? Contests/Sweepstakes
? Exchanges
? Continuity Plans
TRADE ALLOWANCES
? Off Invoice Allowance (Temp) ? Quantity Discount (Temp) ? Free Extra Goods
? Demo Unit Support
? Count Recount Allowance ? Slotting Allowance
SOME TERMINOLOGIES
? Baseline Sales
? Promotional Lift (Incremental Sales) ? Pass Through (how much of money in SP goes down
the channel?)
SALES PROMOTION PROCESS
Marketing Objectives
Sales Promotion Objectives
Selection of tools
Develop the program
Pre-testing
Implementation & Control
Evaluation
COMPONENTS OF SP
? Size of Incentive
? Conditions of participation ? Distribution Vehicle
? Duration
? Timing ? Budget
BUDGETING FOR SP
? All you can afford ? Percentage of Sales ? Competitor ? Historical Basis ? Objective and Task Method
SOME PITFALLS
? Promotion War
? Sales may fall when promo is off ? Quality / Price perception ? Pilferage Mis use ? Forward Buying ? Diverting
WHY THEY SPEND?
My Company
Cut back Maintain
We lose market share
Maintain
Same Market Share, Lower profits
Others
Cut back
Higher Profits For Everyone
We gain market Share
2 POSSIBLE LONG TERM EFFECTS
1. The Downward Spiral
Promotion
Sales
Aggressive Promotion
More Aggressive Promotion
Customers learn Competitors Competitors Wait for deals Competitors React React React
Time
2 POSSIBLE LONG TERM EFFECTS
2. The Upward Shift
Promotion 1
Promotion 2 Trade Stocks
Promotion 3 Customers Become loyal
Sales
Customers Try the prod
Time
PSYCHOLOGY OF SP
? Classical Conditioning Theory ? SP as a stimulus ? Instrumental Conditioning ? SP as a reward ? Object Perception ? Quality Deterioration ? Price Perception ? Price Deterioration ( Reference Price)
? SP as Dissonance Reducer ? Self Concept – Locus of Control ? SP as Risk Reducer ? Perceived Risk ? SP as magnitude reducer ( small SKUs) ? SP as deal clincher ? Deal Proneness ? Shift in time, place, frequency etc ? Demographics/Nature of Involvement?
PSYCHOLOGICAL EFFECT
CONSUMER DECISION MAKING
Involvement
High High
Complex Buying Behaviour
Low
Variety Seeking Behaviour
Brand Difference
Low
Dissonance Reducing Behaviour Habitual Buying
WHAT SP CAN NOT DO
? Change Negative Attitudes ? Reverse Declining Sales Trend ? Create Brand Image ? Make up for Insufficient Advertising
THE TRAGEDY OF SP
? Share of SP increasing in the budget
? CP+TP = 60% apprx & Advtg = 40% apprx
? People are becoming more deal prone ? Run faster & faster to stay where you are ? SP in all stages of PLC ? Evil to live with
? Legal Framework ? Consultants ? Entry in Curriculum
doc_924805124.ppt
This presentation highlights topics like promotional matrix, objectives, classification, types, bonus, refunds, coupons, sampling, exchange offer, sale promotion process, budgeting and decision making
PROMOTINAL MIX
PROMOTIONS
Advertising Personal Selling Publicity
Sales Promotion
Each one is distinct and compliment each other
SALES PROMOTIONS
Short term incentives designed to stimulate quicker and / or greater purchase of a particular product by consumers / trade
GENERAL OBJECTIVES
? Induce Action ? Appeal to rational aspect ? Increase Sales on a short run
HOW THEY STACK UP
Advertising Sales Promotion
Short Term
Personal Selling
Short/Long Term Rational
Publicity
Time Frame Long Term
Long Term
Primary Appeal
Emotional
Rational
Emotional
Primary Objective
Image/Brand Sale Building
Sale/Relatio nship
Goodwill
SP – OBJECTIVES
? General Objectives
? Induce Action
? Appeal to rational
aspect
? Increase Sales on a
? Specific Objectives
? To stimulate use of new product ? To stimulate continued purchase ? To buy multiple units
short run
? To accelerate usage rates
? To defend / attack competition ? To liquidate inventory
SP CLASSIFICATION ? Where Targeted ? Who Runs
? Manufacturer
? Dealer ? Retailer
? Consumer
? Trade ? Sales force
• Objective
• Franchise Building
• Non Franchise Building
SALES PROMOTION - TYPES
PRICE OFFS
? Discount on Printed Price ( MRP )
•Commodity Product / Low Brand Loyalty •/ Impulse products /Price Sensitive Benefit clearly seen in monetary terms Challenge : What should be the discount %?
BONUS PACK
? Bonus Pack ? Additional Qty of same product - Horlicks ? More quantity at less than proportionate price ? Banded Pack ? Buy two take one free ? 3 for less price ? Sense of Urgency/Large Pack shift
REFUND & REBATE
? Promise of full or part money return ? Seen as a reward for purchase
? Preponement of Purchase
? Trial at no risk / Perceived Risk
? Used mainly in US
? Slippage Effect
COUPONS
? Discount on related/unrelated products ? Distributed Directly/Media/With Product
? Specific targeting possible
? Shifts attention from price hike ? Induces involvement in advertisement ? Mis use by retailers
CONTEST & SWEEPSTAKES
? “Interest” Promotions ? Trial run will be difficult ? Eg : Contest Cards, Conteststowin.com
PREMIUMS
? Another product with the purchased product
? Higher price possible ? Targeting Possible ? POP should be attractive ? Types
? In Pack/On Pack/ Container /Mail In ? Eg : Shakti Oil Mills plastic bucket
SAMPLING
? Door to door ( expensive ) ? Direct Mail ( pilferage ) – Colgate Story
? Media ( targeting ) – Pepsi Story
? Retail shopping centers – Sampoorna Story ? Retail Stores ( not free ) ? Trade Fairs / Exhibitions
EXCHANGE OFFERS
? Mainly for durables ? Creation of Replacement Demand ?
? Assessment / Evaluation Problems
? Own products or others as well ? ? Steamrolling / Cannibalization
? Long Term
CONTINUITY PROGRAMS
? Trading Stamps ? Store Continuity Plans ? Loyalty Programs / Club Memberships
? Eg : Little Pai/ Café Coffee Day/ Maruti offer in 1995
? Short Term
? The Bournvita Story (Card Games)
? Coolers ( Drinking Glass )
TYPES OF SP ( CONSUMER )
? Price Deals ? Price Packs ? Premiums ? Samples
? Refund / Rebates
? Coupons ? Contests/Sweepstakes
? Exchanges
? Continuity Plans
TRADE ALLOWANCES
? Off Invoice Allowance (Temp) ? Quantity Discount (Temp) ? Free Extra Goods
? Demo Unit Support
? Count Recount Allowance ? Slotting Allowance
SOME TERMINOLOGIES
? Baseline Sales
? Promotional Lift (Incremental Sales) ? Pass Through (how much of money in SP goes down
the channel?)
SALES PROMOTION PROCESS
Marketing Objectives
Sales Promotion Objectives
Selection of tools
Develop the program
Pre-testing
Implementation & Control
Evaluation
COMPONENTS OF SP
? Size of Incentive
? Conditions of participation ? Distribution Vehicle
? Duration
? Timing ? Budget
BUDGETING FOR SP
? All you can afford ? Percentage of Sales ? Competitor ? Historical Basis ? Objective and Task Method
SOME PITFALLS
? Promotion War
? Sales may fall when promo is off ? Quality / Price perception ? Pilferage Mis use ? Forward Buying ? Diverting
WHY THEY SPEND?
My Company
Cut back Maintain
We lose market share
Maintain
Same Market Share, Lower profits
Others
Cut back
Higher Profits For Everyone
We gain market Share
2 POSSIBLE LONG TERM EFFECTS
1. The Downward Spiral
Promotion
Sales
Aggressive Promotion
More Aggressive Promotion
Customers learn Competitors Competitors Wait for deals Competitors React React React
Time
2 POSSIBLE LONG TERM EFFECTS
2. The Upward Shift
Promotion 1
Promotion 2 Trade Stocks
Promotion 3 Customers Become loyal
Sales
Customers Try the prod
Time
PSYCHOLOGY OF SP
? Classical Conditioning Theory ? SP as a stimulus ? Instrumental Conditioning ? SP as a reward ? Object Perception ? Quality Deterioration ? Price Perception ? Price Deterioration ( Reference Price)
? SP as Dissonance Reducer ? Self Concept – Locus of Control ? SP as Risk Reducer ? Perceived Risk ? SP as magnitude reducer ( small SKUs) ? SP as deal clincher ? Deal Proneness ? Shift in time, place, frequency etc ? Demographics/Nature of Involvement?
PSYCHOLOGICAL EFFECT
CONSUMER DECISION MAKING
Involvement
High High
Complex Buying Behaviour
Low
Variety Seeking Behaviour
Brand Difference
Low
Dissonance Reducing Behaviour Habitual Buying
WHAT SP CAN NOT DO
? Change Negative Attitudes ? Reverse Declining Sales Trend ? Create Brand Image ? Make up for Insufficient Advertising
THE TRAGEDY OF SP
? Share of SP increasing in the budget
? CP+TP = 60% apprx & Advtg = 40% apprx
? People are becoming more deal prone ? Run faster & faster to stay where you are ? SP in all stages of PLC ? Evil to live with
? Legal Framework ? Consultants ? Entry in Curriculum
doc_924805124.ppt