Sales Promotion – basic sales promotion

techniques

A t a n a s L u i z o v

А т а н а с Л у и з о в

Burgas Free University

Business Faculty

www.bfu.bg

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Defining Sales promotion

“A planned and implemented marketing activity that both enhances product or service appeal and changes consumer behavior positively in return for an additional benefit for purchase or participation.”

The Institute of Sales Promotion (UK)

“SP are marketing and communications activities that change the price/value relationship of a product or service perceived by the target, thereby (1) generating immediate sales and (2) altering the long-term brand value.”

Schultz, Robinson and Petrison “SP is an action-focused marketing event whose purpose is to have impact on the behavior of the firm’s customers”.

Blattberg and Neslin

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Characteristics

1. SP are action focused.

2. SP are marketing events.

3. SP are design to have a direct impact on consumer behavior.

4. SP are designed to influence consumers or marketing

intermediaries.

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Impact of SP on the consumer

1. Economic – monetary and non-monetary gain derived from the nature of promotional offer. 2. Emotional – the feelings/emotions aroused by exposure to the promotional offer. 3. Informational – the communication of information about a brand.

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The reasons for growth

1. The growing power of retailers.

2. Declining brand loyalty.

3. Increased promotional sensitivity.

4. Brand proliferation

5. Fragmentation of consumer market.

6. Short-term focus.

7. Increased accountability

8. Competition

9. Clutter

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The benefits of sales promotion

1. Re-timed purchasing

2. Brand switching

3. Increased volume of purchasing

4. Product-type substitutions

5. Store substitutions

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Problems with Sales promotion

1. Many sales promotions are not effective brand-building tools.

2. The overuse of sales promotion activities may have the potential of resulting in less positive attitude toward the brand.

3. Even though many sales promotion programs result in a much larger volume of product sold, profitability increases may be relatively low.

4. Sales promotion programs often require substantial implementation costs.

5. Sales promotions tend to orient marketing managers toward the short-term.

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Problems with Sales promotion

1. Many sales promotions are not effective brand-building tools.

2. The overuse of sales promotion activities may have the potential of resulting in less positive attitude toward the brand.

3. Even though many sales promotion programs result in a much larger volume of product sold, profitability increases may be relatively low.

4. Sales promotion programs often require substantial implementation costs.

5. Sales promotions tend to orient marketing managers toward the short-term.

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Types of Promotions (1)

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Types of Promotions (2)

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Consumer promotion techniques (Don E. Schultz)

1. Temporary price discounts (TPD)

2. Coupons

3. Bonus (special) packs (BOGOF)

4. Sampling programs

5. Premiums

6. Sweepstakes and contest

7. Continuity programs

8. Cause-related promotions

9. Joint promotions

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Temporary price discounts

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Coupons

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Bonus packs / BOGOF

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Sampling programs

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Premium

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Sweepstakes

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Continuity programs

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Cause-related promotions

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Planning Sales promotion programs (1)

1. Who are the customers we want to reach?

2. What are the reasons for that behavior?

3. What behavior do you want them to reinforce or change?

4. What is the goal of the program?

5. What are the operational constrains of the promotion (budget, timing, location, logistics?

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Planning Sales promotion programs (2)

1. Environmental analysis

2. Internal analysis

3. Consideration of the marketing strategy

4. Identification of the target audience(s)

5. Determination the promotional objectives

6. Budget determination

7. Developing the program – design of campaign elements, research and pre-testing

8. Implementing the promotional program

9. Evaluation and feedback

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Target(s) (1)

1. Who holds the key to the business problem?

2. What are these customers like?

3. What exactly do we want them to do?

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Target(s) (2)

Loyal users

Competitive loyals

Switchers

Price buyers

Nonusers

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What Sales promotion can do?

1. Increasing volume

2. Increasing trial

3. Increasing repeat purchase Principle: SMART

4. Increasing loyalty

5. Widening usage

6. Creating interest

7. Creating awareness

8. Deflecting attention from price

9. Gaining intermediary support

10. Discriminating among users

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THE SECRETS OF PROMOTIONAL SUCCESS

Fits in with the brand

Offers real added value

Is simple to operate and communicate

Rewards lots of people not just a few

Has good single minded creative

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Thank you!

Contact:

Atanas Luizov BFU

louizov@abv.bg