Sales Incentive Will Beconsidered ‘Wages’ For ESI Contributions
Sales Promotion. An Extra Incentive to Buy A Tool to Speed up Sales An Extra Incentive to Buy A Tool...
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Transcript of Sales Promotion. An Extra Incentive to Buy A Tool to Speed up Sales An Extra Incentive to Buy A Tool...
Sales Promotion
An Extra Incentive to Buy
An Extra Incentive to Buy
A Tool to Speed up Sales
A Tool to Speed up Sales
An Extra Incentive to Buy
An Extra Incentive to Buy
A Tool to Speed up Sales
A Tool to Speed up Sales
Targeted to Different Parties
Targeted to Different Parties
“A direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or the ultimate consumer with the primary objective of creating an immediate sale.”
“A direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or the ultimate consumer with the primary objective of creating an immediate sale.”
Types of Sales Promotion Activities
SamplesSamples
CouponsCoupons
PremiumsPremiums
Contests/sweepstakesContests/sweepstakes
Refunds/rebatesRefunds/rebates
Bonus PacksBonus Packs
Price-off DealsPrice-off Deals
Frequency ProgramsFrequency Programs
Cooperative AdvertisingCooperative Advertising
Trade AllowancesTrade Allowances
Training ProgramsTraining Programs
Contests, Dealer IncentivesContests, Dealer Incentives
Point-of-purchase DisplaysPoint-of-purchase Displays
Trade ShowsTrade Shows
Event MarketingEvent Marketing
SamplesSamples
CouponsCoupons
PremiumsPremiums
Contests/sweepstakesContests/sweepstakes
Refunds/rebatesRefunds/rebates
Bonus PacksBonus Packs
Price-off DealsPrice-off Deals
Frequency ProgramsFrequency Programs
Trade AllowancesTrade Allowances
Training ProgramsTraining Programs
Contests, Dealer IncentivesContests, Dealer Incentives
Point-of-purchase DisplaysPoint-of-purchase Displays
Trade ShowsTrade Shows
Event MarketingEvent Marketing
Consumer-OrientedConsumer-Oriented Trade-OrientedTrade-Oriented
Growth of Sales Promotion
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
'89 ‘90 ‘91 ‘92 '93 '94 '95 '96 '97 '98 '99 ‘00
Consumer Promotions
Media Advertising
Trade Promotions
Percent of Total Promotional Dollars, 3-year Moving Average.Percent of Total Promotional Dollars, 3-year Moving Average.
Reasons for the Growth of Sales Promotion
Short-Term FocusShort-Term Focus
Fragmentation of the Consumer MarketFragmentation of the Consumer Market
Brand ProliferationBrand Proliferation
Increased Promotional SensitivityIncreased Promotional Sensitivity
Declining Brand LoyaltyDeclining Brand Loyalty
Growing Power of RetailersGrowing Power of Retailers
Strategic Importance of Sales PromotionStrategic Importance of Sales Promotion
Reaching a Specific Target AudienceReaching a Specific Target Audience
ReasonsReasons
Increased AccountabilityIncreased Accountability
CompetitionCompetition
ClutterClutter
Objectives of Consumer Sales Promotion
To Defend (Maintain)
Current Customers
To Defend (Maintain)
Current Customers
To Increase Consumption of an Established
Brand
To Increase Consumption of an Established
Brand
To Obtain Trial and Purchase
To Obtain Trial and Purchase ObjectivesObjectives
To Enhance IMC Efforts and Build
Brand Equity
To Enhance IMC Efforts and Build
Brand Equity
Consumer Sales Promotion Strategy Decisions
Three categories of strategic decisions for sales promotion:
1. Strategic tools/options
2. Application across product lines
3. Application in geographic markets
1. Strategic Tools/Options
Communicate Distinctive Brand
Attributes
Communicate Distinctive Brand
AttributesBuild Long-term
Brand PreferenceBuild Long-term
Brand PreferenceDevelop and
Reinforce Brand Identity
Develop and Reinforce Brand
Identity
“Frequency” Programs
Encourage Repeat Purchase
“Frequency” Programs
Encourage Repeat Purchase
“Frequency” Programs Encourage
Patronage Loyalty
“Frequency” Programs Encourage
Patronage Loyalty
“Frequency” Programs Encourage
Patronage Loyalty
“Frequency” Programs Encourage
Patronage Loyalty
“Frequency” Programs
Encourage Repeat Purchase
“Frequency” Programs
Encourage Repeat Purchase
Build Long-term Brand PreferenceBuild Long-term
Brand PreferenceDevelop and
Reinforce Brand Identity
Develop and Reinforce Brand
Identity
Communicate Distinctive Brand
Attributes
Communicate Distinctive Brand
Attributes
Franchise Building Promotional ObjectivesFranchise Building
Promotional Objectives
Franchise Building Techniques and Practices
Franchise Building Techniques and Practices
May Improve One-on-one
Communications
May Improve One-on-one
Communications
2. Application Across Product Lines
Across the entire line or on individual items?
If individual items, which ones?More or less popular?Higher or lower price points?Regular stock or special version?
Consumer Sales Promotion Tactical Decisions
DistributionDistribution
TimingTiming
Value of IncentiveValue of Incentive
ExecutionExecution
Sampling
The Products Are of Relatively Low Unit Value,
So Samples Don’t Cost Much
The Products Are of Relatively Low Unit Value,
So Samples Don’t Cost Much
The Products Are Divisible and Can
Be Broken Into Small Sizes That Can Reflect the
Products Features and Benefits
The Products Are Divisible and Can
Be Broken Into Small Sizes That Can Reflect the
Products Features and Benefits
The Purchase Cycle Is
Relatively Short So the
Consumer Can Purchase in a
Relatively Short Time Period
The Purchase Cycle Is
Relatively Short So the
Consumer Can Purchase in a
Relatively Short Time Period
The Products Are of Relatively Low Unit Value,
So Samples Don’t Cost Much
The Products Are of Relatively Low Unit Value,
So Samples Don’t Cost Much
The Products Are Divisible and Can
Be Broken Into Small Sizes That Can Reflect the
Products Features and Benefits
The Products Are Divisible and Can
Be Broken Into Small Sizes That Can Reflect the
Products Features and Benefits
Sampling Works Best When
Sampling Works Best When
Strengths and Limitations of Sampling
StrengthsStrengths LimitationsLimitations
Induce prospective buyer to try product or service
Induce prospective buyer to try product or service
Greater consumer appreciation of product
benefits
Greater consumer appreciation of product
benefits
Learning period required to appreciate brand
requires large sample size
Learning period required to appreciate brand
requires large sample size
Brand must have unique benefit to induce repeat
purchases
Brand must have unique benefit to induce repeat
purchases
Induce prospective buyer to try product or service
Induce prospective buyer to try product or service
Greater consumer appreciation of product
benefits
Greater consumer appreciation of product
benefits
Brand must have unique benefit to induce repeat
purchases
Brand must have unique benefit to induce repeat
purchases
Sampling Methods
Location SamplingLocation Sampling
Door-to-door SamplingDoor-to-door Sampling
Sampling through MediaSampling through Media
Sampling through MailSampling through Mail
In-store SamplingIn-store Sampling
On-product SamplingOn-product Sampling
Event SamplingEvent Sampling
Direct SamplingDirect Sampling
The InternetThe Internet
Location SamplingLocation Sampling
Direct SamplingDirect Sampling
Event SamplingEvent Sampling
On-product SamplingOn-product Sampling
In-store SamplingIn-store Sampling
Sampling through MailSampling through Mail
Sampling through MediaSampling through Media
Door-to-door SamplingDoor-to-door Sampling
MethodsMethods
Coupons
CouponsCoupons
85% of Canadians used coupons last year
Canadians use about 8
coupons per person
1/3 of all Canadians
used coupons in the past week
in 2003
Over half of all Canadian
households claim coupons influence their
brand purchase decisions
Strengths and Limitations of Coupons
Appeal to Price Sensitive Consumer
Appeal to Price Sensitive Consumer
Can Offer Price Break Without Retailers CoopCan Offer Price Break
Without Retailers Coop
Can Be Effective Way to Induce Trial of New or
Existing Products
Can Be Effective Way to Induce Trial of New or
Existing Products
Can Be Way to Defend Market Share and
Encourage Repurchase
Can Be Way to Defend Market Share and
Encourage Repurchase
Coupons Are Often Used by Loyal Consumers Who
May Purchase Anyway
Coupons Are Often Used by Loyal Consumers Who
May Purchase Anyway
Improper Redemption and Fraud
Improper Redemption and Fraud
Difficult to Determine How Many Consumers Will Use
Coupons and When
Difficult to Determine How Many Consumers Will Use
Coupons and When
Declining Redemption Rates and High Costs of
Couponing
Declining Redemption Rates and High Costs of
Couponing
Appeal to Price Sensitive Consumer
Appeal to Price Sensitive Consumer
Can Offer Price Break Without Retailers CoopCan Offer Price Break
Without Retailers Coop
Can Be Effective Way to Induce Trial of New or
Existing Products
Can Be Effective Way to Induce Trial of New or
Existing Products
Can Be Way to Defend Market Share and
Encourage Repurchase
Can Be Way to Defend Market Share and
Encourage Repurchase
Coupons Are Often Used by Loyal Consumers Who
May Purchase Anyway
Coupons Are Often Used by Loyal Consumers Who
May Purchase Anyway
Difficult to Determine How Many Consumers Will Use
Coupons and When
Difficult to Determine How Many Consumers Will Use
Coupons and When
Declining Redemption Rates and High Costs of
Couponing
Declining Redemption Rates and High Costs of
Couponing
StrengthsStrengths LimitationsLimitations
Coupon Distribution Across All Media (2003)
Data from Figure 13-7
FSI
I n-store
I n/on package
Magazine
Direct mail
Other
Charity
FSI
I n-store
I n/on package
Magazine
Direct mail
Other
Charity
Premiums
Free Premiums: Only Require Purchase of the Product
Free Premiums: Only Require Purchase of the Product
Self-liquidating Premiums: Require Consumer to Pay Some or All of the Cost of the Premium
Self-liquidating Premiums: Require Consumer to Pay Some or All of the Cost of the Premium
Free Premiums: Only Require Purchase of the Product
Free Premiums: Only Require Purchase of the Product
Premium: an offer of an item of merchandise or service either free or at a low cost that is an extra incentive for customers
Premium: an offer of an item of merchandise or service either free or at a low cost that is an extra incentive for customers
Two Types of PremiumsTwo Types of Premiums
Contest: a promotion where consumers compete for prizes or money on the basis of skills or ability. Winners are determined by judging entries or ascertaining which entry comes closes to some predetermined criteria
Contest: a promotion where consumers compete for prizes or money on the basis of skills or ability. Winners are determined by judging entries or ascertaining which entry comes closes to some predetermined criteria
Sweepstakes/games: a promotion where winners are determined purely by chance and cannot require a proof of purchase as a condition for entry. Winners are chosen by random selection from a pool of entries or generation of a number to match those held by game entrants.
Sweepstakes/games: a promotion where winners are determined purely by chance and cannot require a proof of purchase as a condition for entry. Winners are chosen by random selection from a pool of entries or generation of a number to match those held by game entrants.
Contests and Sweepstakes
Refunds and Rebates
Refunds: Offers by the manufacturer to return a portion of the product purchase price, usually after the consumer supplies some proof of purchase.
Refunds: Offers by the manufacturer to return a portion of the product purchase price, usually after the consumer supplies some proof of purchase.
Strengths and Limitations of Refunds and Rebates
Create New UsersCreate New Users
Brand Switching or Repeat Purchases
Brand Switching or Repeat Purchases
Temporary Price ReductionTemporary Price Reduction
Effort to Obtain RefundEffort to Obtain Refund
Delay in Obtaining RefundDelay in Obtaining Refund
Image of Refunds/RebatesImage of Refunds/Rebates
Create New UsersCreate New Users
Brand Switching or Repeat Purchases
Brand Switching or Repeat Purchases
Temporary Price ReductionTemporary Price Reduction
Effort to Obtain RefundEffort to Obtain Refund
Delay in Obtaining RefundDelay in Obtaining Refund
StrengthsStrengths LimitationsLimitations
SlippageSlippageSlippageSlippage
Other Sales Promotion Tools
Frequency/Loyalty
Programs
Frequency/Loyalty
Programs
Price-off DealsPrice-off Deals
Bonus PacksBonus Packs
OtherPromotional
Tools
OtherPromotional
ToolsEvent
MarketingEvent
Marketing
Objectives of Trade Sales Promotion
Encourage Retailers to Display
Existing Brands
Encourage Retailers to Display
Existing Brands
Encourage Retailers to Display
Existing Brands
Encourage Retailers to Display
Existing Brands
Obtain Distribution of New Products
Obtain Distribution of New Products
Maintain Trade Support for Existing
Products
Maintain Trade Support for Existing
Products
Build Retail InventoriesBuild Retail Inventories
Maintain Trade Support for Existing
Products
Maintain Trade Support for Existing
ProductsObtain Distribution
of New ProductsObtain Distribution
of New Products
ObjectivesObjectives
Trade Sales Promotion Strategy Options
Trade ShowsTrade Shows
Contests and IncentivesContests and Incentives
Trade AllowancesTrade Allowances
Point-of-Purchase Displays
Point-of-Purchase Displays
Sales Training ProgramsSales Training Programs
Cooperative AdvertisingCooperative Advertising
Buying Allowances
Buying Allowances
Promotional Allowances
Promotional Allowances
Slotting Allowances
Slotting Allowances
EventsEvents