Professional Documents
Culture Documents
Presentation Structure
Part 1. Sales Promotion Tools Part 2. Determination of objectives Part 3. SP Objectives Consumer objectives Trade objectives Part 4. SP Strategies Part 5. SP Techniques Part 6. Joint- romotions !cross- romotions" Part 7. #valuation of SP Part 8. The use of SP agencies
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SP Tools
consumer promotion trade promotion sales-force promotion Sales promotion tools are used by most organizations, including manufacturers, distributors, retailers, trade associations, and nonprofit institutions.
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SP Growth Factors
Internal factors:
2& $& %& romotion is no' more acce ted b( to management as an effective sales tool) more roduct managers are qualified to use sales romotion tools) roduct managers are under greater ressure to increase their sales&
External factors:
*& +& ,& 1-& 11& the number of brands has increased) com etitors have become more romotion-minded) inflation and recession have made consumers more deal-oriented) the trade has demanded more deals from manufacturers) advertising efficienc( has declined due to rising costs. media clutter. and legal restraints&
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SP Tools Classification
Consumer Franchise Building Tools*:
coupons; free samples; premiums related to the product.
Sales promotions can be designed to achieve defined consumer objectives, trade objectives, or both.
Consumer objectives
&n'uiries(list )uilding. 3n increasing concern among manufacturers is the desire to build accurate lists of actual and otential consumers& Promotions can be designed s ecificall( to ensure that consumers rovide this information& Product trial and sampling. 3 ro erl( constructed romotional offer 'ill have an immediac( of im act 'hich 'ill attract the otential consumer& Product re purchase(lo*alt*. The generation of re eat urchase4 and the establishment of consumer lo(alt( to a roduct is a major facet of sales romotion activit(&
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+ncreasing rate(fre'uenc* of purchase. This ma( be achieved b( the resentation of ne' usages for the roduct. or the suggestion of ne' use occasions& Trading up. Often. and articularl( at the time of introduction of a ne' roduct the manufacturer 'ill ma5e available a smaller si6e of the roduct for trial urchases& Subsequentl(. ho'ever the( 'ill 'ish to encourage the consumer to urchase larger quantities& +ntroducing a new product. Sales romotional techniques. because of the immediac( of their im act. are conventionall( used at the time of a ne' roduct introduction&
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Trade objectives
Traffic )uilding. The consumer 'ill be motivated to visit the outlet because of the s ecific incentive. it is highl( li5el( that he or she 'ill ma5e other urchases 'hilst in store& +n%entor* )uilding. The manufacturer might see5 to encourage the consumer to urchase larger ac5ages of the roduct& Stoc! reduction. the manufacturer ma( 'ish to ensure that there is effective ull-through of his roducts and reduce the level of stoc5 held b( the retailer&
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,ffsetting impact of competiti%e acti%it*. Sales romotion 'ill often be em lo(ed to minimi6e the im act of com etitive activit(& Promotional support to trade. Promotions 'ill be designed to rovide either general or s ecific su ort to the trade& Some of the objectives 'hich can be fulfilled b( such activities are feature ricing) the rovision of dis la(s and dis la( incentives) and in-store demonstrations&
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Trade romotion uses a number of techniques1 o 3 bu(ing allo'ance o 3 merchandise allo'ance o 3n advertising allo'ance o Offering free goods to middlemen o 7anufacturers ma( offer ush mone( o 7anufacturers ma( offer free s ecialt( advertising items that carr( the com an(8s name
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9irms selling to the articular industr( dis la( and demonstrate their roducts at the trade sho'& The artici ating vendors e: ect several benefits. including generating ne' sales leads. maintaining customer contacts. introducing ne' roducts. meeting ne' customers. and selling more to resent customers&
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the romotion consists of a rice reduction 'hich is communicated either on or off the ac5& is a tic5et or document that can be e:changed for a financial discount or rebate 'hen urchasing a roduct&
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4. +n store sampling
>arious sam les of the goods 'hich the consumer can directl( tr( on a lace& =t hel s a sales erson to e: lain the functions of the roduct and to enable the consumer to sam le it&
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For promoter:
#pportunity is to gain access to a group of new consumers, who are encouraged to associate the product with another one from a similar or related category.
For carrier:
#pportunity to add value to his product in the form of a free gift or other motivation at a significantly reduced cost.
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Factors to Consider
< < < degree of image match bet'een the artici ating brands similarit( in the target mar!et rofiles of the artici ants nature of the distri)ution patterns of the t'o brands !it is im ortant that the t'o brands are available from similar outlets"& For esta)lished )rands: the com etitors should be of similar status in the mar!etplace in order that each com lements the other&
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9isad%antages of 5P
rands images must match each other7 such $romotions re:uire more time and are com$licated to e;ecute and administer7 danger of theft and $ilferage <es$ecially when two $roducts are anded together=.
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The %olume a )rand achie%es when on promotion can )e di%ided into two component parts:
l l $ase sales % 'ould have ha ened irres ective of the romotional activit(& Incremental sales % are directl( attributable to the romotional activit( during the eriod&
Consumer responses
l l &ompetitor steal - 'here the romotion encourages s'itching from a com etitorBs brand) $rand cannibalization - 'here the romotion of a articular brand results in consumers s'itching their urchases from another roduct 'ithin the com an(Bs roduct ortfolio) &ategory growth - 'here the additional volume derives from ne' customers 'ho 'ould not other'ise have urchased either the romoted roduct or one of its com etitors&
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