What Exactly is Sales Promotion?

Promotion: any incentive used by manufacturers to induce the trade and/or consumers to buy a brand and encourage sales force to aggressively sell it

Sales Promotion Consumer products Industrial products Consumer products Consumer-oriented coupons premiums samples contests/sweepstakes rebates etc

Trade-oriented

point-of-purchase (POP) advertising allowances display allowances merchandise assistance quantity discounts

Industrial products Trade shows Displays/exhibits Brochures and technical promotional material

Tools for Consumer Sales Promotion

Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling

Point-of-Purchase Promotion

Tools for Trade Sales Promotion

Trade Allowances Push Money
Training Free Merchandise

Store Demonstration
Conventions & Trade Shows

Push MoneyMoney offered to channel intermediaries to encourage them to push products--that is, to encourage other members of the channel to sell the products.

The amount of discounts disbursed during the festive season(*in Rs 000)

CAR MODEL
Hyundai Accent

DISCOUNT
25-30

FORMATION
Free Insurance,Registration,MP 3 player Free Insurance, Cash discount Cash

Tata Indica (V2 D and Xeta) Maruti swift

27-38 15

Chevrolet Optra ( Ls-lt)

Toyota Corolla Honda Accord

30-40
30-40 15-20

Free Insurance, Cash

Free insurance, cash Cash

Ford Fiesta
Honda Civic

15-20
10-15

Cash,MP3 Player
Cash, Accessories

Some recent Initiatives in Gift Items by India Inc for Festival season
COMPANY Timex Tanishq
PepsiCo Archies De Beers

FESTIVAL STRATEGIES Launched racing Chronograph and will be penetrating in 4 new places Launched everyday diamond jewellery
Launching gift pack for both Frito lay and pepsi Focusing more on corporate gifting Group Launching new products and will be targeting the masses

Sales promotion Adhesive which bonds face to face selling and promotional mix. Direct and immediate inducement that adds an extra value to the product so that it prompts dealers, distributors, consumers to buy the products Communicate-Convince-Compete Impact is short term.Acts as an catalyst Characteristics 1)Invitation 2)Incentive 3)short Term 4)Stimulation in Purchase Increase in Use of Sales promotion 1)Contineous rise in media costs 2)Advt efficiency is declining 3)Media clutter is on rise

 4)With increase in number of Brands the brand loyalty is fading 4)Competition is on rise ,traders are asking for more schemes 5)For product like durables Sales promotion is more effective than advertising OBJECTIVES 1)FOR CONSUMERS 1)Create awareness 2)converting non users into users 3)winning over the competitive customers 4)Increase consumption pattern 2)FOR TRADERS 1)Display of products(New) 2)carry high level of stock 3)Encourage stocking of related items to offer a total system 4)Increase channel length and numbers 5)Combat competitors 6)Maintain exclusivity of Brand 7)Morale boosing 8)Motivate thr reward and recognition 3)FOR SALES FORCE 1)Collection of market information 2)Launch of new product 3)improve sales effectiveness 4)stimulate offseason sales 5)Motivate thr recognition SALES PROMOTION TOOLS

 Type of market Competitive offer Cost of tool Relative effectiveness Type of product Size of organization CONSUMER PROMOTION A)Point of Purchase Goods will be displayed are half sold. Last word before purchase strategically located Skillfully designed display can enhance sales appeal Displays packaging, stickers, danglers posters, illuminated designs, motion displays. B) Demonstrations Retail outlet/homes-durables Door to Door Key people journalist, media etc Vacuum cleaners, washing machine ,low cost product like beverages. C) Samples Free trial send the mail ,delivered at doorstep attached to product, at retail outlet. 1) shampoo, Hairoil, tea 2)large pack of detergent powder may contain pack of soap3)pharma free sample effective way, expensive. D) prizes To lure customers cash or kind /trip to exotic Location -legal obstacle prizes are not tied with purchasing ,slogan ,Riddle Quiz ,lunch with celebrity-Individuals compete on basis of creative skills based on chance/luck DEALS: Majority of them are prices oriented in its appeal-1) Full money returned within 7 days if not satisfied.

 2)price off say 10% on max. retail price. 3) Extra units in same price. For Eg. 2 safety blades in pack of ten (7 o clock) DEALER 1) Internal store display 2)Window display Display Promotion Scheme (DPS)-24+1 F,48+3 F. Display Premium Allowance(DPA) If you buy 24 and display 1 you will get100/If you buy 48 and display 1 you will get 300/-

Mass Media Promotion(MMP) : offer is till stock lasts Bonus Stamp Displayed Bonanza Scheme(BSDBS) Bottles 12 6 Type WRL WGL Stamp 1 Red 1 Yellow

3)Dealer Sales Contest- Dealer compete in SP 4)Dealer Stock Display 5)Dealer Discounts-other than normal trade discount 6)Cooperative Advertisement &Promotional Allowance 7)Dealer Gifts-

INDUSTRIAL MARKETING
Products with wide price range few rupees from nuts and bolts to several lakhs for machine tool No of customer small A) Documentation : Improve effectiveness 1)product literature-Type,Size, Design ,features 2)Selection and performance Charts-

 3)Technical Charts 4) Operating and trouble shooting 5 ) Installation Manual 6)price list B) working model-model ,cut out,photograph Technical Seminar-selectivity(personal rapport) Comprehensive (design, manufacturing, raw material, testing ,problems)

RED FM SMS RED<Your area name> to 58558 Radio stations in Mumbai are celebrating the monsoon season through various promotionscum-public service initiatives. RED FM(Bajate Raho) has rolled out an extensive plan to help dela with monsoon. Listeners can vote for boat on RED FM if their area is drowning in downpour. The area with highest number of votes stand to win an inflatable RED FM boat. In the heavy rain volunteers with huge ,RED FM branded umbrellas at major malls, multiplxes and railway stations FEVER 104 FM launched a monsoon Help line that promised to ease Mumabaikars woes by addressing problems like water logging ,power cuts BIG 92.7 FM has tied up with weather monitoring department called Limtex to get live updated weather reports from 22 locations Fairglow has effectively used sales promotions to introduce its brand, by doing a lot of sales promotions like the buy 3 get 1 free, also Fairglow free with Good Knight, with other HLL products. When Godrej did sales promotions to increase it washing machine sales Samsung to protect its market also introduced sales promotions. Godrej gave a rebate offer and a free VIP suitcase. So Samsung also introduced the rebate offer and gave a camera free. Pantene when it was launched did a lot of sampling, to stimulate trail purchase. Their efforts have surely shown results, with Pantene being one of the top selling brands in India today.

Types of coupons

Instant redeem coupon-distributed in retail store and placed on packages. The consumer can immediately redeem the coupon while making purchase Bounce Back coupons-Coupons placed inside the packages so that customers cannot reddem them quite as quickly.This helps in repurchase Scanner delivered coupon-Coupons deliverd at the cash register Cross Ruffing-Placement of coupon for one product on another product.Used for same company product,encourages purchase within same brand/category Response offer-Coupons are mailed by the consumers Methods of distributing coupons Print media Direct mail On or in package In store Sampling Internet Sales staff Fax

Contests-cum-sweepstakes: Elle 18 Promotion: Elle 18 valentines day promotion, feb 2002 Objective: to use valentiness day platform to communicate with th etarget audience of Elle 18 City: Delhi, Mumbai, Banglore, Chnadigarh, Pune. Strategy: Upon the purchase of Elle 18 products worth a certain amount, a scratch-card was given out. this could entitle the person to a number of gifts and hampers. The highlight of this was the Cinderella Activity which invited those customers who had bought products worth a pre-decided amount to try put a glass slipper. The lucky few, whose feet fit, were awarded dinner dates.

Refund and Rebates They are offered to consumers or to the trade following the purchase of product. Consumer is expected to pay full price against the purchase and present the proof of purchase,the manufacturer then reimburses a portion of the purchase price In-store sampling Lakme has in-store trail products. Since it in the cosmetics market it is very essential to provide samples, many stores in Mumbai from time to time have Lakme sampling offers. Where they allow you to try the product and then buy it. Pantene does door to door sampling. On-package sampling Fair glow, a lot of free Fairglow soaps were available with many other products, especially other HLL products. Mobile sampling Many road shows and mobile vans distribute free products or offers. Free Movie tickets, disco passes, pensare often distributed.

Price Off Price deals are probably the most commonly used promotional techniques. A price deal for a customer means a reduction in the price of the promoted product and the consumer sav Colgate fresh energy ice blue gel (Colgate India) 50 gm pack, Rs. 5.50 off on normal price, now available at Rs. 12.50 only. Determining the quantum of discount depends on the consumers price perceptions and may be difficult to decide.

Banded Pack-Premium The offer is termed as banded pack when 2 or more units of the products are sold at a reduced price compared to the regular price. Pepsodent toothpaste special pack a 150gm toothpaste + a 100gm toothpaste and a G.I.Joe international character, all in 1 pack at a low price of just Rs., which saves Rs.81/-

Trial offers

Trial offers have the same goal as sampling to induce consumer trial use of a brand- but they are used for more expensive items. Ex: exercise equipment, appliances, consumer electronics, etc. the expense to the firm of course can be formidable. Segments chosen for this sales promotion technique must have high sales potential.

Loyalty Reward
Repeat purchases may be stimulated by frequent user incentives. Perhaps the best examples of this are the many frequent flyer or user schemes used by airlines, train companies, car hire companies etc. Frequency Programmes offer consumers discounts or free product rewards for repeat purchase or patronage of the same brand or company. Shoppers stop Objective: reward the loyal customer. Shoppers stop started the First Citizens Club and enrolled customers as members of the shoppers club by charging a fee of Rs.150. The customers were entitled to a variety of benefits by collecting points. Exchange offers If a family bought a refrigerator 10 years ago and the machine is still giving reasonable service then the family is unlikely to buy a newer and more advanced version of the refrigerator unless they get rid of the older one by selling it to someon Consumer durables market is the one where exchange offers are used the most. Almost all the TVs, Refrigerators, Washing Machines, etc. have exchange offers. e. Samsung On exchanging old TV for a new Samsung Plano, upto Rs. 5000 off. On exchanging old TV for a new Samsung Hitron Digital, upto Rs. 3000 off. On exchanging old refrigerator for a new Samsung refrigerator, upto Rs. 8000 off. Factors deciding the success 1)Market conditions and complex schemes 2)Stagnant rate of consumption

3)Similar schemes by competitors 4)Independent views of people Trade Promotion

Hewlett Packard Promotion: Mystery shopper program Objective: to revitalize the distribution chain, audit retailers and the competitive situation. City: Delhi, Mumbai, Ahmedabad and many more Strategy: aimed at the dealers, the objective of this promotion was to revitalize the distribution chain, audit retailer and competitive situation. Mystery shoppers visited the retail outlets to ascertain merchandising and retailer-consumer interaction. Display and advertising allowance

The retailer is required to arrange the product display in a prominent show-window or offer discount to consumers and advertise this offer in the local newspaper or arrange a point-ofpurchase display on the shelf corner. The retailer earns the incentive only after meeting the conditions set by the manufacturer. Merchandise allowance

In the form of free products packed with regular shipments, are payments to the trade for setting up and maintaining displays. The payments are typically far less than manufacturers would have to spend to maintain the displays themselves. Some of the schemes operating in town are: Buy Cadburys products worth Rs.3000/- and get 30 any chocolates worth Rs.5 free. Buy a box of Munch and get 1 Munch free. POP displays

Point-of-purchase displays i.e. product displays and information sheets are useful in reaching the consumer at the point of purchase and often encourage retailers to support ones brand. POP promotions can help win precious shelf space and exposure in a retail setting. From a retailers perspective, a POP display should be designed to draw attention to a brand, increase turnover, and possibly distribute coupons and sweepstake entry forms. Companies do P-O-P displays as and when they have sales promotion schemes going on.

Some companies that do a lot of P-O-P displays on a regular basis are Gillette, Vicks, Duracell, Pepsi, Coke,Pepsi Dealer loaders

A dealer loader is a premium that the manufacturer gives to the retailers for buying a certain quantity of a product. There are generally 2 types of dealer loaders buying loader and display loader. A buying loader is given to the retailer on purchase of a specified quantity of a particular product. A display loader is the premium given to the retailer for the window display. After the promotion period is over, the item or items, are given to the retailer as a free premium. Incentives

Incentives to the members of the trade include a variety of tactics like awards in the form of travel, gifts, or cash bonuses for reaching targeted sales levels that induce retailers and wholesalers to give a firms brand added attention. The incentive does not have to be large or expensive to be effective. Consumer-cum-Dealer-cum-Sales force sales promotions:

Nokia Promotion: perfect 10 contest Objective: to attract channel partners, salespersons., an prospective buyers City: 15 cities Strategy: the contest was three fold - for consumers, dealers, and sales personnel. A large number of activities were organized. Dealer road shows, mass media consumer competition and intensive merchandising were undertaken. Lucky draws were conducted and the participants get to win some great prizes also.

Uses of Sales Promotion

Immediate purchases

Increase trial
Boost consumer inventory

Encourage repurchase Increase ad effectiveness

Encourage brand switching

Encourage brand loyalty