POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

QUEZON CITY CAMPUS

SALES PROMOTION (MARK 3033)
SY 2015-2016, SECOND SEMESTER
WRITTEN REPORT

TYPES OF PROMOTION
AND

PROMOTIONAL PLAN
SUBMITTED
BY: GROUP 2
Andrino, Roel N.
Arante, Raymund Fiel C.
Barra, Anjenette C.
Biado, Jennifer
Esperanza, Peter Francis
Guting, Jeralyn S.
Kintanar, Benjamin Leoric E.
Mesias, Kate Ann C.
Navarro, Mariane Nicole R.
Sierra, Jilzander John B.
Valenzona, Angeli T.
BSBA MM 2 - 1
TO:
Sir Erwin Vicman Lara
PROFESSOR

DECEMBER 05, 2015

Reporter: Andrino, Roel N.

TYPES OF SALES PROMOTION

There are different channels for sales promotions, which include:
a. Consumer Promotions
b. Trade Promotions

I.

Consumer Promotions

Consumer promotions are that a manufacturer offers consumers directly.

Consumer promotions are geared toward getting consumers to try a
companys products.

A. PRICE DEALS

A consumer price deal saves the buyer money when a product is purchased.
The price deal hopes to encourage trial use of a new product or line
extension, to recruit new buyers for a mature product, or to reinforce existing
customers' continuing their purchasing, increasing their purchases,
accelerating their use, or purchasing of multiple units of an existing brand.
Four main types of consumer price deals are used: coupons, price discounts,
price pack deals, and refunds or rebates.

1. Coupons
Coupons are legal certificates offered by manufacturers and retailers. They
grant specified savings on selected products when presented for redemption
at the point of purchase. Manufacturers sustain the cost of advertising and
distributing their coupons, redeeming their face values, and paying retailers
a handling fee.
Manufacturers disseminate coupons in many ways: direct deliver by mailing,
dropping door to door, or delivering to a central location such as a
shopping mall. They may distribute them through the mediamagazines,
newspapers, Sunday supplements or freestanding inserts (FSI) in
newspapers. They may insert a coupon into a package, which is called inpack coupons, or attach it to, or print it on a package that called on-pack
coupons. Coupons may also be distributed by a retailer who uses them to
generate store traffic or to tie in with a manufacturer's promotional tactic. Ecoupons or online coupons are another form of sales promotion; they are
extremely effective for luring in customers. The most popular uses of ecoupons are for sales of groceries, books, and health and music products.
2. Price Discounts
Price-off deals offer a consumer peso off merchandise at the point of
purchase through specially marked packages. A 10 percent or 20 percent
price reduction is a typical price-off offer. A price-off is clearly labeled as such
on the package. Price-off reduces the price of a brand to that of a competitor
and gives a direct and positive benefit to the consumer. It increases the

value of the brand. Immediate price reduction is the technique that exerts
greatest influence on the brand choice process of the consumer.
Reporter: Arante, Raymund Fiel C.
3. Price Pack Deals
Bonus Packs
Bonus packs are extra quantities of a product that a company gives to
consumers at the regular price. This technique is routinely used for cleaning
products, food, and health and beauty aids to introduce a new or larger size.
Example, a company may also offer a bonus pack or a special pack with 20
percent more in order to encourage a customer to purchase a product.

Banded Pack
Two or more units of a product are sold at a reduction of the regular singleunit price. Sometimes companies bundle products together in order to
promote a new product or to encourage consumers to try a complementary
product, such as a free small conditioner bundled with a shampoo purchase,
toothbrush and toothpaste offers or a free disposable razor with a shaving
cream purchase. More often, the products are simply offered in a two-for,
three for, or ten-for format. In other cases, a smaller unit of the product may
be attached to one of the regular size.

4. Refunds and Rebates

A refund or rebate promotion is an offer by a marketer to return a certain
amount of money when the product is purchased alone or in combination
with other products. Refunds aim to increase the quantity or frequency of
purchase, to encourage customers to load up. This dampens competition by
temporarily taking consumers out of the market, stimulates purchase of
postponable goods such as major appliances, and creates on-shelf
excitement or encourages special displays. Rebate offer consumers delayed
rather than immediate value, since the consumer must wait to receive the
reimbursement. In using these programs, manufacturers achieve customerholding objective by encouraging consumers to make multiple purchases or
by rewarding previous users with a cash discount for again purchasing the
manufacturers brand. Consumers seem to view refunds and rebates as a
reward for purchase. They appear to build brand loyalty rather than diminish
it.

B. Premiums
Premium is tangible compensation, an incentive, given for rendering a
particular deed, usually buying a product. The premium may be free, or, if
not, the cost is well below the usual price.
1. Direct premium

Simple Direct Premium - provides an incentive given separately as a

product is purchased. For instance, when a shopper pays for a new coat, she
learns it has a direct premiuma hanging travel bag.

In-Packs and On-Packs Premium- In-Packs may be enclosed with a

package at the factory. A snack food company, for example, may include a
serving tin inside its holiday package. On-packs are another type of factoryadded packaging that lies outside the package, well attached by a plastic
strip, wrapper, or other apparatus. Free dental floss attached to toothpaste is
an example.

2. Mail Premiums - unlike direct premiums, require the customer to perform

some act in order to obtain a premium through return mail. Consumers
receive a free item from the sponsoring manufacturer in return for submitting
a required number of proofs of purchase.
Reporter: Barra, Anjenette C.

C. Contests, Sweepstakes and Games

Contest involves a competition for customers, which requires some ability or
skill. Winners are determined by a panel of judges or on the basis of points
scored by the participants. The participants must act according to the rules
of the contest and may or may not be required to submit proofs of purchase.

Sweepstakes is a random drawing or chance selection which may or may

not have a requirement such as buying a ticket or purchasing a product.
Winners are determined purely by chances. Sweepstakes can be cheaper to
run than contests. In addition, participation in contests is very low compared
to that of sweepstakes.

Games are activities that provide an instant reward for the consumers.
Unlike sweeps and contests, that delay gratification and require the
consumer to wait an extended period before determining whether he or she
is a winner.

D.Sampling/ Trial Offers

Sampling is a sales promotion technique designed to provide a consumer

with an opportunity to use a brand on trial basis. It is an effective strategy of
introducing new product or is not a market leader by giving a sample product
to the consumer either free or for a small fee.
19th Century soap manufacturer Benjamin T. Babbitt was one of the first
known people, though not the first ever, to offer free samples of his products.
Methods of Sampling:

In-store sampling giving customers an experience of the product inside

the store. It is a method used for food products and cosmetics. Consumers at
the point of purchase may be persuaded by a direct encounter with the
brand.

Door-to-door sampling distribution of products in households. It is

expensive, but it can be effective if the market is able to identify the correct
market segment.

Dispersed Sampling - Products can also be sampled directly through the

retailer who sets up a display unit near the product or hires a person to give
the product to consumers as they pass by.

Mail sampling samples are delivered through the postal services. it is an

expensive method of distribution and the sample must be small item to be
economically feasible.
Example: Booklets, Cards
Print Media Sampling - is another technique. This method is very popular
for beauty and health care products

In- or On-pack Sampling the sample item is inside or attached to another

product package.

Online Sampling - distributing samples online. Example: Application and

software; Anti-virus software
In 2000, best-selling author Seth Godin released a book entitled "The Idea
Virus" and then proceeded to give it away for free. Was Seth, who has sold
tons of books, suffering from temporary insanity? No, quite the contrary. You
see, Seth knew that if he gave the book away for free, people would read it,
and if they liked it they would help create a buzz about the book. That's
exactly what happened. In less than a month, 400,000 copies were
downloaded for free and even though the download were free, people bought
the hardcover. The book ended up being #5 on Amazon.com's best seller list.
Reporter: Biado, Jennifer

Product Demonstration

Product demonstration (or "demo" for short) is a promotion where a product

is demonstrated to potential customers. The goal of such a demonstration is
to introduce customers to the product in hopes of getting them to purchase
that item.
Products offered as samples during these demonstrations may include new
products, new versions of existing products or products that have been
recently introduced to a new commercial marketplace.

In-store demonstrations - are usually performed at large retail

locations, such as supermarkets, department or discount stores, or in
shopping malls. The products that are promoted at in-store demonstrations
may
be
food
and
beverages,
food
preparation
equipment, housekeeping products, personal care items, or occasionally
other types of goods. In-store demonstrations allow potential customers to
touch or taste a product before they buy.
Door-to-door - and by-appointment salespeople demonstrate such
products as Tupperware, encyclopedias, vacuums, and carpet stain
removers.
Trade shows - Prototypes are often demonstrated in trade shows, and are
called "tech demos".
Fairs - Product demonstrations have been a staple of state fairs for many
years.
Television - The first product demonstration in a format that would later
be called an infomercial is attributed to a 1949 demonstration of the
Vitamix blender.
Roadside - Salespeople set up temporary sites to demonstrate their
wares in order to attract sales.
Video - Included with a purchase, a video on a DVD disc may be provided
demonstrating the product's use. Video product demonstrations can also
be found on the Internet at the homepages of companies, or on web
hosting sites such as YouTube.

Reporter: Esperanza, Peter Francis

E. Frequency/ Continuity Programs

Continuity programs, also called loyalty programs or point programs, reward

consumers repeat purchasing of a particular brand by awarding points
leading to reduced prices or free merchandise.
Frequent flyer programs of airline companies, frequent stay programs of
hotels and frequent renter programs of auto rental chains are examples of
this type of techniques. These programs encourage consumers to stick with a
particular airline or hotel to accumulate requisite number of points as quickly
as possible. The program need not be based on point accumulation and
instead may simply require a certain number of purchases to be eligible for
purchases. Continuity programs have the greatest value when a consumer's
loyalty is divided among several brands since they will encourage the
consumer to buy the particular brand more frequently.

F. Overlay and Tie-in Promotions

Overlay/ Combination Programs the use of two or more sales promotion

techniques in combination with one another. When used individually,
promotion tools (particularly coupons) may never be noticed by consumers.

A combination of tools, such as the use of a coupon offer with another

promotional device, increases the likelihood that consumers will attend a
promotional message and process the promotion offer. Moreover, the joint
use of several techniques in a well-coordinated promotional program equips
the sales force with a strong sales program and provides the trade with an
attractive incentive to purchase in larger quantities and to display activity.

Tie-in Promotions the simultaneous use of promotion of multiple brands

in a single promotional effort is called a tie-in or group promotion. Growing
number of companies use tie-ins in order to generate increased sales, to
stimulate trade and consumer interest and to gain optimal use of their
promotional budgets. Tie-in promotion is cost-effective because the cost is
shared among multiple brands. Two or more brands, either from the same
company (intracompany tie-ins) or from different companies (intercompany
tie-ins) are involved in a tie-in.

G.Special Events

1. Event Marketing is a type of promotion where a company or a brand is

linked to an event or where a theme is actively developed for the purpose of
creating experience for the consumers and promoting a product or service.
Marketers often do event marketing by associating their product with some
popular activity such as sporting event, concert, fair, or festival. Marketers,
sometimes, also create their own events to use for promotional purposes.

Reporter: Guting, Jeralyn S.

2. Event Sponsorship is an integrated marketing communications activity
where a company develops actual sponsorship relations with a particular
event and provides financial support in return for the right to display a brand
name, logo, or advertising message and be identified as a supporter of the
event.

II.

Trade Promotions

A trade sales promotion is pointed toward resellers who distribute products

to ultimate consumers. The term "trade" traditionally refers to wholesalers
and retailers who handle or distribute marketers' products. Other terms for
wholesalers and retailers include "resellers" and "dealers."
Commonly, a senior marketing officer or product manager is responsible for
planning a trade promotion. Decisions about the nature of the deal and its
timing are made jointly by the marketing officer, sales manager, and
campaign manager. Because such deals have direct bearing on the pricing

1.
2.
3.
4.

strategy and resulting profitability, they may require clearance by top

management as well.
The objectives of sales promotions aimed at the trade are different from
those directed to consumers. Trade sales promotions hope to accomplish four
overall goals:
Develop in-store merchandising support or other trade support Strong retail support at the store level is the key to closing the loop between
the customer and the sale.
Control inventory - Sales promotions are used to increase or deplete
inventory levels and to eliminate seasonal peaks and valleys.
Expand or improve distribution - Sales promotions can open up new
areas or classes.
Motivate channel members - Sales promotions can generate excitement
about the product among those responsible for selling it.

TYPES OF TRADE PROMOTIONS

A. POP Displays
Manufacturers provide point-of-purchase (POP) display units free to retailers
in order to promote a particular brand or group of products. The forms of POP
displays include special racks, display cartons, banners, signs, price cards,
and mechanical product dispensers. Probably the most effective way to
ensure that a reseller will use a POP display is to design it to generate sales
for the retailer.
High product visibility is the basic goal of POP displays. In industries such as
the grocery field where a shopper spends about three-tenths of a second
viewing a product, anything increasing product visibility is valuable. Beyond
getting attention for a product, POP displays also provide or remind about
important information such as the product name, appearance of the product,
and sizes. Consumers may have seen or heard some of the information in
ads before entering the store. The theme of the POP should be coordinated
with the theme used in ads and by salespeople.
Reporter: Kintanar, Benjamin Leoric E.

B. Sales Contests or Incentives

Manufacturers may develop contests or special incentive programs to

stimulate greater selling effort and support from reseller management or
sales personnel. Contests or incentives programs can be directed towards
managers who work for a wholesaler or retailer as well as towards store or
department managers at the retail level. Incentives to members of trade
include awards in the form of travel, gifts or cash bonuses for reaching
targeted sales level/qouta.
Push money is carried out through a program in which retail sales people are
offered a monetary reward for featuring a marketer's brand with shoppers.
An extra payment given to salespeople for meeting a specified sales goal is

called push money; it is also known as spiffs or PM. For example, a

manufacturer of refrigerators might pay a Php1500 bonus for sales of model
A, a Php1000 bonus for model B, and a Php500 bonus for model C
between March 1 and September 1. At the end of that period, the
salesperson would send evidence of these sales to the manufacturer and
receive a check in return. Although push money has a negative image since
it hints of bribery, many manufacturers offer it.

C. Trade Deals
Trade deals are often special price concessions superseding, for a limited
time, the normal purchasing discounts given to the trade. Trade deals include
a group of tactics having a common themeto encourage sellers to specially
promote a product. Trade deals are the primary expectation for retail
support. There are two main types of trade deals:
1. Buying Allowance - a bonus paid by a manufacturer to a reseller when a
certain amount of product is purchased during a specific time. All the reseller
has to do is meet the criteria of the deal. The payment may be a check or a
reduction on the face value of an invoice. For example, a reseller who
purchases ten to 15 cases receives a buying allowance of Php100 off per
case; a purchase of 16 to 20 cases would result in Php150 off per case, and
so forth. In order to enjoy a buying allowance, some retailers engage in
forward buying, a practice very common in grocery retailing. In essence,
more merchandise than needed during the deal period is ordered. The extra
merchandise is stored to be sold later at regular prices. The savings gained
through the buying allowance must be greater than the cost of warehousing
and transporting the extra merchandise.
a. Buy-back allowance - It immediately follows a previous trade deal and
offers a specified bonus for new purchases of the product related to the
quantity of purchases from the first deal. The purpose is to motivate
repurchase immediately after the first trade deal once the product has
depleted warehouse stock. Manufacturers often give retailers allowances or
discounts for performing certain promotional or merchandising activities in
support of their brands.

b. Slotting Allowance - the most controversial form of buying allowance.

Slotting allowances are fees retailers charge manufacturers for each space or
slot on the shelf or warehouse that new products will occupy. The
controversy stems from the fact that in many instances this allowance
amounts to little more than paying a bribe to the retailer.
c. Free Goods Allowance - the manufacturer offers a certain amount of
product to wholesalers or retailers at no cost if they purchase a stated

amount of the same or a different product. The bonus is in the form of free
merchandise instead of money. For example, a manufacturer might offer a
retailer one free case of merchandise for every 20 purchased.
2. Display Allowance - Some manufacturers pay retailers to select their
display from the many available every week. The payment can be in the form
of cash or goods. Retailers must furnish written certification of compliance
with the terms of the contract before they are paid. Retailers tend to select
displays that are easy to assemble and yield high volume and profits.
3. Reporter: Mesias, Kate Anne C.

D.Sales Training Programs

Form of manufacturer-sponsored promotional assistance is a sales training

program. Under this technique marketer provides training to retailer store
personnel who sell consumer durables and specialty goods such as cooling
systems, exercise equipment and personal computer. Training programs
equip sales personnel with sufficient knowledge about the features, benefits
and advantages of these products.

E. Trial Offers
Trial offers are attractive to business buyers because the items they buy
usually involve high cost and long life. They can reduce risk of selecting a
wrong item.

F. Trade Shows
At trade shows, related products from many manufacturers are displayed
and demonstrated to members of trade. Company representatives display
and demonstrate its products and explain its features and functions. This
technique is particularly suitable for small firms that cannot advertise and
have a sales force too small to reach its potential customers.

G.Deal Loaders

A deal loader is a premium given by a manufacturer to a retailer for ordering

a certain quantity of product. Two types of deal loaders:
Buying loader which typically is a gift given for making a specified order
size.
Display Loader which means the display is given to the retailer after the
campaign. For instance, General Electric may have a display containing
appliances as part of a special program. When the program is over, the
retailer receives all the appliances on the display if a specified order size was
achieved.
Reporter: Navarro, Mariane Nicole R.

Promotional Plan
An outline of
the marketing
tools, strategies and resources that
a company intends to use to promote a product or service. A promotional
plan
is
usually
considered
a
vital
planning
tool by
most business managers that
helps contribute toward
the
successful launch of a new product or service or its expansion into a
new market.
6 Stages Involved in Sales Promotion Planning by DR. B. Balaji
1. Establishment of objectives:
Sales-promotion objectives vary according to the target market. If the target
is the customer, objectives could include the encouragement of increased
usage or the building of trial among non-users or other brand users. For
intermediaries, objectives could be to encourage off-season sales or
offsetting competitive promotions. Sales-promotion activity could also be
aimed at internal personnel, making up part of the reward system

Reporter: Sierra, Jilzander John B.

2. Selection of promotional tools:
Promotional objectives form the basis for selecting the most appropriate
sales-promotion tools. The cost and effectiveness of each tool must be
assessed with regard to achieving these objectives in respect of each target
market. The tools available to the service marketer are described in more
detail in the next section.

3. Planning the sales-promotion programme:

The major decisions that need to be made when designing the salespromotion programme relate to the timing of the promotion and how long
this tool is to be used. Also important are the size of incentive, rules for
eligibility and, of course, the overall budget for the promotion.

4. Pre-testing:
This needs to be undertaken to ensure that potentially expensive problems
are discovered before the full launch of a promotion. Testing in selected
market segments can highlight problems of ambiguity, response rates and
give an indication of cost effectiveness.

Reporter: Valenzona, Angeli T.

5. Implementation:
The program for implementation must include two important time factors.
First, it must indicate the lead time- the time necessary to bring the
programme up to the point where the incentive is made available to the
public. Second, the sell in time which is the period of time from the date of
release to when approximately 90-95 per cent, of incentive material has
been received by potential customers.

6. Evaluation:
The performance of the promotion needs to be assessed against the
objectives set. If objectives are specific and quantifiable, measurement
would seem to be easy. However, extraneous factors could account for the
apparent success of many sales-promotion activities.

For example, competitive actions or seasonal variations may have influenced

customers decision making. It can also be extremely difficult to separate out
the effects of sales-promotion activity from other promotional activity-or
indeed from other marketing-mix changes.

References:
Book
Sanciano, H. M. Consumer Promotion. Sales Promotion Principle & Best
Practices. 2010. Philippines: Anvil Publishing, Inc. pp.59 61
Web

Advertising & Promotion. Available:

http://www.abahe.co.uk/businessadministration/ Advertising-andPromotion.pdf . November 16, 2015
Sales Promotion: An Overview.
http://shodhganga.inflibnet.ac.in/bitstream/10603/ 21347/12/12_%20 chapter
%203.pdf. November 16, 2015
P&G. Available: https://www.everydayme.com.ph/family/balanced
%20living/article/smile-for-freebies. November 16, 2015
Sampling. Boundless Marketing. Boundless.
Available: https://www.boundless.com/marketing/textbooks /boundlessmarketingtextbook/ personal-selling-and-sales-promotion-14/promotionmethods-in-consumer-sales-96/sampling-475-7610/. 21 Jul. 2015. Retrieved
November 23, 2015
Product Sample. Available: https://en.wikipedia.org/wiki/Product_sample.
November 23, 2015
Joseph, C. Consumer Sales Promotion Techniques.Available:
http://smallbusiness.chron.com /consumer-sales-promotion-techniques1035.html. November 23, 2015
Product Demonstration. Available:
https://en.wikipedia.org/wiki/Product_demonstration. November 23, 2015
The First Free Sample: Benjamin Babbit.
http://www.gcmarketingservices.com/index.php /2012/07/the-first-freesample-benjamin-t-babbitt/ July 5, 2012 Retrieved November 26, 2015
Promotional Plan. http://www.businessdictionary.com/definition/promotionalplan.html#ixzz3rRFexDrB. November 16, 2015
Promotion Plan. http://www.smallbusinessnotes.com/marketing-yourbusiness/promotion-plan.html#ixzz3rSS7PNoD. November 16, 2015