Sales Promotion

Session 1

Introduction to Sales Promotion

Sales Promotion: The objective of any marketing activity is to
sell a product.
One must have the right product at the right price, available at the right

time and place, through the right promotion as per the 4Ps of marketing mix.

Definition: Sales promotion is a process of engaging the

consumer with the objective of stimulating immediate sales through the use of various tools directed towards consumers, trade and the field force in a manner that it enhances the brands core values over the long term.

Introduction to Sales Promotion

Advantages of Sales promotion:
It produces results: Sales promotion produces results by stimulating people to act to try, to buy, to buy more, or to buy more often. It produces immediate results: Sales promotion works during the sales promotion period, very often results can be seen with hours, days or weeks. It prevent competitors: It can prevent competitor entry and hence helps in maintaining market share.

Measurable results: The effects are more measurable and observable as compared to other marketing tools.

Introduction to Sales Promotion

Advantages of Sales promotion:
It gains channel support: It helps in getting shelf space and merchandising benefits at the retails level, motivates the sales people to find new contacts etc. Easy to design and implement: It is possible to calculate costs, effect on sales and sometimes even on competitor sales. Relatively inexpensive: Sales promotion is relatively inexpensive compared to advertisement for example. It doesnt need large budgets. Help build a database: Some promotion campaigns help to build a database by collecting demographic details like age, gender, occupation, address, education etc.

Introduction to Sales Promotion

Disadvantages of Sales promotion:
Short term: Sales promotion are used only for short term results. Erodes the brand equity: Excessive use of sales promotion can actually erode the brand equity, decreasing its perceived value.

It leads to clutter: Excess of it leads to clutter, leading companies to cut each other and thus eroding the bottom line.
Doesnt attract new customers: In mature markets it doesnt attract new customers but only switchers who are deal prone. Forward buying: Consumers can prepone/postpone their buying so as to match the deal time, thereby not affecting the overall sales.

Session 2

Sales Promotion-Types & Purpose

Consumer Promotion: It is directed to offer the consumer
some added benefit to entice him to buy the product.
Sampling: In this case, a small quantity is given away as a sample. Price-offs: The product is offered at a lesser MRP. Quantity deals: More quantity is offered at the same price.

Banded offers: Two or more packs of the same/different product is

sold for same price.

In/Out-product gifts: A gift item is added inside/outside the products. Coupons: It can be redeemed for a price-off, or a discount on

subsequent purchase.
Trading stamps: Redemption points at quantum of purchase. Consumer contests: Contests are run to create an excitement

amongst the target customers.

Sales Promotion-Types & Purpose

Trade Promotion: It is run to elicit a better and quicker
response from the trade.
On-consignment sales: Traders pay only when the products are

sold.
Dealer contests: This is linked to the amount of purchase by a

dealer.
Dealer gifts: Gifting the dealers to maintain good relations. Display contests: Dealers are expected to buy a minimum

quantity and display them, co reps judge the best display and reward them. Point-of-sale material: Traders are given attractive point-of-sale
material to display the product.

Sales Promotion-Types & Purpose

Trade Promotion: It is run to elicit a better and quicker
response from the trade.
Shop board painting: Some companies provide attractive signage

for the shops which could be painted or any other material..

Dealer discounts: Many companies run trade schemes, which can

be in the form of discounts on bulk purchase.

Trade fair participation: Companies fund the dealers participation

to trade meets, trade fairs nationally and internationally.

Dealer meets: Dealers meets are organized at exotic locations

within or outside the country for performing dealers. Cooperative advertising: This involves the sharing of cost of local
advertising between and the company.

Sales Promotion-Types & Purpose

Sales force Promotion: This is undertaken to stimulate
the sales force to better performance .
Incentive schemes: Performance bonuses are awarded for sales

over the targets.

Star awards: Many companies recognize their star performers and

reward them.
Sales meets: Companies organize sales meets in exotic locations. Local ad budgets: Some companies delegate ad budgets to the

staff to enable them to negotiate with dealers for sales. Promotional aids: Most companies provide their staff with
promotional aids like pharma and FMCG Companies.

Sales Promotion-Types & Purpose

Objectives of Sales Promotion:
Attract new customers. Encourage the customers to try new product or brand. Encourage the customers to use the product or service and

make them branch loyal. Counter a competitors promotional activities. To gear-up the short term performance and immediate generation of sale volume. To encourage dealers. To increase the public image of the firm.

Session 3

Sales Promotion Process & Role of Sales person

Sales Promotion Process & Role of Sales person

Session 4

Unconventional promotional Media

Sponsorships: When a company pays money to get
promotional mileage through any event it is called sponsorship.
Event Marketing: Companys promote themselves by sponsoring

periodic/regular events such as Award functions, religious events etc.

Sports marketing: The companys utilize sports events to gain

maximum mileage by sponsoring the tournaments or teams.

Cause marketing: Cause marketing is done for cause, it refers to

activities that are undertaken to promote causes such as those relating to environment, health, security etc.

Unconventional promotional Media

Merchandising: It refers to that promotional activity which
involves the proper placement and promotion of the product or service at the point of purchase.
Point-of-sale material: Point-of-sale material includes promotional

material that a company uses to promote its products at the store like shop board paintings, product baskets, shelf strips, display stands etc.
Gifts: Gifting the customers at the product or service purchase point.

Licensing/Franchising: The company employs franchisees/licensee in

order to expand the network by keeping the quality consistent.

Unconventional promotional Media

Marketing services: Marketing services are those that a
company provides to support its sales activity.
Packaging: A products packaging is given particular attention in order

to project the right image to the customer.

Trade shows & Exhibitions: Participating in various trade shows and

exhibitions help to display the products and services.

Customer service: Having customer service outlets or providing with

toll free service nos so as to ensure customer satisfaction.

Unconventional promotional Media

Van promotions: Van promotions involves promotion of a
companys products through the use of motorized vans.

Mobile advertising: Promotional messages take the form of text

message to notify customer deals, and other promotional campaigns.

Word of mouth: It is basically a direct communication about a

service, product, business, experience or event between human beings who have had some experience of the product/service.

Village fairs: Promotional campaigns are targeted at the

local/national village fairs conducted at various parts of the country.

Internet Communication: It can be good medium to attract

new customers and also soliciting feedback from the existing ones.

Unconventional promotional Media

Personal Selling: Facilitating sales through a person, ex:
Pharma products.

Out of Home Media: Using media literally on the streets, can be

static or also transit.
Hoardings. Shop boards Kiosks Bus shelters Railway stations/Airports Wall paintings In-stadia advertising Neon signs Gas balloons Human hoardings

Session 5

Budget determination
Pre-determined budgetary method: This is based
on industry traditions and judgments, with no deep-rooted scientific analysis
Affordable or All-you-can-afford method: A firms decide to spend as

much as they can afford on promoting a brand, net of all the expenses.
Percentage of Sales Method: The expenditures are budgeted at a

specified percentage of sales of the current year, previous year of average of few years.
Unit of sales method: In this method, a predetermined amount is taken

as budget per unit of item sold, either in the past or in the future.
Industry Standards or competitive parity method: Companys match

the industry average or spend what their competitors do , either absolutely in rupee terms or percentage of sales.

Budget determination
Strategy based budgetary method: This is based
on the objectives that need to be achieved and the strategies needed to fulfill them.
Objective and task method: A firms decide on budgets after setting

the objectives, and outlining the tasks to be done and the cost involved in doing it.
Payout planning method: The expenditures are budgeted by

estimating the sales and the revenue and the time it may take to achieve breakeven and earn profits.
Quantitative models: Budgets can be arrived by using computer

simulation models involving statistical and mathematical tools and techniques like correlation.
Experimental method: This is essentially a trial and error method to

determine the point of optimum returns in the specified time period.

Session 6

Measurement the effectiveness of SP

Measurement the effectiveness of SP

Testing the effectiveness of Sales Promotion: Sales promotion is often focused on influencing sales, but sometimes it is also used to enhance brand equity.
Testing behavioral measures: The maximum impact of sales

promotion is on behavior, measuring can be done as the no of coupons redeemed, data collected through sweepstakes, no of enquires etc.
Testing communication measures: The message, source and media

elements of sales promotion such as copy, visuals, endorser, delivery tools etc can be tested to evaluate the impact on recognition, recall, brand preference etc.

Measurement the effectiveness of SP

What to measure?
How efficient is the category promotional strategy?

Which product promotions have the most impact on the category

growth?
How can I better optimize promotions for the category? How much of my promotional sales are incremental? Which promotions were successful? What is the most appropriate promotional timing and length? Did the promotion steal sales from competitors or cannibalize my own

portfolio?
Did the promotion have a long-term impact on consumer sales?

What is the ROI for promotions and advertising?

Session 7

Presenting promotion Ideas

Preparations before a presentation:
Set an objective for every meeting: Set the objective for the meeting,

anticipate questions and be prepared with the answers.

Control the environment: Get acclimatized with the room you are

going to present in. Visualize where you will be standing and how you will be presenting.
Know the audience: Know the important person in the audience, you

must know what may be the prime concern for the audience.
Rehearse: Rehearsal always enhances your performance and also

helps in finding the shortfall.

Keep props to a minimum: Retain only the props which are important

to make the presentation.

Keep text to minimum: Avoid excessive text, slides. Visuals makes the

presentation beautiful.

Presenting promotion Ideas

The art of presentation:
Start with an agenda

Introduce people
Know where to begin Dedicate time to explain your strategy Present your big idea outstandingly

Present the execution prominently

Make the audience participate Sound convincing

Presenting promotion Ideas

The art of presentation:
Dont contradict, but be honest

Lighten the presentation

Create a stage personality Make eye contact with everyone Overcome nervousness

Preview and summarize

Ask for the order

Presenting promotion Ideas

Steps after a presentation:
Open the forum for questions: Once you are done, be ready to

answer everyone's questions.

Decide what to leave behind: Tell the client that you can produce the

idea once it is approved (instead of leaving the audience with the thought only).
Get everybody's reading on what just happened: Seek for a

preliminary feedback on what everyone felt about the content and your chances to getting approval.
Set your next objective immediately: Outline the next steps before

the client leaves, as it is not easy to get everyone back in the room.
Consider a bounce back: If the client doesnt like your idea, ask for

another opportunity.
Report back to all contributors: Get back to the backend contributors

with reports of the presentation and acknowledgements for their contribution.