Chapter 8

Sales Promotion

8-1 ©2005 Pearson Education Canada Inc.

 Sales Promotion
“Activity that provides special incentives to encourage
immediate response from customers, distributors, and an
organization’s sales force.”

Consumer Incentives to stimulate

Promotion purchase or loyalty.

Incentives to encourage
Trade
purchase and merchandising
Promotion
support by distributors.
8-2 ©2005 Pearson Education Canada Inc.
 Push and Pull Strategies
Pull

Marketer Wholesaler Retailer Consumer

Push
A combination of push and pull works best!

8-3 ©2005 Pearson Education Canada Inc.

 Sales Promotion Planning
“Developing a plan of action for communicating
incentives to designated targets.”

Promotion plans are often devised by external

specialists who are briefed on the assignment.
• Market Profile • Promotion Objectives
• Competitive Activity • Budget
• Target Market Profile

8-4 ©2005 Pearson Education Canada Inc.

 Sales Promotion Plans

Marketing Plan Other IMC

Plans

Sales Promotion
Plan Advertising
Objectives Strategy
Strategies
Tactics

Fulfillment Evaluation
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 Sales Promotion Objectives

• Trial Purchase
Consumer • Repeat Purchases
Promotion
• Brand Loyalty

• Listings
Trade • Sales Increases
Promotion
• Merchandising Support

8-6 ©2005 Pearson Education Canada Inc.

 Sales Promotion Strategy
Promotion strategy involves selecting the right combination
of consumer promotions and trade promotions to achieve the
marketing objectives.

Strategy = Consumer Promotion + Trade Promotion +

Advertising Strategy

Advertising is essential to create awareness and interest in

the sales promotion.

8-7 ©2005 Pearson Education Canada Inc.

 Logistics and Fulfillment

1. Involves decisions about dates, deadlines, and

details.
2. A promotion must run seamlessly from the
front-end (announcing the promotion) to the
back-end (delivering prizes or merchandise to
recipients).
3. Fulfillment is often outsourced to a specialist.

8-8 ©2005 Pearson Education Canada Inc.

 Measurement and Evaluation
Some typical yardsticks include:

• Sales increases in promotion period

• Trial and Loyalty (research may be necessary)
• Number of entries in a contest
• Redemption rates
• Financial Payout

8-9 ©2005 Pearson Education Canada Inc.

 Consumer Promotion Execution

• Media delivery
Coupons
• Product delivery
• In-store delivery
• Cross-product delivery
A price-saving incentive
to trigger new or repeat
purchases.

8-10 ©2005 Pearson Education Canada Inc.

 Consumer Promotion Execution

Free • Regular size

Samples
• Trial size
• In-store taste samples

Free product to
• On-site giveaway
encourage trial
purchase.

8-11 ©2005 Pearson Education Canada Inc.

 Consumer Promotion Execution

•Sweepstakes
Contests
•Games Contests
•Instant Wins

Repeat purchase and

loyalty-building incentives.
They require advertising
support to create interest.

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 Consumer Promotion Execution

Cash • Single Purchase Offers

Rebates • Multiple Purchase Offers
• Slippage Occurs

$ returned to consumers
after purchase has been
made.

8-13 ©2005 Pearson Education Canada Inc.

 Consumer Promotion Execution

• In-pack
Premium
Offer • Mail-in
• With purchase
• Product bundling
An item given free or at a • Bonus packs
discounted price with the
purchase of a good.

8-14 ©2005 Pearson Education Canada Inc.

 Consumer Promotion Execution

• Points programs
Loyalty
Programs • Loyalty cards
• $ rewards

Incentives that encourage

long-term loyalty; database
management initiatives.

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 Trade Promotion

A distributor’s loyalty to any supplier’s products is

influenced by the quality and quantity of trade
promotion offers.
Distributors make money by buying and re-selling
goods. Inventory turnover is very important.

8-16 ©2005 Pearson Education Canada Inc.

 Trade Promotion Execution
A variety of financial incentives are commonly offered
to distributors.

Trade Temporary price reduction to

Allowance stimulate larger purchases.

An additional allowance to
Performance encourage merchandising
Allowance support.

Cooperative An accumulating fund that

Advertising supports retail advertising.
8-17 ©2005 Pearson Education Canada Inc.
 Trade Promotion Execution
Some trade promotion incentives are controversial.

An incentive offered a
Dealer distributor to encourage a
Premium “special” purchase. Often
called “payola.”

Retail representatives are

Spiff offered incentives to “push”
a sponsors product line.

8-18 ©2005 Pearson Education Canada Inc.

 Trade Promotion Execution
Some trade promotions support the personal selling
effort and in-store merchandising programs.

Material used by sales reps in

Collateral presentations (price lists,
Matrial catalogues, brochures, CD-
ROMs, etc.).

Point-of-purchase display
Dealer Display material to encourage
Material purchase (shelf pads, posters,
displays, etc.).

8-19 ©2005 Pearson Education Canada Inc.

 Planning the Promotion
Planning is crucial. Sales promotions are complimentary
activities that must be integrated with other marketing
and marketing communications programs.

1. How frequent should promotions be?

2. What effect will promotions have on brand image?
3. Will promotions enhance brand equity?

Tim Hortons RRRoll Up the Rim meets all of

these considerations positively.
8-20 ©2005 Pearson Education Canada Inc.