S

SALES PROMOTIONTHOMAS HILL

BA 260SUMMER 2012

What is it?

One of 7 aspects of the promotional mix which targets or incentivizes consumers to buy your product or service

Advertising Personal selling Sales promotion Public relations Direct marketing Corporate image Sponsorship

The sales promotion is targeted towards the customer, sales staff and/or the company’s distribution channel or retailer

Usually a short-run tool used to stimulate demand for a certain product or service

Extremely effective and popular amongst most, if not all, major companies in the US Estimates state that sales promotion accounts for

$400 billion per annum The goal: immediate purchase

What can we do as a company that will drive people to want to buy our product or service immediately

Examples:

Free Samples Contests Premiums

Tradeshows Vacation Giveaways

Coupons Loyalty Marketing Programs

Two greatest effects:

Lowers the price of the good or service to increase demand

Adds value to the current product or service to increase demand

As advertising offers the consumer a reason to buy, the sales promotion offers the consumer a reason to buy

Benefits to sales promotions:

A lot cheaper and easier to measure than advertising: Take any major sporting event for example–getting

the necessary airtime to promote your product can cost millions

It’s difficult to objectively measure the impact of many advertising campaigns

Whereas with sales promotions, marketers know the exact number of coupons redeemed, contest entries, free samples given, etc.

Types of Consumers and Goals of Sales Promotion

Type of Buyer

Loyal Customers

Competitor’sCustomers

Brand Switchers

Price Buyers

Desired Results • Reinforce behavior• Increase consumption• Change purchase timing

• Break loyalty• Persuade to switch

• Persuade to buy your brand more often

• Appeal with low prices

• Supply added value

Sales PromotionExamples

• Loyalty marketing• Bonus packs

• Sampling• Sweepstakes, contests, premiums

• Price-lowering promotion

• Trade deals

• Coupons, price-offpackages, refunds

• Trade deals

**Maj-Britt Kimm Chapter 18 Powerpoint slide #8**

“Once marketers are able to understand the dynamics occurring within their product category and have determined the particular consumers and consumer behavior they want to influence, they can go about selecting promotional tools to achieve these goals.” Lamb et. al, 2011.

Some Contemporary Examples

Premiums

Premiums continued..

Loyalty Marketing Programs

Contests and Sweepstakes

Sampling