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Transcript of Sales promotion
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Sales Promotion
The wonders and the wounds
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Promotion Mix / Communication Mix (PR) Sales Promotion PR Selling Advertising
Below the line Above the line
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Two Types of Sales Promotion Consumer Promotion Trade Promotion
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What do we want the consumers and trade to do? Buy More Buy Now
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A sales promotion should be Temporary – if not the consumers
would not believe it the next time Great Value Added – they should
find reason to buy now and more
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Trends on Sales Promotion ¾ of the marketing budget is allocated to
sales promotion In 1995, 51% of total adspend represents
trade promotions. 24% on media spending 22% on consumer promotion
Growth in the coupon segment is tremendous in aspirational markets Americans redeem more than 7 billion
coupons annually.
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Why the Growth??? Instant results Faster implementation Measurable Relatively easy and inexpensive
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The Downside of Sales Promotion Brand Erosion Profitability increase is relatively
low Implementation cost and problems Orients marketing managers
towards short term results
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What a sales promotion should be…. Lets go back to the basics Should hit the consumer at a particular
behavioral stage Are marketing communication activities
that change the price/value relationship of a product / service perceived by the target Generating immediate sales Altering long term brand value
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Planning Sales Promotion Who is our target set of
consumers? What is the reason for that
behavior What is the goal of the program Is there a meaningful economics
attached to sales promotion
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Types of Buyers Loyals
Buy a particular brand on a more or less consistent basis
Competitive loyals People who are loyal to the competing brand
Switchers Purchase of various brands in one category
Price buyers Non Users
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Results that are needed …. Loyals
Reinforce behavior Increase consumption Change buying timing
Competitive loyals Break loyalty Encourage brand switching
Switchers Persuade to buy the “right” brand more often
Price Value added to make price less important
Non users Create awareness, create category worth
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Types of Sales Promotions Coupon Bonus Packs In pack, On pack, and Near Pack Specialty container Continuity program Refund Sweepstakes Contest Through the mail Premium Sampling Price off Trade deal Cause related promotion
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Coupons Clip and bring to
the store to exchange
Now it is phone based
Induce loyalty Repeat purchase Keeps the
consumers “locked”
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Bonus Packs Like bundle
pricing but this is temporary
Adds value
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In Pack, On Pack Promotion
It is used to introduce new products / service
Dispose of excess inventory
Use excess overhead
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Specialty Container Increases
product’s perceived value
Uy tignan mo ito meron libreng pitchel
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Continuity Program /Loyalty Cards
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Refund / Rebate Promotion If the product does
not perform, then its money back
Or consume X number of products and get Y FREE
Increases consumer confidence
Loyalty program
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Sweepstakes Chance game
where the consumer has the chance to win something big through purchases
The more purchases, the more tickets
Creates loyalty
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Sampling Used when the
consumer is unaware of the brand or product
Product buying is prone to retail channel based trial
Use when the product can be broken down into smaller dimensions
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Price off promotion Use for slow
moving items Excess
inventory Off season Dislodge
competitors
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Choose the right promotion for the right situation
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ExampleProblem Solution
New product Sampling, on pack promo
Consumers not loyal Rebates, sweepstakes, loyalty cards
Competitors are attacking the market with ads
Price off, free goods, premiums, rebates, etc
Excess inventory
Shelf life is critical
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Consumer Promotion To induce immediate off take from
the shelf To induce trial To buy more of your products To buy immediately
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Trade Promotion Encourages your trade channel to
load up Move inventory from the company
to the warehouse of the trade Distributor or Key Accounts
Deals with promotional tools for staff and sales people who are involved with the trade.
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Sell in (PUSH STRATEGY) Trade Promotion based on
Volume – buy a certain volume to attain a high discount
Prompt Payment – pay on time and get a discount
Free goods – using new products or slow moving products as promotional items
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Volume Promotion It motivates the dealer to buy
more Example
10+1 promotion – buy 10 boxes get one free
Volume discounts Bundle promotion – feature a new
product as freebie
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Advertising Promotion Cooperative advertising
Coke and Julie’s Bakeshop Lock in to the outlet to exclusively
sell your brand
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Cooperative Promotion Co-brandingCo-branding Using another Using another
brand to brand to penetrate the penetrate the marketmarket
Good if the Good if the equity of the equity of the other brand is other brand is high or parallel high or parallel
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Co-branding Can be a strategy
or a promotion It increases margin Synergizes
strength of two brands
Increases profitability due to the higher value perception
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Free Goods Better
profitability Moves higher
volume Economies of
scale
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Trade Advertising Advertisements used as a basis
for booking sales Rationale is consumers will look
for a brand that has ad support
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Massive advertising always leads to higher trade acceptance
Trade will only stock items that will sell
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Personal Selling
Direct SellingDistribution SellingOutlet Selling
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Direct Sales One of the recent
trends in consumer marketing
Direct hit to consumers
Smaller ad spending
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Direct sales Uses human capital as resource Offering high earnings to those
who do not have businesses Home based People get people strategy Very sound business model
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How do they profit? Gross Margin 40% 1st level Commission – 10% 2nd level commission – 8% 3rd Level commission – 5%
AT this point, the company still earns and yet the number of networks grow….
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Direct Sales Meaningful to sales people The consumer saves money Answer to the crisis of power of
retail channels
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Distribution Selling Sales efforts to cover geographic
region Cover relevant distribution
channels
Example: Bonheur Marketing
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Bonheur Marketing Former exclusive distributor of
Marlboro and Philip Morris Covers outlets such as
Supermarkets Sari sari stores Sub distriutors Dealers Luzon wide
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BiC became better when… Distribution was assigned to
FilStar – an affiliate of National Bookstore
That’s why BiC enjoys great retail presence in NBS
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Public Relations
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Advertising
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Key things to remember Creative brief Copy strategy Execution methods Media Media Planning Success tracking
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Creative Brief Brand elements Target segment Reason to buy Current behavior Current perception Desired impression
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Copy Strategy Tagline Plot Mood and Tone Reason to believe Execution Media Media Plan
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Media Plan Medium
Above the line Below the line
Loading Front Back Seasonal Flat
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Media TVC Print Radio Internet
CPM (clicks per million) Ad click Ad impressions Banner or button advertisement Click through Cost per click Spam URL
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Media Billboard – of course they will stay Mall panels Comfort ads Transit ads Non traditional
Corporate gifts Leaflets
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Media Plan Using each medium optimally to
achieve brand objectives It is all about making the right mix
or right allocation of budgets Hitting consumers where it
matters most
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Executions Humor MTV Slice of life Celebrity endorser Testimonial Image model – can be a competent
looking person Performance test
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Just make sure they do not… Laugh and forget which brand is
being advertised Remember the story in the ad and
then forget about the brand Remember the song and then…
ano nga palang brand yun?!
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Things you should remember Matrix or charts or altering SWOT with
TOWS analysis (which by the way is not a marketing tool but a central management tool) DON’T BUY THE IDEA
The basics still work – and it will sans a few alterations
IMC is integrating all communication materials under one big idea
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Remember Life is a journey of learning The moment you get cocky is the time
you die Mistakes are best teachers Do not believe all teachers too… some
of them have issues as well… pick good mentors
Don’t label anything – good or bad Know thy Dharma – know what you are
here for
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Remember Detachment is a great tool Make yourself competent – goal is
not to be employed but employable
Don’t make yourself stagnant – even if your family or husband is rich
Have FAITH
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Remember PR competence is as important as
knowledge Be the best you can ever be (not
Alipin Sagigigilid all your life)
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Thank you for such a wonderful semester… really