Unit V- Topics to be

covered

Sales Promotion: Definition, scope- Sales promotion

mix Anju Wilson
Developing Sales promotion campaign Suraj.S
Implementation of sales promotion campaign

Gayathri
Sales promotion Budget and Sales promotion
evaluation Reshma Ramesh

Effect of sales promotion on brand equity Sarath B

Trends in sales promotions- Naveen Anil

Future of sales promotions-Krishna Priya.S

Future of Marketing Communication - Anu

PROMOTION MIX

ADVERTISING: Any paid form of non personal

presentation and promotion of ideas, goods, or services
by an identified sponsor.
PERSONAL SELLING: The personal presentation of a
product or company to one or more potential buyers
PUBLICITY: Creating demand for a business or product by
placing news about it in the media.
DIRECT MARKETING: The business of selling products or
services directly to the public, e.g. by mail order or
telephone selling, rather than through retailers.

DEFINITION
SALES PROMOTIONis a
type of marketing aimed
either at the consumer or
at the distribution channel
(in the form ofsalesincentives). It is used to
introduce new product,
clear out inventories,
attract traffic, and to
liftsalestemporarily.
Examples: coupons,
product samples, point-ofpurchase displays

Objectives of Sales
Promotion
Building Product Awareness:Helps in exposing
customers to products for the first time and can
serve as key promotional components in the early
stages of new product introduction.
Creating Interest: creating interest is often
considered as the most important use of sales
promotion. Sales promotions significantly increase
customer traffic to retail outlets.
Providing Information: some sales promotions do
offer customers access to product information. For
instance, a promotion may allow customers to try a
fee-based online service for free for several days.

 Stimulating Demand:The most important

use of sales promotion is to build demand by
convincing customers to make a purchase.
Special promotions, especially those that
lower the cost of ownership to the customer
(e.g., price reduction), can be employed to
stimulate sales.
Reinforcing the Brand: Once customers
have made a purchase sales promotion can
be used to both encourage additional
purchasing and also as a reward for
purchase loyalty. Eg: Airlines upgrading
from economy class to business class.

Sales Promotion
Advantages
Provides extra incentive
to purchase product
Way to appeal to price
sensitive consumer
Can generate extra
interest in ads
Easier to measure efforts
Encourage repurchase
Encourage brand loyalty

Disadvantages
Often only has short
term impact
Can be abused
Can lead to
promotional wars
Often does not
contribute to brand
image

Role of Sales promotion

TO PROVIDE A
SPECIAL OFFER FOR
A LIMITED PERIOD

PROMOTIO
N

TO INCREASE TRADE
DURING QUIETER
PERIOD
TO BOOST EVENT
TO INCREASE
CUSTOMER
AWARENESS FOR
PARTICULAR
PERIOD

Sales Promotion
Campaign

What is sales promotion campaign ?

A series of advertisements using various

marketing tools that share the same message
and ideas to promote a business or event to a
target audience. The typical campaign uses
different media resources including internet,
newspaper, television, radio and print
advertising.

Outcomes of a sales promotion campaign

Promotional campaign generally consists of three desired

outcomes:
Outcome 1: The promotional message reaches the intended
and targeted audience.
Outcome 2: The message is understood by the audience.
Outcome 3: The message stimulates the recipients and they
take action.

Approaches in developing a sales promotion

campaign
Calculate sales needs or quotas. Concrete numbers help
develop a comprehensive plan.
Research past successful sales and document what customers
bought. Organize the promotion around a product's popularity.
Introduce new products to appeal to the existing client base
and bring in new customers.
Define the type of promotion to create. Calculate how much of
each item needs to be sold to meet quota so you'll know how
much inventory to order. Select a theme and define the time
line.

Contd
Entice customers with a themed promotion. Designing around
seasons or other well-known themes allows to tie in
promotions with shopping holidays.
Keep the promotion simple. An elaborate program pushing too
many products overwhelms many consumers.
Upsell utilizing a loss leader. This technique offers a lowselling product to promote sales of more expensive items, and
hopefully create future revenue.

 Launch an employee-incentive contest.

Promote and advertise. Calculate the advertising
budget. Balance it with the sales quota.
Multiply the ad campaign by publishing online flyers
and coupons.

Steps in developing an effective sales promotion

campaign

Step 1: Assess Marketing Communication Opportunities.

Step 2: What Communication Channels Will Use?
Step 3: Determine Objectives
Step 4: Determine Promotion Mix.

Contd
Step 5: Develop the Promotional Message
Step 6: Develop the Promotion Budget
Step 7: Determine Campaign Effectiveness

IMPLEMENTATION OF
SALES PROMOTION
CAMPAIGN

COMPONENTS OF
IMPLIMENTATION
BUDGET
There are different ways for preparing a budget
1. They set the figure at what they spent last year
,plus a little bit more for inflation and any
expected market growth
2. They set it as fixed percentage of turnover
3. They set it to be the same as or in ratio to , what
major competitors spend
4. They set it as the amount needed to achieve the
defined marketing objectives

 TIMING
When?
How long?
How it relates to purchase frequency?
What lead times intermediaries require?
When you need your promotional concepts
ready?

COMMUNICATION
Every promotion is communicated in or on
material of some kind like wrapping of the
product, sponsored shows or events etc.

STEPS IN IMPLEMENTING A SALES

PROMOTION
For implementing a promotional campaign
we need to go through 3 steps
1. Feasibility
2. Checking
3. Implement

1. Feasibility
1.
2.
3.
4.

List possible concepts

Check the concepts on different bases
Short list and check against objectives
Short list concepts

Checking
The shortlisted concepts should be
checked
Outline plans should be prepared
Visuals and copy also should be checked
Check back to brief ,evaluate and select
Top concept
Define success

 Implementation
Finalize copy and design
Finalize communication materials
Finalize administration
Finalize offer materials
Establish evaluation
Check all legalities
Make detailed operational plan
Run the promotion
Evaluate

Sales promotion budget

and sales promotion
evaluation

How are sales affected by

sales promotion?
There are four basic mechanisms involved
1. Brand switching: The objective of some sales promotions is to
induce brand switching, which is encouraging consumers to
purchase the promoted brand instead of the regular brand that
would have been purchased had there been no sales promotion.
2. Repeat buying: Sales promotions influence the consumers in
a manner that increases the chances of purchasing the same brand
again in future.
3. Purchasing more, or accelerating timings: Consumers
purchase more quantity than their immediate requirements, or the
purchase timings are changed.
4. Increasing category expansion and consumption:
Consumption of total product category is increased by the
consumers as a result of sales promotion.

Sales promotion budget

The allocation of monetary resources for sales promotion is
determined by the promotion strategy of the firm.
Most major firms keep a contingency reserve .
In most cases, first the total amount of money for promotion
is determined then it is budgeted for different activities .
Before deciding the budget the management should evaluate
relevant factors such as type of product, its stage in PLC,the
market condition (of the company) , the economy in with the
organization functions, the extent of competitive activities etc.
All these factors individually or together might effect the
promotion budget to a great extent.

Techniques
There are basic five techniques that
are used todetermine/ allocate funds
tosales promotion.
Percentage of sales method
Unit of sales method
Competitive parity method
All youcan afford method
Objective end task method

Percentage of sales
method
In most cases and by most firms this percentage of sales
method is used to determine the promotional budget of the
company.
Budget is determined by taking a fixed percentage of sales.
The sales figure taken could pertain to the previous year, the
average of several past years or the forecasted sales of the
year. This decision is more dependent on the current business
scenario and current working of the company. It might be that
the company may consider just last years sales figures under
consideration as they may have made great sales
Under-spending, market opportunities are high
Over-spending, market opportunities are low.

Unit of sales method

This method is commonly used by companies dealing in

high-priced products, generally consumer durable goods
such as four and two wheeler auto-manufacturers,
refrigerators,
washing
machines,
microwave
ovens, electronics and many other items.
Instead of rupee value of sales, as in the previous method,
the base is the physical volume of either the past or
anticipated sales.
This figure of units is then multiplied by a fixed amount
of money to reach the budget amount.
For example, the manufacturer might allocate Rs. 2000/per unit for sales promotion.

Competitive parity method

Many marketers match or base their sales

promotion budget to that of the major
competitors.
The logic attributed to this method is that the
collective minds of the companies in the industry
probably generate promotion budget that are
close to optimal and any departure from the
industry norms may lead to promotion war.

All youcan afford method

In using this approach to budget allocation, the
amount that is leftover after all other relevant
allocations have been made, is earmarked for sales
promotion.
This approach is used, generally, by companies with
small budget, or by some other companies, large as well
as small, when they are introducing a new product.
It is merely an availability oriented budget and quite
unsophisticated.
Apparently, there is no realization that in a
competitive market situation, sales promotion
mainframe sales in many ways.

Objective end task method

Driven by strategy.
Most popular.
Suited for new products as well as existing
products Promotion manager set objective.
Determining how much money would be
necessary for the objective.
Bottom-up approach
Not dependent on past/future sales or how
much the competitor has spent.

SALES PROMOTION EVALUATION

Sales promotions are a common tool for

businesses across a range of industries.
Sales promotion are undertaken to achieve
specific business objectives.
The company should evaluate the volume of sales
for the sales promotion period plus an equal period
before, and at least two equal periods after, the
promotion.
Eg: If the sales promotion lasts a week, the
evaluation period should be at least four weeks,
including one week before and two weeks after the
promotion.

SALES PROMOTION EVALUATION

There are 3 phases for measuring the evaluation of

sales promotion.
Before the sales promotion is offered i.e., pretesting
During the time it is in operation i.e., Concurrent
testing ( or monitoring and follow up) and
After the sales promotion event has ended i.e.,
post-testing.

PRE-TESTING

The
pre-testing
evaluation
technique
determine the effectiveness of a promotional
strategy.
The company may choose to use simulation as
a pre-testing technique to test consumer appeal,
consumer awareness, repeat purchases and the
sense of value.
Using the pre-testing technique, a company
can compare its results against a prior
promotional technique's outcome and eliminate
promotional techniques that failed.

PRE-TESTING CONT
The pre-test can be conducted by using focus groups
and consumer panels .
Another approach, ballot method , consists of kneeling
a ballot paper to a list of consumers. They are requested
to evaluate different illustrated promotion is and vote for
the most right and return the ballot to the firm.
A relatively expensive but more accurate method is a
portfolio test . A portfolio of sales promotion is prepared
and shown to consumers in person and the responses are
noted.

CONCURRENT TESTING

Concurrent testing is applied while a sales promotion

is in progress, allowing the sales manager to modify
the technique as needed.
The assessment is based on weekly or monthly sales
data.
If the promotion is a consumer contest and the
consumer is not required to purchase anything, the
response to promotion can be adjusted by the
number of entries received at some interval and if need
be, the contest period can be extended.
In case of a coupon distribution programme , similar
approach can be adopted by keeping track of coupons
redeemed

POST-TESTING

Post-testing is done after the promotion period is

over.
It assesses consumer awareness and attitude.
Telephone calls, questionnaire mailed to the
consumers and personal interviews are some
techniques of post-testing.
In these methods, the most expensive is
the personal interview method and the least
expensive is the mail.

POST-TESTINGCONT

The information sought pertains to the

promotion event.
To evaluate the sales effect during the posttesting phase, the evaluation takes into
consideration the sales figures both before and
after the promotion.

EFFECT OF SALES PROMOTION

ON BRAND EQUITY

Sales promotions are an important part of a brand's

marketing mix. A good sales promotion will build brand
equity by reinforcing a brand's marketplace position, and
possibly lead to a temporary or permanent lift in sales. If a
sales promotion does not adhere to the brand standards or
appears gimmicky, it can hurt the brand in the long run.

Objective for sales promotion is to enhance or support the integrated

marketing communications effort for a brand or company.While building
or maintaining brand equity was traditionally viewed as something that
was done through media advertising,it has also become an important goal
for marketers as they develop their sales promotion programs.

BRAND EQUITY
Brand equity is the positive values
associated with the brand which are
integral to the brand itself.
Brand equity provides value to a firm in
the form of price premium or competitive
advantage.
A strong brand is an asset to the owner
firm & a threat to its competitors.

FEATURES OF BRAND
EQUITY

BRAND EQUITY MODEL

Effects of sales promotion on

brand equity
Companies want promotions that require
consumers to become more involved with their
brands & offer a way of presenting the brand
essence in an engaging way.
Many marketers are recognizing that a well
designed & executed promotion can be a very
effective way to engage consumers & to
differentiate their brands.
Sales promotion helps in building a brands
equity consists of developing a
favourable,memorable & consistent image.

EXAMPLES

Steps to a Successful Sales Promotion

Understand your brand's current brand image,

value and reputation.
Understand your brand's long-term strategies and
adhere to them.
Know your current consumers and target
audience.
Recognize the capabilities of your sales force.
Understand the relationship your brand has with
your wholesalers and retailers.
Research the results of past sales promotions.
Have a clearly defined objective for the
promotion.
Make sure there is a benefit to the consumer.

CONCLUSION
Both product quality & advertising
have unique roles in building brand
equity.

Types of sales promotion

TYPES

Consumeroriented
promotions

Tradeoriented
promotions

Consumer-oriented
promotions

1.Sampling

2.Couponing
3.Premiums
4.Contests & Sweepstakes
5.Refunds & Rebates
6.Bonus Packs
7.Price-off deals
8.Loyalty programs
9.Event marketing

1.Sampling
A free sample or "freebie" is a
portion of food or other product given
to
consumers
in
shopping
malls,supermarkets, retail stores, or
other venues.
Door-to-door sampling Airwick Aqua M
ist 2011.mp4

Sampling methods
I. Door to door sampling direct delivery to
prospects residence.
II. Sampling through the mail- Small, lightweight
non-perishable products.
III. In-store sampling- effective for food products
IV. On-package sampling- Sample attached to
another product
V. Event sampling In concerts, sporting events
etc.
VI. Internet sampling- Sites providing free samples

2.Couponing
Coupons are given to consumers
which provide some benefit to customers
although they cannot be converted to cash
directly.

Types of coupons
I. Bounce-back coupon In/on pack
coupon that is redeemable for next
purchase of the same brand.

Inducement to repurchase the brand

I. Cross-ruff couponRedeemable on
purchase of a
different product.

II. Instant-couponRedeem at the

time of purchase
immediately.

3.PREMIUMS
A premium is an offer of an
item of merchandise or service either
free or at a low price that is an extra
incentive for purchasers.
Premiums

Free
Premiums

Selfliquidating
Premiums

I. Free Premiums
Free premiums are
usually small gifts or
merchandise
included
in
the
product package or
sent to consumers
who mail in request
along with proof of
purchase.
free premium.mp4
freebie.mp4

II. Self-liquidating premiums

Require customer to pay some
or all of the cost of the premium plus
handling and mailing costs.

4.Contests &
Sweepstakes
Contests
A promotion where people
compete for prizes or money on the
basis of skills or ability.
contest.mp4

Sweepstakes
A promotion where winners
are determined purely by chance; it
cannot require proof of purchase as a
condition for entry.
sweepstakes.mp4

5.Refunds & Rebates

Offers by the manufacturer to
return a portion of the product
purchase price, usually after the
consumer supplies some proof of
purchase.
rebate.mp4
refund.mp4

6.Bonus Packs
Offer the consumer an extra
amount of a product at the regular
price by providing large containers or
extra units.

7.Price-off deals
Reductions are typically
offered right on the package through
specially marked price bags.

8.Loyalty programs
Promotions that offer customers
a reward, such as price discounts and
free products, for frequent
purchasing or other activity are
called loyalty programs.

9.Event marketing
Event
marketing
is
a
promotional strategy that involves
face-to-face
contact
between
companies and their customers at
special events like concerts, fairs,
and sporting events.
Ex: event.mp4

Trade-oriented
promotions
1. Cash bonuses
2.Stock return
3. Credit terms
4. Dealer conferences
5. Dealer trophies
6. Push incentives

1.Cash bonuses
It can be in the form of one
extra case for every five cases
ordered, cash discounts or straight
cash payments to encourage volume
sales, product display, or in support
of a price reduction to customers.
cash bonus.mp4

2.Stock return
Some firms take back partly or
wholly the unsold stocks lying with
the retailers, and distribute it to
other dealers, where there is a
demand for such stocks.

3.Credit terms
Special credit terms may provide
to encourage bulk orders from
retailers or dealers.

4.Dealer conferences
A firm may organize dealer
conferences. The dealers may be
given information of the companys
performance, future plans, and so on.
The dealers can also provide
valuable suggestions to the company
at such conferences.

5.Dealer trophies
Some firms may institute a
special trophy to the highestperforming dealer in a particular
period of time. Along with the trophy,
the dealer may get a special gift such
as a sponsored tour within or outside
the country.

6.Push incentives
It is a special incentive given
to the dealer in the form of cash or in
kind to push and promote the sale of
a product, especially a newly
launched product.

Trends in sales
promotion
1.MDU Activity
2.Samples on traditional occasions
3.Cinema slides
4.Retailers tie-up
5.Putting canopy at right place
6.Paper insert
7.Demo-van

1.MDU Activity (Multi Dwelling

Unit)
In this Process first contact the
Society secretary and convinces
them for a promotional activity inside
the society in any holiday.
Promotional
activity
may
be
Samples, Free gifts, providing a
branding process for car parking for
the society.

2.On Traditional Occasions

The religion of belief is the part
of promotion; As India people have a
big religion of belief in each and
every region.
tradition.mp4

3.Cinema slides
This commonly used Promotional
activity
by
the
colleges
and
institutions most. Because cinema is
the best entertaining medium for the
youth so they got all the information.
cinema slides.mp4

4.Retailers Tie-Up
Trade based sales promotion in
which the manufacturer providing
some benefits and margin to the
retailers to sell their product and
merchandising their retail according
to the manufacturer instruction for
quick and effective sale.

5. Putting Canopy at
Right Place
Canopy Operation is a combination of
advertisement and personal selling
process.
Provides the right information to the
potential customers tie up with the
big shopping centres like BIG BAZAR,
PANTALOONS, SHOPPER STOP etc
Putting Canopy at those points where
people awaiting in aqueue area.

6.Paper insert
The most low cost promotional
activity which is used for local area
frequency.

7.Demo-Van Operation
This is generally used by the
Bike companies Like BAJAJ, HERO
HONDA to show the demonstration
and all the information regarding the
product of that particular company.

Future Of Sales
Promotion
The future of sales promotion merely
depends on the factors like creativity of
promotion strategy, consumer expectation and
the medias. All this will change very
dramatically in coming years.
The major challenge of the future is likely to
be the ability to meet competitive threats from
varieties of competitions.

The Internet is changing how customers

obtain promotions. In addition to websites
that offer access to coupons, there are a large
number of community forum sites where
members share details about how to obtain
good deals which often include information
on how or where to find a sales promotion.
Monitoring these sites may offer marketers
insight into how customers feel about certain
promotions and may even suggest ideas for
future sales promotions.

Switching over to tablet from smart

phones for sales promotion.

FUTURE OF MARKETING
COMMUNICATION

Marketing communicationsaremessagesand related

media used to communicate with amarket.

Marketing communications is the "promotion" part of the

"marketing mix" or the "four Ps": price, place, promotion,
and product.

It can also refer to the strategy used by a company or

individual to reach their target market through various
types of communication.

CURRENT SCENARIO

1. Market is now having a rural-urban mix shape

2. Occupational diversity (Agriculture to other skills)

3. Awareness is spreading fast

4. Indian consumer is being more smart

5. Heterogeneous Demographic Traits

6. Diversity in economic conditions

7. Media advertising is shifting to multiple forms of

communication focusing at target centred niche media.

KEY CHALLENGES
Lack of strategic consistency
Lack of needed skill sets among marketing staff
Scarcity of creativity and innovation
Insufficient marketing budget
Lack of a standard measurement process
Lack of technology advancement support.
Ambiguity on the issue
Complex cultural and social values

What will happen ?

Knowledgeable Consumers

Immediacy of transactions and how the Profile wants to

transact

Decentralisation of where people live and more reliance on

Screen-based technologies.

Consumers creating their own marketing opportunities

Consumers as Advertisers of their own content

3D printing conceptual information and holography

Consumers will want to Find an answer on demand, not

Search,

Consumers lives will be more chaotic, so will need to

convenience providers to help them trade time for money
or favours

Big Data will be transparent, but Big Information will be the

focus for Consumers.

Attention span will be less, but there will be a rapid Judge

and Execution

Consumer profiles will be Real-time, but only if they want

you to see it (intense Privacy laws)

Consumers will demand/expect very high Content quality

and highly intuitive.

Specialized Experts

Ways to plan for future

marketing communications

Gather the right data

Put your recipients in control

Centralize your content, use it everywhere

Operate in real-time