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Sales Promotion Introduction and Current Trends WHAT COURSE OBJECTIVES? Course Objectives Understanding of the marketing communications discipline of Sales Promotion Develop models and processes for Sales Promotion as a key component of IMC Understanding of difference between consumer promotion and trade promotion Enhance presentation and writing skills with sales promotion plan development Understand sales promotion tactics Sales Promotion? How do you decide what Sales Promotions to engage? One additional question=> What is your Marketing? What is Marketing? • 3 keywords: –Consumers –Value –Relationships 7 How to get there? Fundamental Marketing Process Overview Business Management • Business objectives • Business strategies Marketing Product Understand Marketing objectives Core marketing strategies Market Consumers Competition Etc. •Needs •Wants •Demand •Target Market •Value Proposition •Positioning Linkage to purchasing behavior: •Needs recognition •Information search •Alternatives comparison •Purchase decision •Post purchase behavior Marketing Mix •4 P’s • For each: -Objectives -Strategies -Tactics Price Placement (distribution) Promotion How to get there? Fundamental Marketing Process Overview Business Management • Business objectives • Business strategies Marketing Product Understand Marketing objectives Market Consumers Competition Etc. • Consumers Needs or Problems •Competition •Market offerings Core marketing strategies •Target Market •Value Proposition •Positioning Price Core baseline applications: • Acquisition • Loyalty • Retention • Winback Placement (distribution) Promotion Value Proposition: Benefits For Price “Your unique competitive advantages set for your Top Target against your top competition” Price More More Benefits Same Less Same Less How to get there? Fundamental Marketing Process Overview Core baseline applications: • Acquisition • Loyalty • Retention • Winback Business Management • Business objectives • Business strategies Marketing Product Understand Marketing objectives Market Consumers Competition Etc. •Needs •Segments •Competitions •Offerings Core marketing strategies •Target Market •Value Proposition •Positioning Marketing Mix •4 P’s • For each: -Objectives -Strategies -Tactics Price Placement (distribution) Promotion Marketing Planning Framework: Focus on Promotion Business Management Marketing Objectives: • Acquisition • Loyalty • Retention • Winback Marketing Understand Marketing objectives • Business objectives • Business strategies Market Consumers Competition Etc. •Needs •Wants •Demand Core marketing strategies •Target Market •Value Proposition •Positioning Marketing Mix •4 P’s • For each: -Objectives -Strategies -Tactics Promotion (IMC) • Advertising • PublicOnline Relations • Personal Selling • DirectMobile Marketing Social Media • WOM Marketing • Sales Promotion Sales Promotion is a direct component of the Promotional Mix Promotional elements vary with the stages of the consumer purchase decision process 18-13 So What is Sales Promotion? WHAT IS SALES PROMOTION? •KEY FOCUS: Temporary boost of sales •KEY ROLE: A short-term incentive to purchase a product •KEY TIMING & MECHANISM: •Towards the end stages of the Consumer Buying Process (alternative comparison, purchase decision) •Alters directly Benefits/Price relationship (Value Proposition) How could you alter the Benefits/Price relationship (Value Proposition) with Sales Promotion? How could you alter the Benefits/Price relationship (Value Proposition) with Sales Promotion? B P = V How could you alter the Benefits/Price relationship (Value Proposition) with Sales Promotion? B P = V How could you alter the Benefits/Price relationship (Value Proposition) with Sales Promotion? B P = V How could you alter the Benefits/Price relationship (Value Proposition) with Sales Promotion? B P = V Value Proposition Alterations with Sales Promotion – Illustration! Price More More Benefits Same Less X Same Less Value Proposition Alterations with Sales Promotion – Illustration! Price More For the same price More Benefits Same Less Same Less Value Proposition Alterations with Sales Promotion – Illustration! Price More Same Less For the same price More Benefits Same Less X X SALES PROMOTION JUSTIFICATIONS? •Acquire new customers •Obtain new product trial and adoption •Boost sales of mature brands •Increase Store traffic generation •Neutralize competitive promotional efforts •Etc. 2 Key Sales Promotion Strategies Consumer Promotion Trade Promotion Let’s be clear! Sales Promotion Objectives •Increase distribution outlets •Increase shelf space •Increase in-store presence •Expand selling season •Increase purchase frequency •Increase transaction size •Increase usage occasions •Generate trial Sales Promotion Planning Core baseline applications: • Acquisition • Loyalty • Retention • Winback Marketing Management • Marketing objectives • Marketing strategies •Target Market •Value Proposition •Positioning Consumer Promotion Sales Promotion Objectives Understand Target purchase behavior •Price sensitivity •Brand loyalty •Etc. Sales Promotion Target Sales Promotion Desired Results Sales Promotion Mix •Coupons •Games •Discount •Bonus packs •Etc. Trade Promotion •Free goods •Advertising allowance •Trade coupons •Etc. Temporary Purchase/ Sales Boost Just to have an initial idea: Available Consumer Sales Promotion Techniques! Type Coupon Bonus pack In-Pack/ On-Pack/Near-Pack Specialty Container Continuity program Refund Sweepstake Contest Through the mail Premium Sampling Price-Off Trade Deal Cause-Related Promotions Just to have an initial idea: Available Consumer Sales Promotion Techniques! Type Coupon Bonus pack In-Pack/ On-Pack/Near-Pack Specialty Container Continuity program Refund Sweepstake Contest Through the mail Premium Sampling Price-Off Trade Deal Cause-Related Promotions Just to have an initial idea: Available Consumer Sales Promotion Techniques! Type Coupon Bonus pack In-Pack/ On-Pack/Near-Pack Specialty Container Continuity program Refund Sweepstake Contest Through the mail Premium Sampling Price-Off Trade Deal Cause-Related Promotions Just to have an initial idea: Available Consumer Sales Promotion Techniques! Type Coupon Bonus pack In-Pack/ On-Pack/Near-Pack Specialty Container Continuity program Refund Sweepstake Contest Through the mail Premium Sampling Price-Off Trade Deal Cause-Related Promotions Just to have an initial idea: Available Consumer Sales Promotion Techniques! Type Coupon Bonus pack In-Pack/ On-Pack/Near-Pack Specialty Container Continuity program Refund Sweepstake Contest Through the mail Premium Sampling Price-Off Trade Deal Cause-Related Promotions Just to have an initial idea: Available Consumer Sales Promotion Techniques! Type Coupon Bonus pack In-Pack/ On-Pack/Near-Pack Specialty Container Continuity program Refund Sweepstake Contest Through the mail Premium Sampling Price-Off Trade Deal Cause-Related Promotions Just to have an initial idea: Available Consumer Sales Promotion Techniques! Type Coupon Bonus pack In-Pack/ On-Pack/Near-Pack Specialty Container Continuity program Refund Sweepstake Contest Through the mail Premium Sampling Price-Off Trade Deal Cause-Related Promotions Just to have an initial idea: Available Consumer Sales Promotion Techniques! Type Coupon Bonus pack In-Pack/ On-Pack/Near-Pack Specialty Container Continuity program Refund Sweepstake Contest Through the mail Premium Sampling Price-Off Trade Deal Cause-Related Promotions Just to have an initial idea: Available Consumer Sales Promotion Techniques! Type Coupon Bonus pack In-Pack/ On-Pack/Near-Pack Specialty Container Continuity program Refund Sweepstake Contest Through the mail Premium Sampling Price-Off Trade Deal Cause-Related Promotions Just to have an initial idea: Available Consumer Sales Promotion Techniques! Type Coupon Bonus pack In-Pack/ On-Pack/Near-Pack Specialty Container Continuity program Refund Sweepstake Contest Through the mail Premium Sampling Price-Off Trade Deal Cause-Related Promotions Just to have an initial idea: Available Consumer Sales Promotion Techniques! Type Coupon Bonus pack In-Pack/ On-Pack/Near-Pack Specialty Container Continuity program Refund Sweepstake Contest Through the mail Premium Sampling Price-Off Trade Deal Cause-Related Promotions Just to have an initial idea: Available Consumer Sales Promotion Techniques! Type Coupon Bonus pack In-Pack/ On-Pack/Near-Pack Specialty Container Continuity program Refund Sweepstake Contest Through the mail Premium Sampling Price-Off Trade Deal Cause-Related Promotions Just to have an initial idea: Available Consumer Sales Promotion Techniques! Type Coupon Bonus pack In-Pack/ On-Pack/Near-Pack Specialty Container Continuity program Refund Sweepstake Contest Through the mail Premium Sampling Price-Off Trade Deal Cause-Related Promotions How big is Sales Promotion in the US? How big is Sales Promotion in the US? • $288 Billion in spending in 2004 • 46% (*) • 19% (*) (*) •33% to 70% of CPG’s (P&G, L’Oreal, etc.) marketing budget on trade promotion (**) (*) 2004 Promotion Marketing Association and PROMO Magazine (**) 2011 Comscore Direct (Promotional) Channels continue to gain spending share And all Direct Channels, subject to Sales Promotion integration, continue to grow! Why such a growth? • Results focused • Quick • Measurable • “Easy & inexpensive” Limitations? • Brand building support? • Deterioration of positive brand perceptions • Low volume or thin profitability • Short term bias Sales Promotion is evolving! •Generating immediate sales But also •Altering positively long-term brand value Sales Promotion is evolving! Smart-Sign Tech by MS & Intel Twitter & sweepstakes Coupons Apps Online Coupons Finders Sales Promotion is evolving! So in conclusion! • Sales Promotion has its own planning • Sales Promotion is big • Quick & measurable BUT risky • Sales Promotion is evolving…Digital Marketing 50