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CHAPTER 13
Sales Promotion
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Copyright © 2012 Pearson Canada Inc.
Learning Objectives
 Identify the roles of various consumer and
trade promotion activities in the marketing
communications process
 Outline the nature of various consumer and
trade promotion activities
 Assess the strategies for integrating sales
promotions into the marketing communications
mix
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Sales Promotion
Activity that provides special incentives to
bring about immediate response from:
 Consumers,
 Distributors,
 Organization’s sales force.
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Sales Promotion
Can be subdivided into two main categories:
Consumer promotions
 stimulate consumer purchases (through coupons,
contests and other frequent-buyer programs).
 Help pull the product through the distribution channel
Trade Promotions
 Encourage distributors to purchase more volume and
provide additional merchandise support to stimulate
consumer purchase.
 Help push the product through the distribution
channels
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Sales Promotion Planning
 Today, Sales Promotions are not viewed as separate
entities from advertising
 Sales Promotions are planned at the same time to
ensure synergies are achieved across all forms of
communications.
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Sales Promotion Objectives
 Promotion activity must complement the total
marketing effort
 Should be realistically achievable, measurable,
highly focused, and capable of being evaluated
and modified.
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Pull and Push
Promotion Strategies
 Pull: the organization creates demand by directing
promotional efforts at consumers or final users of a product.
 Push: the organization creates product demand by
directing promotional efforts at intermediaries, who in turn
promote the product to consumers.
Pull
Marketer
Retailer
Wholesaler
Push
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Consumer
Consumer Promotion
Planning
Pull Strategy pulls the product through the channel
Marketer
Distributors
Consumers
Objectives:
 Trial purchase
 Brand loyalty
 Multiple purchase
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Types of Consumer
Promotion Activity
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Coupons
Free Samples
Contests
Cash Refunds
Premium Offers
Loyalty (Frequent-Buyer) Programs
Delayed Payment Incentives
Combination Offers
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Objectives of Coupon
Programs
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Non-brand users to make trail purchase
Maintain current users
Speed up acceptance of a new product
Encourage current customers to repurchase
the brand (build loyalty)
 Attract users of competitive brands
 Encourage multiple purchases
 Increase seasonal sales
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Methods of Coupon
Distribution
Coupons can be delivered to consumers
in four different ways, by:
 Media
 Product
 In-Store
 Digitally
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Free Samples
Free product distributed to potential users,
effective for encouraging trial purchase.
 In-store samples (most common)
 Cross-sampling
 Co-operative direct mail
 Event sampling
 Sample packs
 Experiential (also called On-Site)
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Contests
Contests are designed and implemented
to create temporary excitement about a
product.
 Sweepstakes
 Games / Instant Wins
 Successful contests have significant media
advertising support.
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Cash Refunds (Rebates)
Money returned directly to the consumer
by the manufacturer after the purchase
has been made.
 Reinforce loyalty and multiple purchases
 Slippage commonly occurs
 Successful refund offers require strong P-O-P
support
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Premium Offers
An item offered free or at a bargain price to
encourage consumers to buy a specific
product. It is usually offered three ways.
 Mail-in
 In/On Pack
 Coupon Offer at P-O-P
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Loyalty (Frequent-Buyer)
Programs
A frequent buyer program offers consumers a
bonus, such as points or “play money.”
 Canadian Tire Money
 Frequent flyer programs Aeroplan / Airmiles
 Safeway’s Club Card
 Encourage loyalty through repeat purchases
 Generate data on purchase patterns, combinations
 Allow for “price promotion” without undermining list price
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Delayed Payment Incentives
Consumers are granted a grace period during
which no interest or principal are paid for the
item purchased.
 Leon’s “Don’t Pay a Cent Event”
 Home Depot:
 offers six-month and one-year interest-free financing
on renovations and home repairs.
 offers financing;
 By contrast independent contractors demand payment
when jobs are completed.
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Trade Promotion – Push
Strategy
Pushes the product through the channel
Marketer
Distributors
Consumers
Objectives:
 Secure listings
 Build sales volume
 Secure merchandising support
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Trade Promotion Activity
Three basic objectives: secure a listing,
build volume, and encourage merchandise
support.
 Trade Allowance
 Performance Allowance
 Co-operative Advertising Allowance
Continued…
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Trade Promotion Planning
(cont.)
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Retail In-Ad Coupons
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Dealer Premiums
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Collateral Material
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Dealer Display Material (P-O-P)
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Trade Shows
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Branded Promotion Merchandise
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Sales Promotion
and Media Strategy
 A media mix is usually needed to achieve the
communications goals of a promotion plan
 The budget is spent in a concentrated period to
generate high levels of awareness for the promotion.
 Print Media
 Broadcast Media
 Online Media
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Sales Promotion Integration with
Marketing Communications
Promotion strategies must be integrated with
other marketing communications strategies.
Strategic decisions must consider:
 Frequency of Promotion Activity
 Brand Image and promotions
 Building brand equity
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