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CHAPTER 13
Sales Promotion
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Copyright © 2009 Pearson Education Canada
Learning Objectives
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
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 2 broad categories:
1. Consumer promotions
 Designed to stimulate purchases by consumers (ultimate
users)
 Help pull the product through the distribution channels
 focus on achieving trail purchase and repeat multiple
purchases and building brand loyalty.
2. Trade Promotions
 Designed to encourage distributors to purchase more
additional volume and provide encouraging merchandise
support to stimulate consumer purchase.
 Help push the product through the distribution channels
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Sales Promotion Planning
In today’s environment, where planners
consider an integrated marketing approach,
sales promotions are not viewed as separate
entities
Sales Promotions are planed at the same time
to ensure that synergies are achieved across all
forms of communications.
Promotion activity must complement the total
marketing effort.
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Sales Promotion Objectives
Objectives of consumer promotions
focus on achieving:
Trial purchase
Repeat or multiple purchases
Building brand loyalty
Objectives of trade promotions focus
on:
Selling more volume of merchandise
Encouraging merchandising support among
channel members that buy and resell products.
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Promotion Strategy
Pull
Marketer
Wholesaler
Retailer
Consumer
Marketer
Wholesaler
Retailer
Consumer
Push
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Consumer Promotion – 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
 Coupons
 Free Samples
 Contests
 Cash Refunds
 Premium Offers
 Loyalty (Frequent- Buyer) Programs
 Delayed Payment Incentives
 Combination Offers
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Coupon Distribution
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Objectives of Coupon
Programs
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:
 Product
 Media
 In-Store at the point-of-purchase
 Electronically
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Average Redemption Rates by
Method of Delivery
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Free Samples
Free product distributed to potential
users in a trial or regular size,
effective for achieving trial purchase.
 In-store samples most common, plus:
 Cross-sampling
 Co-operative direct mail
 Event sampling
 Sample packs
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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.
1. Mail-in
2. In/On Pack
3. 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
 Club Z at Zellers and Bay
 Shoppers Drug Mart’s Optimum Card
The goal is to encourage loyalty through repeat
purchases.
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Delayed Payment Incentives
Consumers are granted a grace period
during which he or she pays no interest
or principal for the item purchased.
Leon’s “Don’t Pay a Cent Event”
Home Depot
For renovations and household repairs, they offer
six-month and one-year interest-free financing
packages
This gives them a competitive edge over
independent contractors who 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 Planning
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.)
 Retail In-Ad Coupons
 Dealer Premiums
 Collateral Material
 Dealer Display Material (P-O-P)
 Trade Shows
 Branded Promotion Merchandise
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Trends in Sales Promotion
Planning
In the packaged goods market there has
been a steady shift toward trade
promotion, largely due to:
 Media Fragmentation
 Demand for accountability
 Buying-Power Concentration
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Sales Promotion Integration with
Marketing Communications
Promotion strategies must be integrated
with other marketing communications
activities. Strategic decisions must
consider:
 Frequency of Promotion Activity
 Promotion/Product Relationships
 Creative Strategy
 Media Strategy
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