Sales Promotion Flashcards
Sales Promotion: Definition
- “a range of tactical marketing techniques designed within a strategic framework to add value to a product or service in order to achieve specific sales and marketing objectives.”
Institute of Promotional Marketing
Facts about Sales Promotion
- Sales promotion accounts for up to 1/3 of some marketing communications budgets
- Strong interrelationship between direct marketing sector & sales promotion
good sales promotion campaigns generate or refine database for direct marketing - Most direct marketing includes a promotional offer
Growth of digital promotions - Sales promotion is strongly linked with Fast Moving Consumer Goods (FMCG) & retail sector
- Note the continued strong performance of sales promotion over recent years
The effectiveness of Sales Promotion tools
- Tend to have short term reaction new customers switch back after promotion
- Marketer must consider cost/ benefit of discounting
- Sales promotions can damage the credibility of a brand
“dilutes the brand in the long run.” De Pelsmacker et al,2010 - Is this still the case when price promotions are so widespread?
- Clive Humby : “60% of fmcg sales are through price promotion, which is far too much of a reliance on one promotional mechanic, particularly one which erodes brand value.”
Digital/ fast access to discount vouchers
- Vouchers / coupons have been around for >100 years
- Now using the latest technology to the benefit of the
- Consumer: more appropriate, more targeted, instant gratification
- Marketer: more targeted, more opt in, more redemption
- Eg Consumer sees poster- texts key word to a short code- immediate response with bar code to redeem
- Increases impact of advert – can convert to sale
- Consumer receives offer in store or can access discount code whilst shopping
- Smart phone enables opportunity for relationship building & loyalty via coupons
Why Sales Promotion?
- Reward & Retention
Encourages repeat purchase or extra purchase by existing users.
Rewards brand loyalty and adds value - Operant conditioning- B. F. Skinner(1953)-sales promotions can provide Stimuli which increase probability of repetition of the behaviour
- Can also Recall and support advertising at point of sale
Sales promotion - Can enable database collection ( eg text to win)
- Can work beyond short term : Loyalty schemes also encourage brand loyalty
- Facebook etc extends reach and immediacy of sales promotion- special offers- as do apps
Goods related promotions:gifts or “premiums”
- Free gifts
on-pack, in- pack, with pack at time of purchase
Eg DVDs with newspapers - Free mail ins
send proofs of purchase in return for gift - Free trial
free samples on pack or door to door - Collector schemes (forerunner of loyalty scheme)
longer term , collecting towards gifts - Self liquidation offers
Goods related : self liquidation
Self liquidation = pays for itself
buy 9 roll pack for unique reference code
log on and pay £3.99 and
£1.00 from each puppy sold goes to CLIC Sargent childen’s cancer charity
2014: puppy points – collect and redeem as a gift
This year : 25% donation to Unicef
Sales promotion and Operant conditioning (B.F Skinner)
Behaviour which is rewarded reinforces future behaviour
Consumers are aware of this mechanistic process and judge whether the reward ( the sales promotion) is of sufficient value to buy more, trial or switch to the brand with the sales promotion
Suppliers want to influence sales at conative stage, but may also wish to influence long term behaviour through trial
But often once sales promotion ends, purchase behaviour switches away
Prize Promotions
- Contests / competitions: entry form & proof of purchase
eg complete a slogan - Free draws: random chance, no skill or judgement , participants cannot be asked to purchase to enter
- Instant win: pre -determined number of winning tickets
Prize promotions: Attractions
- maximum cost can be pre-determined
a bigger prize can be offered:
‘Win a car’ - potential for publicity spin off
Prize Promotions: Problems
- ‘no purchase necessary’
- legal controls
- strict rules:
- closing date
- judging process
- description of prizes
- announcement of winners
Case Study Example: Tetley Tea and Aztec sales promotion agency
Tetley Green Tea Spa Prizes
- luxury spa weekend break as a prize for a sampling activity conducted for the new Tetley Green Teas.
- fit with the consumer proposition of being “an easy way to look after yourself”.
- The sample packs contained 3 Green Tea Bags, which were handed out at various events and formed part of a goody bag at events such as Race for Life.
- Prize : win a year’s supply of Tetley Green Tea, a relaxing spa weekend break and a money off coupon
- The promotion was also featured on the Tetley website
Tetley Tea: Sales Promotion technical side
Receiver of sample pack with promotion logs on to website
Data capture including optional opt in for future offers
Potential for longer term relationship following this first contact
SMS campaigns also provide a fast track to data capture:
Text your answer to a competition
Text to get sent a voucher
Prompt to key in name, address etc
Provides an ‘opt- in’ database of prospective customers
Emotional Appeal
to enhance brand image
Sponsorship extended to sales promotion
eg Robinsons & Wimbledon competition
- Personality / celebrity sales promotions
eg Sainsbury active kids voucher scheme advertised with - David Beckham & Ellie Simmonds
http://www.j-sainsbury.co.uk/media/latest-stories/2013/20130222-an-active-childhood-stays-with-you/ accessed 28.2.13
- Charity link promotions
brand donations to charity eg Andrex / Unicef 2014-16
- Character merchandising
McDonalds/ Disney promotion- Happy meals
Cause related: charity link sales
- KEY TO SUCCESS IS MATCHING THE GOOD CAUSE / LINK TO THE TARGET MARKET
- Must not appear exploitative, but worthwhile
Sainsbury’s active kids - “we’re encouraging everyone to take up an activity with our great new equipment for all ages and abilities.”
- Over £100 million worth of equipment and experiences have now been donated since we started up in 2005
