Retailers Preference in Sales Promotion

Introduction
RETAILING:
Selling and Providing Goods Service to ultimate consumer for personal Service to ultimate consumer for Household

RETAILING INVOLVED:
Understanding Customer Needs Assortment of merchandise Display Merchandise

TYPES OF RETAILERS : 1- Retailing based on ownership Independent, Chain, Franchise, Leased ,Vertical market system 2- Retailing based on the extent of product lines handled Specialty Store (Health & Glow Store) Departmental Stores(Pantaloons Store) Discount Store (Big Bazaar) Super Markets (Food World) Hyper Market (RPG Group) 3- Retailing based on the services vs. goods Goods : Groceries Services: Car Rental, Annual Maintenance 4- Non-store based retailing Direct Selling Online Purchase Vending Machine

Sales Promotion Tools

CATEGORIES OF SALES PROMOTION TOOLS : Samples Coupons

Rebates
Prizes Frequency Programs Patronage Awards Product Warranties

Price Packs
Premium Cross Promotion Free Trials Tie-in-Promotion

Point of Purchase Displays and Demonstrations

Classification of Sales Promotion Tools

Classifications Economic incentive Psychological incentive
Instant Postponed Monetary Nonmonetary

Examples of sales promotion tools Discount, coupon and rebates Premium and sweepstake
Discount, premium and bonus pack Coupon, sweepstake and rebates Discount and rebates Premium and trial offers

Purpose of Sales Promotion Tools

Simulate Customers Desire Of Immediate Purchasing; Generate Short-term Increase In Sales On A Certain Product; Increase Flow Of Customers; Encourage Repurchases; Stimulate Consumers' Desire To Try Out New Product; Attract New Customers And Encourage Brand Switching; Enhance Retailers Competitiveness And Secure Market Share; Retain And Reward Existing Loyal Customers, In Order To Further Customers Loyalty; Promote Retailers / Brands Name And Reputation; Reinforce Retailers / Brands Image; Match Corporate Plans Through Temporary Incentives

Literature Review
Sales Promotion
By Karen Gedenk, Scott A. Neslin, and Kusum L. Ailawadi
Promotion Instruments
Price Non-Price

Effects of Promotion
Short-term effects Long-term effects

Future Developments
New Technologies Loyalty cards, PSA, Electronic shelf labels, RFID Opportunities for Sales Promotions Better control, Targeted promotion

Literature Review
Effects of Retailer Promotions
Sales of the promoted product

Short Term Effect

Long Term Effect

Store Switching

Product Switching

New Users

Purchase Accleration

Store Loyality

Product Loyality

Brand Switching

Category Switching

Consumption Rate

Stock Piling

Brand Loyality

Category Loyality

Literature Review
Differences in Benefits
Effects
Store Switching Category Switching Brand Switching Store loyalty

Benefit to Retailer

Benefit to Manufacturer

Literature Review
An Exploratory Study of Sales Promotion Activities in Toilet Soap Category: An Insight into Consumer and Retailer Perceptions
By Kureshi Sonal and Vyas Preeta

Study on Retailer Perceptions

Perceptions on Scheme Preference
Retailer perceived price offs as a better form of sales promotion activity. Retailers preferred price offs the most, then bonus pack, premium, contests, in order of importance

Perceptions about Response to Sales Promotion Offers

Younger age-groups were more experimental in nature, amenable to trying new brands

Literature Review
Perceptions about Communications of Sales Promotion Schemes
Word of Mouth and Television Advertising

Perceptions about terms and conditions

Not happy with schemes where their margins were cut

Perceptions about mass media announcements

Mass Media creates Pull- Retailers more willing to stock such brands

Post Promotion Behaviour

Buyer may switch a brand temporarily - Revert to original brand post promotion

Tools used for Sales Promotion

Samples Demos Frequent Shopper

Contests

sale
Coupons

POP/POS

Prizes 2 for the price of 1

Referral Gifts

Coupons
Allows the buyer a reduction in price on specific merchandise or product. Delivered by various channels. Eg: Dominos ,Bru Coffee

Contests
Insists consumers to compete and prizes are on the basis of skill. Winner is decided on the basis of skill rather than luck. Eg : Bids

Demonstrations
Used to show the customers , the performance capabilities of the product. Videos also used for the purpose. Eg : High definition videos played on LCD screens at a home appliance shop.

Referral Gifts
Uses word of mouth advantage. Highly effective. Cash incentives can be given Eg : Hero Honda passport

Samples
Provides the customer with an opportunity to try the product at Zero cost. In-store, door to door , mailer, magazines & newspapers. Sample packs offered at very low price.

Frequent Shopper Programs

Customers get benefited in repeated purchases. Special offers for regular shoppers. Invitation to sponsored programmes. Eg : EMI Schemes, Discount Cards

Point of Purchase (POP) Displays

Promotional signs and interior displays ,often located at the point of sale or alongside displays of merchandise. Improves in-store branding ,sales floor communication and provide information to the customers. Helps retailer to create a buying environment inside the store. Accelerate impulse buying decisions.

Consumer Durables Market in India

Industry Size: Rs 350 billion
Margin Profile: Low margins, Dependent on Volumes Growth Opportunities: Lower penetration coupled with increasing disposable income

Categories:

White Goods
A/Cs, Refrigerators, Washing Machines, Sewing Machines, Watches and Clocks

Brown Goods
Microwave Ovens, Cooking Range, Chimneys, Mixers, Grinders,

Consumer electronics
TVs, A-V systems, PCs, Mobile Phones, DVDs, Digital Cameras

Source: http://www.cci.in/pdf/surveys_reports/consumer-durables-industry.pdf

Trade Promotion in Consumer Durables

Automobiles 70-80% consumers Brand ( Even car model) already decided before actual buying FMCG more of consumer pull advertisement impacts more Consumer Durables
Only 30-40% consumers decide brand before visiting dealer counter Dealer influence balance consumers to go for particular brand

Objectives:
Maintain uniform billing structure Shift burden / Increase Order Size To have better liquidity

Obtain Initial Increased Store Distribution footfall (getting shelf space) Source: http://www.sap.com/india/about/events/worldtour11_mumbai/agenda1.epx

Type of Trade Sales Promotion Schemes in Consumer Durables

Off-Invoice Allowances: Channel partner based normal trade discount Slab based discount Buying Allowance: Discount for product promotion during the specified period on the purchase of certain min quantity. It used to gain more distribution or to maintain the existing one (car scheme etc.)

Type of Trade Sales Promotion Schemes in Consumer Durables

Display &Advertising Allowance: (dikhta hai wo bikta hai) To arrange the product display in a prominent show-window Advertisement in the local media & promotion of special scheme Point-of-purchase display on the shelf corner. (Dealers earn the incentive only after meeting the conditions set by the manufacturer). Bill back allowance: (scratch karo ; aish karo) Special discount for every item purchased during the promotion period. Post promotion period, dealer submit the details Adds any additional promotional allowances Submits the supporting & bill. (ex: scratch cards scheme, etc..)

Types of Trade Sales Promotion Schemes in Consumer Durables (contd)

Slotting allowance: Used in case of brand proliferation. Allowance for the display of the new products with special slotting Retailers get the benefit to improve their shelf design and promotion Merchandise allowance: Product display Less cost to manufacturers Product attractiveness Cash Discount: To have better liquidity To give added advantage to dealer

Factors to be Considered in deciding Retailers Preference

Helps in secondary movement Financial benefits to the customers Generates awareness about new brand/product Stabilizes the volume of sales Creates confidence in the mind of customers regarding quality Raise standard of living

We are Here
Theoretical Discussion Concept Review Literature Reviews Paper Reviews Sector Selection & Analysis Sector Attractiveness

Primary Research Market Survey via Personal Interview, Questionnaire

Retailers Preference

THANK YOU