Sales Promotion

in Integrated Marketing
Communication
Presented by Kraivich K.
Student ID: 3003196
University of Canberra
Instructor: Raveena Singh
Marketing Communication Campaigns M

Agenda
- Sales Promotion Success & Failure Case Studies
- Definitions of Sales Promotion
- Types of Sales Promotion
- Sales Promotion Trends
- Major Decisions in Sales Promotion
- Evaluating Sales Promotion
- Sales Promotions as Brand Builders
- What can consumer/trade sales promotion do?
- Sales Promotion Pitfalls
- Balancing Sales Promotion and Advertising
- Conclusion

CaseStudy : The Success of Sales Promotion in IMC

Pine-Sol
- A general liquid cleaning agent
- Ran a Pine-Sol in Pine Valley sweepstakes
- Winners would travel to Los Angeles to meet the stars
- Association of an ordinary cleaning agent with stars
= enhanced brand image

CaseStudy : The Failure of Sales Promotion in IMC

Domon
- An apparel company, perceived as premium brand
- Came up with the campaign You can get every Domon
product in the stores for as little as 99Baht
- Everybody then bought Domon during discount period
- Too often sales promotion
- The company can never charge high prices again

Definitions
Sales Promotion, a key ingredient in marketing campaigns,
consists of a diverse collection of incentive tools, mostly short
term, designed to stimulate quicker or greater purchase of
particular products or services by consumers or the trade
Philip Kotler
The S.C. Johnson & Son Distinguished
Professor of International Marketing at the
Kellogg School of Management,
Northwestern University

Definitions
"Marketing activities, other than personal selling, advertising,
and publicity, that stimulate consumer purchasing and dealer
effectiveness, such as displays, shows, exhibitions,
demonstrations, and various non-recurrent selling efforts not in
the ordinary routine."
The Official Definition
Proposed by The American Marketing
Association

Types of Sales Promotion

1. External Sales Promotion
(Consumer Sales Promotion)
2. Internal Sales Promotion
(Trade Promotion & Sales Force Promotion)

- Sample
- Coupon
- Premium
- Contest/Sweepstake
- Refund/Rebate
- Bonus Pack
- Price-off
- Event Sponsorship

- Contest and
Dealer Incentive
- Trade Allowance
- POP Display
- Training Program
- Trade Show
- Cooperative Ad.

Sales Promotion Trends

Advertising to sales promotion ratio was 60:40
Todays sales promotion accounts for 60 to 75% due to:1. Price Sensitivity
2. Top Managements acceptance
3. Advertising efficiency
4. More demanding trades

Major Decisions in Sales Promotion

1. Establishing objectives
2. Selecting Consumer-Promotion tools
3. Selecting Trade-Promotion tools
4. Selecting Business- and sales-force-promotion tools
5. Developing the program
6. Pretesting, implementing, controlling and evaluating
the program

Evaluating Sales Promotion

1. Sales Data
2. Consumer surveys
3. Experiments

Sales Promotions as Brand Builders

1. Make sure the promotion is justified
2. Tie the promotion to a brands image
3. Look at every promotion both for the sales
job it can do and as a communications tool

What can consumer sales promotion do?

1. Product Trial
2. Create more uses
3. Build more frequent or multiple purchases
4. Introduce new/improved product
5. Introduce new Package/New Size
6. Neutralize Competitive Advertising or Sales
Promotion
7. Boost sales in low-season
8. Trade up Large size, other products in
the line

What can trade sales promotion do?

1. Obtain Feature Pricing, Display Support
2. Increase / Decrease Trade Inventory
3. Improve Product Distribution
4. Motivate Sales Force & Distributor

Consumer Sales Promotion Pitfalls

(What cant consumer sales promotion do?
1. Cannot build brand loyalty
2. Cannot reverse a decline sales trend
3. Cannot change product acceptance
3. Cannot Compensate for Inadequate level
of Advertising
4. Cannot Overcome Poor Product Problems

Trade Sales Promotion Pitfalls

(What cant trade sales promotion do?
1. Cannot Compensate with a poor sales force
2. Cannot Overcome Poor Distribution from Poor Product
3. Cannot Compensate for inadequate level of
consumer advertising

Balancing sales promotion and advertising

Professor Roger A. Strang concludes that there is a relationship between
advertising and sales promotion
- An increase in Sales promotion budget, with a decrease in
advertising budget, does not help increase long term sales
and profits
- If the ratio between Advertising budget and Sales Promotion
budget falls below the ratio of 60:40, long term sales tend to
decrease
- Advertising helps build brand image and change attitudes than
sales promotion
- Sales promotion can increase short term sales, but can as
well result in a drastic decrease in sales after the sales
promotion campaign

Conclusion
- Sales promotion is a short term solution
- Sales promotion is not a Swiss army knife
- Look very carefully into the problem before
deciding which IMC Tools to use

References
- Kotler Philip (2003), Marketing Management. 11th Edition, Pearson
Education International
- Belch E. George and Belch A. Michael (1998), Advertising and Promotion:
An Integrated Marketing Communications Perspective. 4th Edition,
McGraw-Hill
- Schultz E. Don and Robinson A William (1988), Sales Promotion
Management. NTC Business Books
- Block Brezen Tamara & Robinson A. William (1994), Sales Promotion
Handbook. 8th Edition, The Dartnell Corporation
- Schultz E. Don, Tannenbaum | Stanley, Lauterborn F. Robert (1997),
Integrated Marketing Communications. NTC Business Books