BA 5004

INTEGRATED MARKETING
COMMUNICATION
Dr.C.THIRUMAL AZHAGAN
ASSISTANT PROFESSOR
MANAGEMENT STUDIES
ANNA UNIVERSITY BIT CAMPUS
TIRUCHIRAPPALLI
UNIT III SALES PROMOTION

• Scope and role of sale promotion – definition

• Objectives of sales promotion - sales promotion techniques – trade oriented and
consumer oriented.
• Sales promotion – requirement identification – designing of sales promotion
campaign – involvement of salesmen and dealers – out sourcing sales promotion
• National and international promotion strategies – integrated promotion –
coordination within the various promotion techniques – online sales promotion
MCDONALD’S CASE
• McDonald's, long a leading user of special
promotions to attract consumers to its stores, made
industry headlines with its monopoly game
promotion in 2004.
• McDonald's teamed with Wildtangent, a major
manufacturer of online games, which produced
online demo games modified to include McDonald's
product placements.
• McDonald's then used the games as prizes in its
monopoly contest, and promotion partner
Wildtangent benefited from the introduction of its
games to millions of prospective game customers.
THE ROLE OF SALES PROMOTION
Mass communication technique that offers short-term incentives to
encourage purchase or sales of a product or service.
Consists of media and nonmedia
Sales
Promotion marketing communications employed
for a predetermined, limited time to
stimulate trial, increase consumer
demand, or improve product
availability.

Consumer sales promotion is

directed at consumers.

Trade sales promotion is directed at

resellers.
SALES PROMOTION
Sales
Consumer
Promotion
Factors
Expenditures

The Significance
of
Sales Promotion

Increased Retail Impact of

Power Technology
SALES PROMOTION OBJECTIVES

Immediate Purchases

Increase Trial

Boost consumer inventory

Encourage repurchase

Objectives Increase ad effectiveness

of Encourage brand switching
Sales Promotion
Encourage brand loyalty
Chapter 13 Ver 2e
10 COMMANDMENTS OF SALE PROMOTION
1. Set specific objectives. Undisciplined, undirected creative work is a waste of time and
resources.
2. Know how basic promotion techniques work. A sweepstakes shouldn’t be used to
encourage multiple purchases or a refund to get new customers. A price-off deal can’t reverse a
brand’s downward sales trend.
3. Use simple, attention-getting copy. Most promotions are built around a simple idea: “save
75 cents.” Emphasize the idea, and don’t try to be cute.
4. Use contemporary, easy-to-track graphics. Don’t expect to fit 500 words and 20
illustrations into a quarter-page, freestanding insert.
5. Clearly communicate the concept. Words and graphics must work together to get the
message across.
10 COMMANDMENTS OF SALE PROMOTION
• 6. Reinforce the brand’s advertising message. Tie promotions to the brand’s ad
campaign.
• 7. Support the brand’s positioning and image. This is especially important for
image-sensitive brands and categories, like family-oriented kraft.
• 8. Coordinate promotional efforts with other marketing plans. Be sure to
coordinate schedules and plans. A consumer promotion should occur simultaneously
with a trade promotion; a free-sample promotion should be timed in conjunction with
the introduction of a new line.
• 9. Know the media you work through. Determine which media will work best.
Should samples be distributed in stores, door-to-door, or through direct mail? Does
the promotion need newspaper or magazine support?
• 10. Involve the trade. Build relationships with key resellers.
CONSUMER - PROMOTION TOOLS
Short-Term Incentives to Encourage Purchase
or Sales of a Product or Service.
Consumer-Promotion Consumer-Promotion Tools
Objectives

Entice Consumers to Advertising

Try a New Product Samples
Specialties
Lure Customers Away Coupons Patronage
Patronage
From Competitors’ Products
Rewards
Rewards
Get Consumers to “Load Up’ Cash Refunds
on a Mature Product Contests
Hold & Reward Loyal Price Packs
Customers Sweepstakes
Consumer Relationship Premiums Games
Building
Point-of-Purchase
Displays
CONSUMER SALES PROMOTION

• Objectives of consumer sales promotion:

• Stimulate trial
• Increase consumer inventory and consumption
• Encourage repurchase
• Neutralize competitors
• Increase sales of complementary products
• Stimulate impulse purchasing
• Allow flexible pricing
CONSUMER SALES PROMOTION TECHNIQUES

Price Deals
A price deal is a temporary reduction in the price
of a product. There are two primary types of price
deals: cents-off deals and price-pack deals.

Coupons A coupon is typically a printed certificate giving

the bearer a stated price reduction or special
value on a specific product, generally for a specific
period.

more
CONSUMER SALES PROMOTION TECHNIQUES

Rebates A rebate is a cash reimbursement to a buyer for

purchasing a product. The consumer must mail a
rebate form, the purchase receipt, and proof of
purchase to the manufacturer.

Cross- Promotions A cross-promotion (tie-in), is the collaboration of

two or more firms in a sales promotion.
Crosspromotions enhance the communications
effort of all the participating firms.

more
CONSUMER SALES PROMOTION TECHNIQUES

Contests, Games
A contest offers prizes based on the
skill of contestants. A sweepstakes offers prizes
based on a chance drawing of participants’
names. Games are similar to sweepstakes, but
they cover a longer period.

Premiums An item given free or at a bargain price to

encourage the consumer to buy more quanity is
called a premium.

more
CONSUMER SALES PROMOTION TECHNIQUES

Sampling A sample is a small size of a product made

available to prospective purchasers, usually free
of charge.

Advertising
Specialities An advertising specialty, also called a
promotional product, is an item of useful or
interesting merchandise given away free of
charge and typically carrying an imprinted name
or message.
TRADE SALES PROMOTION
Short-Term Incentives That are Directed to
Retailers and Wholesalers.

Trade-Promotion Objectives Trade-Promotion Tools

Persuade Retailers or
Wholesalers to Carry a Brand Price-Offs Premiums
Give a Brand Shelf Space Allowances Patronage
Displays
Rewards
Promote a Brand in Buy-Back
Advertising Discounts
Guarantees
Push a Brand to Consumers Push Money
Free Goods
Specialty
Contests Advertising
Items
TRADE SALES PROMOTION
• Objectives of trade sales promotion:
• Gain/maintain distribution
• Influence resellers to promote product
• Influence resellers to offer price discount
• Increase reseller inventory
• Defend against competitors
• Avoid reduction of normal prices
TRADE SALES PROMOTION TECHNIQUES

Trade Allowances Trade allowances are short-term special

allowances, discounts, or deals granted to
resellers as an incentive to stock, feature, or in
some way participate in the cooperative promotion
of a product.

Dealer Loaders A dealer loader is a premium given to a reseller to

encourage development of a special display or
product offering.

more
TRADE SALES PROMOTION TECHNIQUES

Trade Contests A trade contest typically associates prizes with

sales of the sponsor’s product. Trade contests
generate interest, which makes them useful for
motivating resellers.

Point-of-Purchase Point-of-purchase displays are

Display generally used at the retail level to call customer
attention to a featured
product.

more
TRADE SALES PROMOTION TECHNIQUES
Trade Shows
A trade show is a periodic, semi-public event at
which suppliers rent booths to display products
and provide information to potential buyers.

Training Programs Some manufacturers sponsor or pay for training

programs for customer employees.

more
TRADE SALES PROMOTION TECHNIQUES

Push Money Push money, also called spiffs (for special

promotional products incentive funds), is what a
manufacturer pays retail sales- people to
encourage them to promote its products over
competitive brands. Giving credits too supported
by this promotional tool.
PROMOTION FOR SALES FORCE
These sales promotions are aimed and designed for the sales people.
These schemes are expected to motivate the sales force to deliver better results
all the year round. Some sales promotion schemes for the sales force are
mentioned below:
sales contests•
sales incentives•
awards and prizes•
roll of honour•
foreign tours•
sales training
PROMOTIONAL STRATEGIES IN VARIOUS STAGES OF THE PRODUCT LIFECYCLE

• Strategies in the introduction stage•

• The first and foremost strategy in this stage is to make the product available in the trade channel. Sales
promotion strategies like free trials, free test rides, demonstrations and free samples are adopted by
companies. Since store traffic is high, personal selling effort is also very high.
• The company can adopt the ‘rapid skimming strategy’ which means launching of a product at a high price and
a high promotional effort. A second option is ‘show skimming strategies’ which means launching of new
product at a high price and low promotional effort. This is adopted to recover profits as early as possible.
• Rapid penetration strategy•
• This means launching a product with a low price but high promotional effort. This helps in gaining the fastest
market penetration and market share.
• Slow penetration strategy•
• This strategy consists of launching of a product at low price and low level of promotional effort. This strategy
is useful in large size markets and where product awareness is quite high.
• Strategies in the growth stage•
• During this stage the company adopts many strategies to sustain the market growth to the best possible extent.
• Some of the strategies are
• Improved product quality..
• Improved styling..
• Improved packaging..
• Addition of new features..
• Identification of new markets and segments..
• Enhancement of distribution channels..
• Reduced advertising expenditure..
• Enhancement of production levels of the product..
• Strategies in the maturity stage•
• Many sales promotion tools like discounts, increased advertising, incentives to dealers, gifts to consumers,
demonstrations and dealer contests are some of the strategies used in the maturity stage. Product modification is also
a very commonly adopted strategy at the product level.
• Strategies in the decline stage•
• The company experiences various tasks in this stage of the product lifecycle, some of the tasks are as follows:
advertising and sales promotion
• Motivating channel partners•
• Motivating the sales force•
• Identifying weak markets•
• Identifying weak products•
• These are at the manufacturers’ level strategies aimed at traders which are discounts, free schemes, contests, etc.
Strategies aimed at consumers are, gift schemes, loyalty bonus, exchange offers, zero percent finance schemes, etc.
SALES PROMOTION CAMPAIGN DESIGN

1. Set objectives
2. Set budget
3. Use an agency
4. Message selection
5. Media choice
6. Campaign scheduling
7. Campaign evaluation
8. Organization and control of campaign
LIMITATIONS OF SALES PROMOTIONS

1. It typically cannot reverse a genuine declining sales trend.

2. Marketers cannot reasonably expect sales promotion to convert rejection of
an inferior product into acceptance.
3. Sales promotion may even weaken the brand image.
4. Sales promotion has also been blamed for encouraging competitive
retaliation.
5. Short-term volume gain at the sacrifice of profits.
ETHICAL AND LEGAL ISSUES

A scam artist rents space cheap, sets up a

Fake Storefront
store, then starts sending in coupons to
manufacturers for payment. Soon the
store’s shelves are bare, but the “owner” is
still sending in coupons obtained illegally.

A retailer legitimately obtains cash from

Stuffing the Ballot
Box clearinghouses and manufacturers for
coupons handed in by shoppers, but
boosts the take illegally by sending in extra
coupons purchased at steep discounts
from various sources.
more
ETHICAL AND LEGAL ISSUES

Playing the An ambitious operator makes money

Middleman supplying other operators—collecting
coupons by the pound and selling them to
retailers, buying and selling proofs of
purchase, or counterfeiting coupons and
proofs of purchase.

Manufacturers offer big cash rebates on

Redemption Scam
large items to shoppers who mail in forms,
together with proofs of purchase—
receipts, labels, or box tops. A con artist
uses the rebate forms and proofs
of purchase, real or counterfeit, to illicitly
collect refunds without buying products.
SALES PROMOTIONS IDEAS & EXAMPLES
• 1. BIG DISCOUNTS
• Big discounts may be as old as the trade industry, but it’s an evergreen method of
increasing sales volume. We all wait for the summer/winter clearance sale to finally buy
items we’ve spotted but couldn’t afford to buy during the season. There are sales
promotion ideas for retail which you could apply.
• Price cuts are convenient for both customers and retailers. It offers the possibility to buy
more for less and it allows retailers to clear their stocks and sell huge volumes while
keeping the money flowing and the business going.
HABAND, A CLOTHES AND HOME WARE ONLINE SHOP.

Once you click the wheel, you are automatically redirected to their website and served
a pop-up banner, which reveals the size of the discount you get.
2. SPECIAL PRICES

• Special prices are basically price cuts, but psychologically they weight heavier,
especially when you sell everything for a tremendously small price.
• Add a limited period and free shipping, and you’ll get yourself a massive boost
in sales. And a few thousand clients that will come to you for the rest of their
lives. That sounds like a big deal, right?
RUELALA - ONLINE FASHION SHOP
3. FREE GIFTS & GIVEAWAYS

• Sweepstakes are still in fashion. People still hunt for prizes, rewards and free
gifts. This technique suits all types of businesses, and it can be applied to local
business advertising as well as to global scale advertising.
• Example
• Anniversary promotion from BJS travel that offers not one but two grand and
amazing prizes. Plus two first prizes consisting of a 7-day car rental service and
an extra pocket money gift card.
4. BUY ONE, GET ONE FREE

• Women are notorious for being addicted to shopping. The more, the merrier. The
cheaper, the better. This type of sales deal will arouse any woman’s desire.
Paying one item and getting 2 for the same price is just pure ecstasy.
5. REWARD POINTS
• Reward points may not be as exciting as big discounts, but this strategy still
appeals to a large number of people, especially to loyal customers, who buy from
your stores on a regular basis.
6. LIMITED TIME PROMOTION – FLASH SALES

• Flash sales appeal to our sense of urgency and to our fear of missing out on
amazing things. In a world of instant gratification, make your promotion urgently
instant with a limited time period. You can limit your offer to a duration
spanning between 30 days to 24 hours.
7. HOLIDAY PROMOTIONS

• There’s no time like Christmas time to clear your stocks and skyrocket your
revenue. Erase Christmas and replace it with Halloween, Mother’s day, Easter or
valentine’s day and you get the point.
• Holiday promotions are a sure bet on huge sales, provided you have a great
advertising campaign. From the key message to the graphic layout of your ads,
everything must be taken care of.
8. SEASONAL PROMOTIONS

• There are four seasons of the year and thus four extra opportunities for you to
launch sales promotions.
• This is extremely important when you’re selling seasonal products like clothing
and shoes. You need to advertise your spring, summer, fall and winter
collections.  
9. SPECIAL EVENTS & PROMOTIONS

• Countless events are happening every year, from football cups to music festivals.
Your job is to find an event that matches your target audience and use it as a
pretext to sell your products. Or you could initiate a deal with one of the top
athletes or celebrity involved in that event and convince him/her to endorse your
brand.
10. FIRST ORDER DISCOUNT

• You can run this type of sales discount all year round on your website or in your
shops. It motivates people to try your products and ensures a positive experience
with your brand.
11. FREE SHIPPING

• There’s one thing that people consider when buying from an e-commerce
website: the shipping cost.
• Although online shopping is more time convenient and even cheaper, sometimes
we realize we spent more on a product we ordered online than we would have
actually spent if we bought it from a shop in the city centre. That’s because
shipping can get expensive.
12. COUPONS

• Coupons are women’s most sought sales deals. They used to be present
everywhere in women’s magazines, back in the old days of print press. But
digital marketing has taken coupons to a whole new level, keeping up with
today’s woman and her new devices. There’s no need to cut out the coupons
anymore and store them in the kitchen’s drawers. You just have to type in a code
and that’s all it takes to receive a significant discount.
13. COMPETITIONS

• One simple and efficient way of increasing sales and long-term commitment is to
organize a competition. Prize contests have moved from the store area to the
internet a long time ago, which allows us to make use of a wide array of sales
promotion tools.