Sales Promotion Strategy Flashcards
(48 cards)
Sales promotion strategy
A marketing strategy in which a business uses a temporary campaign or offer to increase interest or demand in its product or service.
Measures and programs that help companies increase their sales
Businesses need appropriate sales strategies when sales are relatively slow or low
Importance of sales promotion strategy
Increasing sales can mean introducing a new product to the market, or businesses wanting to raise awareness of previous products for their audience, sales promotion strategies can influence consumer buying behavior and loyalty.
Three primary strategies for sales promotion
- Pull strategy
- Push strategy
- Hybrid strategy
Pull Strategy
This strategy tries to get the customer to ‘pull’ the product away from the company, in a form of discount, BOGO or buy one get one free, and another special.
Push Strategy
This strategy tries to ‘push’ the products away from the company towards the customer, usually through B2B or business to business sales.
Parent companies will reward distributors and retailers for taking additional.
Hybrid Strategy
This strategy is a combination of push and pull strategy in which the company will use a push strategy to move products, and then a pull strategy to encourage purchasing from retailers.
Sales Promotion Techniques
- Know your audience
- Emphasize scarcity and/or urgency
- Align your sales promotion with your company
Types of sales promotions
- Consumer
- Trade
Consumer sales promotions
A valuable marketing strategy that aims to drive customer engagement, increase sales, and enhance brand awareness by targeting the end consumers. The main motive of consumer-oriented promotion is to increase sales directly by attracting new customers and wooing existing ones. Oftentimes, these are short-term techniques designed to achieve short-term objectives.
Examples:
●Free Samples
●Free Gifts
●Discounts/Discount Coupons
●Exchange Schemes
●Finance Schemes
●Shipping Schemes
●Bundle Discounts
●Bulk Purchase Deals
Trade sales promotion
A promotional incentive directed at retailers, wholesalers, or other business buyers to stimulate immediate sales. The objectives can be to influence retailers to carry a new product, rejuvenate stagnant sales, and keep products well-stocked.
Offers are provided within the trade channels with an aim to woo retailers, wholesalers, agents, or distributors. This is done to get more shelf space as compared to competitors, motivate the dealers to sell more of the brand’s products and to increase the sales indirectly.
Examples:
●Point-of-Purchase Displays
●Trade Shows
●Push Money
●Deal Loaders
●Trade Deals
●Buying Allowances
Promotion mix
A combination of different marketing communication tools or tactics that a company uses to promote its products or services to its target audience. It includes various elements, strategies, and tactics that effectively communicate a product or service’s value and persuade customers.
A combination of all of these strategies may be the most successful for the campaign, and you can also choose what you want to apply.
Three elements of promotion mix
budget, tools, and strategy.
FOUR METHODS TO DETERMINE A PROMOTION
- Percentage of sales method
- Affordable method
- Objective-task method
- Competitive party method
TYPES OF PROMOTION MIX
- Advertising
- Sales Promotions
- Public Relations
- Personal Selling
- Direct Marketing
- Branding
Three elements of promotion mix
budget, tools, and strategy
Percentage of sales method
Managers simply determine a percentage of sales or forecasted sales the company will spend on promotion. The disadvantage of this method is that it is entirely dependent on sales.
Objective-task method
Marketers have to define the objective of the promotion and figure out how the company should allocate resources to achieve set goals. This method helps management understand the relationship between advertising spending and performance.
Affordable Method
Another simple method of calculating a promotion budget, often used by small businesses. The business simply determines how much it can spend on promotion— how much can we afford to spend?
Competitive parity method
Involves setting the promotion budget to match industry averages. However, it fails to consider the qualitative aspects of promotion that each company has different advertising needs. Thus, only the company itself knows how much it should spend on promotion.
Promotion mix strategies
- Push strategy
- Pull strategy
Push strategy
A push strategy involves ‘pushing’ the product to the customer. Push strategies start with the product’s producer, who pushes their marketing communications through various channels to intermediaries who eventually promote the product to the final consumer.
The producer’s goal is to encourage these intermediaries to take on the product. They may use various promotional techniques like personal selling or sales promotions to convince channel members to carry the product and promote it to the end user.
Pull strategy
The pull strategy is a marketing and promotional strategy that relies on the customer to “pull” the product from the marketer. This is done by creating demand for a product or service through word-of-mouth referrals, sales promotions, and customer relationship management.
As a result, consumer demand ends up ‘pulling’ the product through various channels. This process is known as a demand vacuum.
Importance of Promotion Mix
Marketers spend endless amounts of time to create the perfect promotion mix to achieve its goal to integrate marketing communications. In maintaining a consistent brand image and position, both the budget and the chosen effective tools must work together to succeed.
Addressing needs and conveying unique selling points ensure the intact delivery of messages across channels - allows the company to evaluate its performance in marketing and generate insights for future campaigns.
