Integrated Marketing Communications by ProfessorBurgerQueen
Sales Promotion Overview and the Role of Trade
Promotion
- Sales promotions are all promotional activities (excluding advertising, public
relations, personal selling, direct marketing, and online marketing/social media) that
stimulate short term behavioural responses from consumers, the trade (i.e.,
distributors, wholesalers, or retailers), and/or the company’s own sales force.
- Slotting allowances – The fees manufacturers of both CPGs and durables pay
retailers for access to a slot or location that the retailer must make available in its
distribution centre.
- Shift in balance of power from manufacturers to retailers
- Increased brand parity and price sensitivity
- Reduced brand loyalty
- Splintered mass market and reduced media effectiveness
- Emphasis on short-term results in corporate reward structures
, Integrated Marketing Communications by ProfessorBurgerQueen
A Shift in Accounting Rules
- Promotions expenditures are now treated as reductions in sales revenue instead of
as current expenses
- Under the “new” rules, price-discounting promotions are appropriately treated as
direct reductions from revenue rather than as indirect expense reductions
- This can motivate brand managers to allocate relatively more money into advertising
or into other forms of sales promotions other than price discounts
Function of Sales Promotions
● Stimulate sales force enthusiasm for a new, improved, or mature product
● Invigorate sales of a mature brand
● Facilitate the introduction of new products to the trade
● Increase on- and off-shelf merchandising space
● Neutralize competitive advertising and sales promotions
● Obtain trial purchases from consumers
● Hold current users by encouraging repeat purchases
● Increase product usage by loading consumers
● Preempt competition by loading consumers
● Reinforce advertising
Sales Promotions Cannot:
- Compensate for a poorly trained sales force or a lack of advertising
- Give the trade or consumers any compelling long-term reason to continue purchasing
a brand
- Permanently stop an established brand’s declining sales trend or change the basic
nonacceptance of an undesired product
Problems with Excessive Emphasis on Sales Promotion
1) Can damage image of product
2) Diminish brand loyalty
3) Reduce consumption
Considerations For Sales Promotion Programs
1) Size of the incentive
2) Conditions for participation
3) Distribution vehicle
4) Duration of promotion
5) Timing of promotion
6) Total sales promotion budget
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ProfBurgerQueen. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R60,00. You're not tied to anything after your purchase.
