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Marketing Basics - Kotler Philip

Sales promotion objectives

The tasks of sales promotion arise from the tasks of marketing a product. The specific objectives of the incentive will vary depending on the type of target market. Among the tasks of stimulating consumers are encouraging more intensive use of the product, buying it in larger packaging, encouraging people who do not use the product to try it out, attracting those who buy competitor brands to it. In the case of retailers, this is encouraging them to include a new product in their assortment, maintaining a higher level of stocks of goods and related products, undermining incentive measures taken by competitors, creating retailers' commitment to the brand and penetration of new goods with their retailers outlets. As for their own sellers, it is encouraging them to support a new product or a new model, encouraging them to conduct more customer visits and encouraging efforts to raise the level of off-season sales.

The choice of means of sales promotion

The solution to the problems of sales promotion is achieved using a variety of different means. At the same time, the developer of the marketing plan takes into account the type of market, and specific tasks in the field of sales promotion, and the current situation, and the profitability of each of the tools used. A description of the main means of sales promotion is given below.

SAMPLES, COUPONS, PACKAGES AT A PREVIOUS PRICE, AWARDS AND ACCOUNT TALONS . These are the main means on which the activity to stimulate consumers is built. Distribution of samples is an offer of goods to consumers free of charge or for testing17. Samples can be distributed according to the principle of “every door”, sent by mail, distributed in a store, attached to any other product or beat them in an advertising offer. Sample distribution is the most efficient and most expensive way to present a new product. The campaign to distribute the new Agri shampoo cost S. C. Johnson & Suns, $ 12 Million

Coupons are certificates that give the consumer the right to the agreed savings when buying a particular product. In 1979, firms distributed 81 billion coupons, i.e. almost 1200 pieces per household. Only 4% of this amount was repaid. Coupons can be sent by mail, attached to other products, included in advertisements. They can be effective in stimulating sales of an already mature branded product and in encouraging consumers to try out the new product.

Packages at a preferential price (they are also called deals with a small discount on the price) is an offer to the consumer of a certain saving against the usual price of the goods. Information about them is placed on the label or on the packaging of the goods. This can be a package at a reduced price, when one option of packaging the goods is sold at a reduced price (for example, two packs at the price of one), or a package package when they sell a set of two related products (for example, a toothbrush and toothpaste). Even coupons are superior in their ability to stimulate short-term growth in sales of packaging at a reduced price.

A premium is a product offered at a fairly low price or free of charge as a reward for the purchase of another product. The “upon packaging” award accompanies goods while inside or outside the package. The package itself may also serve as a bonus if it is a refillable container. A free postal bonus is a product sent to consumers who have provided proof of purchase of a product, such as a box lid. A self-liquidating premium is a product sold at a price lower than regular retail consumers who request it. Today, the manufacturer offers consumers a wide variety of premiums with the company name on them. So, beer lovers of Budweiser can order t-shirts, balloons and hundreds of other products that bear the name of this beer18.

Offset coupons are a specific type of bonus that consumers receive when making a purchase and which they can exchange for goods at special exchange points. First-time merchants who apply credit cards are usually attracted by a new additional clientele. Other merchants use these coupons for defensive purposes, but at the end of the end, the valid coupons turn into a burden for everyone. And then some merchants simply decide to abandon them, offering lower prices in return 19.

EXPOSITIONS AND DEMONSTRATIONS OF GOODS IN SALES . In places of purchase or sale of goods, exhibits and demonstrations are organized. Unfortunately, many retailers do not like to bother with exhibits, signs, posters, which they receive hundreds from manufacturers every year. In response, manufacturers create a more sophisticated exposure design, linking it to their appeals on television or in print and offering to mount it on their own. One of the most perfect in the creative plan in the history of the existence of promotional materials for stores is the exposure design for tights “L'Eggs”, which to a large extent contributed to the success of the brand20.

STIMULATION OF THE SPHERE OF TRADE . To ensure cooperation between the wholesalers and retailers, manufacturers use a number of specific techniques. The manufacturer can offer credit for the purchase, that is, provide a discount on the price of each box of goods purchased in a certain period of time. Such an offer encourages dealers to make large purchases or to purchase new goods that they usually did not buy.

The manufacturer can offer a credit for the inclusion of the goods in the range, offsetting the costs of the dealer in the presentation of this product to the public. The offset for advertising compensates for the efforts of dealers in connection with the advertising of the manufacturer’s products. The offset for the exposure arrangement compensates for the efforts of dealers to organize special product displays.

The manufacturer can offer a free product, that is, several additional boxes to the intermediary who bought from him a certain amount of goods. He may offer a pusher bonus in the form of cash or gifts to dealers or their sellers for efforts to push his goods. The manufacturer can offer free souvenirs bearing the name of the company, such as pens, pencils, calendars, paperweight, sets of paper matches, notebooks, ashtrays, rulers21.

PROFESSIONAL MEETINGS AND SPECIALIZED EXHIBITIONS . Industry associations hold annual congresses of their members, usually accompanying these events with specialized exhibitions. At such a specialized exhibition, the goods of companies that are suppliers of the industry are presented and demonstrated in action. Each year, over 5600 specialized exhibitions are held, gathering about 80 million visitors. The seller expects to receive several benefits from participating in a specialized exhibition, including identifying new potential buyers, maintaining contacts with the clientele, introducing new products, meeting new customers and increasing current sales22.

COMPETITIONS, LOTTERIES, GAMES . Competitions, lotteries and games provide an opportunity for successful or especially zealous consumers, dealers or salespeople to win something - say, win a cash prize, a vacation ticket or a product. The competition requires that consumers submit something to it - a verse, forecast, offer, etc. The submitted materials are evaluated by a special jury and selects the best of them. The lottery requires consumers to declare their participation in the draw. During the game, with every purchase, the consumer gets something - bingo numbers or missing letters that can help him win some kind of prize. A trading competition is a competition held for dealers or the company's own sales staff in order to encourage them to double their trading efforts over a specific period of time. Those who achieve the highest results receive prizes.

Development of a sales promotion program

As for the comprehensive incentive program, the developer of the marketing plan must make a number of additional decisions regarding it. In particular, the market leader must decide how much intensive incentives to apply, who can participate in the program, how to advertise his incentive event, how long it will last, when it will start, and what funds should be allocated for its implementation.

STIMULATION INTENSITY . The marketer must decide how intensive stimulation to offer. For the success of the event, you must have a certain minimum incentive. A stronger incentive will provide more sales, but at a constantly decreasing sales pace. Some large companies selling packaged consumer goods have full-time sales promotion managers who study the effectiveness of previous activities and issue brand recommendations to managers regarding the most appropriate incentives.

TERMS OF PARTICIPATION . Incentives can be offered either to all, or only to some special groups of people. So, bonuses can only be offered to those who rent box lids. In some states it is impossible to arrange lotteries at all, in other cases, family members of employees of the company and persons who have not reached a certain age cannot participate in lotteries.

MEANS OF DISTRIBUTION OF INFORMATION ON THE STIMULATION PROGRAM . The marketer must decide how to disseminate information about his incentive program and stimulate interest in it. Coupons offering a 15-cent discount on the price of a product can be distributed directly in packaging, through stores, by mail, or using advertising media. Each distribution method has its own level of coverage and costs.

DURATION OF THE STIMULATION PROGRAM . If the duration of the sales promotion event is too short, many consumers will not be able to take advantage of the benefits offered, because just at that time they may not need repeat purchases. If the event is too long, the proposal will lose part of its charge, pushing for immediate action.

CHOICE OF TIME FOR CARRYING OUT EVENTS TO STIMULATE SALES . Trademark managers need to select the calendar dates for sales promotion activities. These terms will be guided by production, and sales service, and distribution service. In addition, it may be necessary to conduct a number of previously unplanned activities, which will require interaction in a very short time.

SUMMARY BUDGET FOR THE STIMULATION OF SALES . Cost estimates for sales promotion activities can be developed in two ways. The marketer can choose specific measures and calculate their cost. However, more often the size of appropriations is determined as a percentage of the total budget.