Sales
promotion (below the line) covers all the activities you devise to
increase sales apart from media advertising (above the line).
Sales promotions are more tactical than strategic
Sales
promotions should be regarded as tactical rather than strategic
programs. They are implemented to achieve short-term tactical goals as
compared with media advertising, which has more of a long-term
cumulative effect. The exception to this is retail advertising of the
kind used to promote a sale or a short-term special offer.
The
scope of sales promotion is almost open ended. It embraces such diverse
programs as:
Special discounts
Introductory offers
Loss leaders
Coupons
Competitions and contests
Trade and sales force
incentive schemes
Premium offers
Product catalogues
Trade shows and exhibitions
Note
that all of the above should be regarded as more short-term value (up
to three months) than long term.
Promotions can vary from the simplistic
'blackboard' or letterbox drop offer to a
comprehensive national consumer promotion.
Large-scale promotions are often devised and handled by specialised
promotion agencies that operate in much the same way that advertising
agencies coordinate media advertising.
Because promotions have a more immediate effect than media advertising
it is easier to analyze and measure responses, experiment with
different formats and offers and to arrive at successful formulas.
Trade
shows and exhibitions are also regarded as a legitimate effective form
of sales promotion – particularly for consumer durable
products such as furniture and appliances. Because these are
'big ticket' items they are more of a considered
purchase than fast moving consumer goods (FMCG) such as supermarket
products.
Consumers like the convenience of being able to look at and compare all
the available options under one roof instead of having to go from one
store to another.
Exhibitions are also a valuable way to reach the retail trade as they
are well attended by retail buyers who can see your products in
favourable circumstances and they can more easily allocate the time
needed to gather all the information they require.
Promotion Type
Pros
Cons
Competitions
Can provide short term
impetus to sales
High immediacy
Can be used
strategically to tie in with high or low sales periods
Can gain
'first time' buyers
Sales impetus stops
immediately at end of promotion
Requires high levels of
advertising and merchandising support
Special packaging costs
expensive
In Store Samplings and Demonstrations
Interactive
communication with potential buyers in a buying environment
High sales conversion
rate
Favourably regarded by
retail trade
Can be tied in with
temporary price reductions for additional incentive
Labour intensive
Requires specialised
trained personnel
Requires close
supervision and coordination
Temporary Price Reductions
Provides trial purchase
opportunities which can lead to repeat purchasing
High cost
Leads to lack of brand
loyalty with consumers always buying the current brand 'on
special'
Special Offers (e.g.' buy one
get one free' 'related item tie-ins' etc.)
Can attract new users
to segment/product/brand
High cost.
Difficult to manage
Requires special
inventory
Specially marked costs
expensive/difficult to administer
In-Store Merchandising
Can gain high in-store
product visibility
Reduces reliance on
retailers compliance with planograms and shelf allocations
High labour costs
Requires constant
ongoing effort and management
Sponsorships
Can add to brand image
attributes if skilfully selected
Provides excellent
customer entertainment facilities
Results difficult to
measure
Extensive cost of
add-ons such as advertising, manpower, signage etc.
