WHAT IS SALES PROMOTION?

Sales promotion refers to many kinds of incentives and techniques directed towards consumers and traders with the intention to produce immediate or short-term sales effects. DEFINITION Sales promotion includes incentive-offering and interest-creating activities which are generally short-term marketing events other than advertising, personal selling, publicity and direct marketing. The purpose of sales promotion is to stimulate, motivate and influence the purchase and other desired behavioral responses of the firms customers.

MORE ON IT... Sales promotion offers a direct inducement to act by providing extra worth over and above what is built into the product at its normal price. These temporary inducements are offered usually at a time and place where the buying decision is made. Not only are sales promotions very common in the current competitive market conditions, they are increasing at a fast apace. These promotions are direct inducements. In spite of the directness, sales promotions are fairly complicated and a rich tool of marketing with innumerable creative possibilities limited only by the imagination of promotion planners. Sales promotion is often referred to by the names of extra purchase value and below-the-line selling. Used to achieve short-term sales Sales promotion is a separate and distinct element in the promotion mix and is an important and powerful tool of marketing. The aim of sales promotion is goal-oriented to achieve sales/marketing objectives which are short-term and immediate. Generally, sales promotion is not used to generate long-term results or sales in the future, but rather to generate sales results now. Example: promotions mostly say offer lasts till which is aimed at increased sales till that date. This would induce trials, and even the existing users would increase consumption.

Becoming too common Sales promotion has been traditionally viewed as a non-recurrent selling activity. However, this does not portray the present market conditions where frequent and repeated sales promotion programmes have become necessary to maintain business in many product categories. The reality is that sales promotion has become an all too recurrent activity. Today we find companies in almost all sectors offering some sort of a promotion scheme. These sectors range from automobiles to beverages, from financial services to foods, from household durables to services, from household products to business products, from personal care to textiles and apparel. Here are examples of each: Automobiles: Maruti Suzuki offered a 22-carat, 10gm Tanishq gold coin free and lots of other exciting prizes. Other prizes include 50 Rs. 50,000 Tanishq gift vouchers, 10 Rs. 1 lakh Tanishq gift vouchers and a grand bumper prize of 1kg gold with every new Maruti 800 or Omni. Beverages: Taj Mahal tea offered prizes on filling the coupon present in the ad and mailing it with a flip top of Taj Mahal tea 100, 250 or 500g pack. 1st prize: diamond set worth Rs. 1,00,000, 2nd prize: diamond set worth Rs. 50,000, 3rd prize: Taj Mahal watches. Financial services: Tata finance offered Free Tata Finance credit cards with every car financed. Foods: Nestle offered Free 50g Johnson's baby soap with every 400g Cerelac pack. Household durables: Samsung offered a free book on Indian recipes and free cookery classes. Upto Rs. 2000 off & Borosil dishes worth Rs. 510, on buying Samsung Microwave Ovens. Services: CMC Computer Education offered a set of 3 CDs of Brittanica Encyclopedia worth Rs. 1995 free on enrolling for DST & eDAST. Household products: Kodak Express offered a Dil Chahta hai T-shirt free with any Kodak camera. Business products: Godrej offered prizes like a Ford Ikon car, Godrej air conditioners, Godrej auto clean washing machines and more on purchase of Photocopiers and Digital Multi-function products.

 Personal care: Fem had an offer of save Rs. 79 on buying a 1-litre pack of Fem soft gentle soap. Textiles and apparel: Bombay Dyeing had the Bombay Dyeing Lao Diamond Pao Offer. 6990 diamonds to be won, on buying Bombay Dyeing products worth Rs. 300 and scratching the card available. The range of tools and techniques of sales promotion includes discount coupons, free samples, contests, games, premiums, sweepstakes, special pack allowances, trade fairs, cooperative advertising, continuity programmes, demonstrations, exchange offers and many others. Sales promotions add value to the product or service which is extra and not built into the product or service. Not only do these promotions supplement the effects of advertising, personal selling and direct marketing but can also create a sense of urgency in customers to buy now because the offer is available only for a limited period. This shows that sales promotions have a direct effect on the customers purchase behaviour. Many types of sales promotion require participation of customers who are encouraged to take some action and invest their time and effort. For example, contests and sweepstakes require some effort on the part of the customer; coupons require clipping, saving and redemption; for claiming the rebate/ refund, the customer is required to send the proof of purchase. In certain types of promotions such as stock display contests or sales contests, the participation of dealers is required. But sales promotions are not always short term. It would be reasonable to say that promotions are reasonably short term because in many product categories, extra discounts continue on a regular basis. Likewise, some product brands always contain in-pack premium. For example, each pack of Bharosa agarbatti contains either a stainless steel glass or a small bowl. Filmfare magazine has a free pack of some product along with it almost all the time. This is a strategic decision of giving extra value to customers at a reasonable price, thus making it much more attractive to buy. This is possible because it has the strong financial backing of the Bennett & Coleman group.

Writing about sales promotion tools, Prof. Philip Kotler observes they have 3 distinctive characteristics. 1. Communication: they gain attention and usually provide information that may lead the customer to the product. 2. Incentive: they incorporate some concession, inducement, or contribution that gives value to the consumer. 3. Invitation: they include a distinct invitation to engage in the transaction now (offer valid till or till stocks last) Major users of sales promotions are marketers of soaps, detergents, toiletries, soft drinks, toothpastes, tea, coffee, footware, textiles, readymade garments, consumer durable goods, music systems, autos, televisions, washing machines, microwave ovens, refrigerators, magazines and many other household items. In fact the list of product categories using sales promotion is ever-increasing, no matter what the product category, it could be staples, impulse goods, emergency goods shopping goods, speciality goods, unsought goods, industrial products, or different types of services. Sales promotion is now established as an important and increasingly respectable element of the marketing communication tools. Sales promotion expenditures are increasing dramatically, and economic recession is most likely to fuel this trend further.

DIFFERENCE BETWEEN ADVERTISING AND SALES PROMOTION

Advertising By using a variety of persuasive appeals, it offers reasons to buy a product or service. Appeals are emotional or functional in nature Time-frame is long term The primary objective is to create an enduring brand image Indirect and subtle approach towards persuading customers to buy a product or service

Sales Promotions Besides giving reasons in the form of different appeals, they offer incentive to the consumers to buy the product or service now. Appeals are rational Time frame is short term To get sales quickly or to induce trial. Direct in approach to induce consumers to buy a product or service immediately by temporarily changing the existing pricevalue relationship of the product or service.

But both advertising and sales promotions go hand in hand. Both are very essential to achieve success. Both are complementary to each other.
THE ADVANTAGE OF ADVERTISING FOLLOWED BY PROMOTION OVER ONLY PROMOTION

Promotion alone

100 P P = promotion P P

sales 150

Advertising then Promotion

A P

A P

A P

RELATIVE COMMUNICATION STRENGTHS OF ADVERTISING AND PROMOTION A = advertising P = promotion Advertising

Category Need

Brand Awareness

Brand Attitude

Brand purchase Intention

Purchase Facilitation

C F B Promotion

The width of arrows denotes the extent of effectiveness CFB = consumer franchise building

REASONS FOR RAPID GROWTH OF SALES PROMOTION There are a number of reasons that are favourable to the growth of sales promotion: Increasing Competition The air of change is gaining momentum after the introduction of economic liberalisation.Due to increase in competition, companies are finding it increasingly difficult to compete on quality. They are therefore resorting to more and innovativemethods of sales promotion. To break away from the clutter, Samsung introduced the phod ke dekho and phir se phod ke dekho offers, which helped increase sales. Customers Have Become More Price Sensitive This increased price sensitivity is a direct result of rampant inflation. Economic recession is likely to fuel this trend further, as consumers and dealers become more sensitive towards prices. The case of Akai TV presents an interesting example. This television started introducing quite attractive deals, one after the other and gained a substantial share of the CTV market. Continuous promotions have affected the price perceptions of consumers across the product category, and today the situation is such that customers in general look or wait for promotional deals on their preferred brands of CTV. They are not much moved by the advertising that might extol about the highly advanced features and quality of most brands. They usually consider buying CTVs on price cuts. Sales Promotions Generally Create An Immediate Positive Impact On Sales Advertising, personal selling and other methods of promotion produce slower sales response compared to sales promotion. Sales promotions are mostly for short duration, for a specified period, leading to a sense of urgency in consumers to buy now. This creates an immediate positive impact on sales. With careful planning, it would not be difficult to measure the impact on sales volume and profit, and see the consequences of running the promotion even on weekly or daily basis. Godrej offered a promotion scheme on its washing machines by cutting down the price from Rs. 14,999 to Rs. 13,000. It also gave away a free VIP suitcase, and offered 0% interest loans. Sales went up by 70% shortly.

 Products have become more standardised In many product categories, there is a proliferation of brands; many of them are line extensions and me-too brands. Most brands are being perceived by consumers to be more or less similar within a given price range because of the inability of manufacturers to develop truly differentiated products. Under these circumstances, advertising messages are unable to strongly influence the consumers perceptions and create brand franchise. As a result of these perceptions of similarity among brands, marketers have no way but to compete on the basis of extra benefit offered through sales promotion. Competing companies struggle to capture market share by using every tool likely to bring sales success. Standard Chartered had a scheme of Win Rs. 1 lakh on applying for a Standard Chartered credit card. HSBC came up with a scheme of Upto 25% off at select restaurants on using an HSBC credit card. Consumer Acceptance As competition intensifies and promotions proliferate, consumers have learnt to earn the rewards of being smart shoppers. Over a period of time, they have also learnt that brands on promotion are not necessarily of lower quality. Woodland has a scheme of upto 50% off on Woodland shoes and apparel. This learning based on experience, gets transferred to other product categories as well. Consumers have learnt that promotions are being extended to many product categories where such promotions were unheard of. Expectations Of Price Decrease With the entry of many different brands of consumer durable products in the same product category, consumers anticipate that the prices of durable goods will come down. This encourages them to postpone their purchases. To speed up the purchase in this segment of consumers, sales promotions are an effective and attractive method. Consumers evaluate the incentives associated with their purchase decision and are motivated to act now, rather than wait for the anticipated decrease in price. The marketers should ensure that the extra benefit is attractive enough to create a sense of urgency in consumers.

Samsung offers upto Rs. 8,000 off on exchanging an old refrigerator for a new Samsung refrigerator. Advertising Has Become More Expensive And Less Effective All the advertising media have become quite expensive. Audio-visual medium, which is considered as the most effective for short-duration ads, may cost in excess of Rs. 1 lakh for a 10 second exposure during prime time. In many cases, consumers have reached a point of boredom due to excessive advertising on TV. Some consumers even consider advertising as an intrusion into their privacy, leading to zapping (surfing channels). Firms with small budgets cannot compete with big companies which spend huge sums of money on advertising. For these small budget firms, sales promotion is a more cost-effective promotion method to produce sales results. A firm that wants to introduce a personal care non-durable consumer product quickly and where the consumers personal usage experience is more important, a sample drop can be quite effective. Gillette is offering a 4 gm. sachet of Gillette series shave gel concentrate free with every 7 o clock super platinum razor. Trade Has Become More Powerful Retailers and wholesalers have become powerful and find themselves in a position to demand extra facilities from the companies. They do not hesitate to play off one manufacturer against the other. In bigger cities, retailing has become more sophisticated and competitive. For example, the shelf-space in any retail outlet is limited. So every manufacturer wants the prime shelf-space in the retailers showroom. This created more demand for prime positions in the retail outlets than what is available, and the retailer cannot oblige every company by allocating prime shelf-space. Companies introducing new products are often under pressure to get a prominent shelf-position to make the product attractively visible. Channel members demand more incentives to get the desired results. Manufacturers do not seem to have any alternatives but to concede to their demands, keeping in view the competitive market conditions. Pepsi offers silver coins to their dealers stocking Pepsi cases during Diwali season. And the promotions offer differs across dealers. Lalwani Dealers (Chembur) of consumer durables are offered tour schemes to Goa or gold and cash incentives in order to push sales. Emphasis On Sales Volumes

Towards achieving the long-term profit goals, manufacturers try to attain high sales volume. Brand managers and product managers find themselves under pressure to achieve short-term sales results for the sake of their careers. Compared to any other promotional method, sales promotion is a more effective method to generate short-term sales volume. Sales promotion has also become more acceptable to top management and the incentives to management are tied up with sales volumes. As competition intensifies, managers generally hesitate to devote more time and resources to building up their brands by sacrificing the short-term results. Sales Promotions Maximise Profits A number of economic theories conclude that a company can maximise profits by using sales promotion. Such promotions can permit price discrimination by allowing the brand to compete in 2 or more different market segments. Sales promotion may allow a premium brand to compete with a lower tier brand among price sensitive consumers. For example, a premium band of toilet soap may be on promotion in some price sensitive markets, while in the remaining markets it is sold at its normal price. Introducing An Element Of Interest There are a number of promotions which are often called interest promotions. Some of the more popular interest promotion techniques are samples, contests, and sweepstakes, free premiums and mail-in premiums. These promotions create an element of interest and excitement, and consumers enjoy these and response enthusiastically to such contests and sweepstakes, etc. Fevicol had recently launched a contest in which one had to choose 3 Fevicol ads which they considered the best, and then complete a slogan I like Fevicol ads because Impulse Buying Is Increasing The number of marginal customers is increasing. Displays at the point of purchases lead to impulse buying by consumers, more so if the items on display are not expensive. There is a popular saying in Hindi, jo dikhta hai, voh bikta hai. This strategy is followed by soft drink majors like Pepsi and Coke on a large scale. They pay huge sums of money to keep their products in front so that they are visible. These are also known as display promotions Sales Promotion Specialists Are Available

As a result of economic liberalisation, the number of management institutions has increased. This has lead to the availability of specialists, who are not only well paid but can handle this specialised work more efficiently in the current market conditions, where sales promotion has become more important.

Excess Stocks Because of increasing number of brands, it is difficult for manufacturers and dealers to anticipate future sales. This, at times, leads to excessive inventories, and the quickest way to clear that, is to go for sales promotion. Footwear companies like Bata, Woodland, etc regularly offer around 50% discount on their products. ADVANTAGES OF SALES PROMOTION Sales promotions have a significant effect on the behaviour of consumers and trades people. Such promotions can bring in more profits for the manufacturers because they permit price discrimination. Price discrimination Producers can introduce price discrimination through the use of sales promotions. They can charge different prices to different consumers and trade segments depending on how sensitive each segment is to particular prices. Coupons, special sales events, clearance sales and discounts are examples to explain the phenomenon. Often such price discrimination are offered in specific cities in the country, Bajaj Auto Ltd. started the scheme on 20th august 2001, where by if you buy a Bajaj Spirit two-wheeler you get Rs.3000/- off, valid only in Ahmedabad. Price concessions are also offered in trade fairs and exhibitions. The Grand Computer Carnival organised by HCL Infosystems Ltd. gives many offers and discounts in their exhibitions. The Strand Book Exhibition sells books at prices lower than the original.

Such price discriminating sales promotions that enable consumers and traders to pay less in certain market area or stores usually bring in more contribution than if one price is charged to all. Such price discrimination also held in adjusting to fluctuations in demand and supply situation

without affecting any changes in the list price. Effect on consumer behaviour As sales promotions are mostly announced for a short period, customers may feel a sense of urgency and stop comparing the alternatives. They are persuaded to act now rather than later. With every 500g pack of Tang, you get a free Tang glass. Offer valid only till stocks last.
Date Company/ Brand Rs. 5 off. Offer Eligibility Applicable Period of In Offer Till Sep 15, 2001.

25 August, Pears 2001 25 August, Sanyo 2001 25 August, Kenstar 2001

On a 75g pack of Pears Oil Clear Soap and Delhi presenting the cutting of the ad.

Free Sanyo digital camera VPC- With every LCD SX560 worth Rs. 40,000. Projector. Price off.

Select Till Sep dealers only. 30, 2001.

On buying Kenstar Limited Select states Tumble Top period only. washing machine. only. Offer not valid in the Upto Sep state of 15, 2001. Tamil Nadu. Till Aug 31, 2001 or till stocks last. Till Aug 31, 2001 or till stocks last.

A 22-carat, 10gm Tanishq gold coin free and lots of other exciting prizes. Other prizes 25 With every new include 50 Rs. 50,000 Tanishq August, Maruti Suzuki Maruti 800 or gift vouchers, 10 Rs. 1 lakh 2001 Omni. Tanishq gift vouchers and a grand bumper prize of 1kg gold. 25 August, Apollo 2001 25 August, Apollo 2001 Travel bag free. On buying two radials.

Bangalore

Personal stereo system free.

On buying four radials.

Bangalore

In our over communicated society and because of selective attention, it is not uncommon to ignore many advertisements. Sales promotion deals such as discounts, debates, coupons, premiums, etc also increased the attention getting power of advertisements and convey the advantages and benefits of the brand, including price information. By using promotions, marketers can reach the deal prone customers and encourage brand switching. Consumers, who buy on promotion deals, consider themselves as intelligent and smart shoppers. Effect on trade behaviour

Short-term promotions present an opportunity and encourage dealers to forward by. This forward buying ensures that retailers wont to go out of stocks. As dealers have more than the normal stocks, they think it advisable to advertise in local media, arranged displays and offer attractive promotion deals to consumers. These actions help in increasing the store traffic. Retailer promotion: Buy Cadburys products worth Rs.3000/- and get any 30 chocolates worth Rs.5 each free. Buy a box of Munch and get 1 Munch free.

The aim is to speed up consumer purchasing from their outlets. Point of purchase displays attract customers, serve as reminders and lead to impulse or unplanned purchases. More customers get exposed faster to new product introductions and retailers perceive less risk in stocking the new products. Some customers by new brand and if satisfied, may become loyal users and repeat purchasers. Regional Differences The South is generally characterised by greater degree of going out and people tend to drink outside the house. The Tamilian, consumer in particular, is value oriented, rational and looks up to film stars, while the Keralite is more international in his outlook. The Bangalorean is as Cosmopolitan as his Mumbai or Delhi counterpart." That sort of diversity, believes Coca-Cola, calls for a corresponding variety in promotions. The place to attract is the retail zone. Coca-Cola recently launched a promotion called ' world of Coca-Cola' covering Chennai in Tamil Nadu and Bangalore and Mysore in Karnataka. It was a value deal, aimed at the consumer disposed towards global- style outings. The consumer pays Rs 20 along with a label of a 500 ml of PET bottle to get a card which entitles him to gifts and discounts at 29 outlets, including those of global chains such as TGI Friday and Baskin and Robbins this, in these cities. About four years ago, Pepsi had a similar promotion with its Pepcards. This, however was on a national level, while the Coca-Cola promotion is South based build retail level activity matters more than it does in the North. The primary aim is to help the retail raise volumes.

DISADVANTAGES OF SALES PROMOTIONS While sales promotion is a powerful and effective method to produce immediate short term positive results, it is not a cure for a bad product or bad advertising. In fact, a promotion is speed up the killing of a bad product. A consumer may be motivated to try to new products because of the incentive but after this the product itself must take over. Pepsi Aha launched a sales promotion campaign for its launch, though the promotion was effective, ineffective advertising and publicity led to the downfall of the brand. Increased price sensitivity Frequently promoted brands in the product category, especially on the basis of price, make consumers and traders more price sensitive not only for the promoted brands but for other brands as well in the same product category. Consumers wait for the promotion deals to be announced and then purchase the product. This is true even for brands where brand loyalty exists. Customers wait and time their purchases to coincide with promotional offers on their preferred brands. The case of Akai TV presents an interesting example. This television started introducing quite attractive deals, one after the other and gained a substantial share of the CTV market. Continuous promotions have affected the price perceptions of consumers across the product category, and today the situation is such that customers in general look or wait for promotional deals on their preferred brands of CTV. They are not much moved by the advertising that might extol about the highly advanced features and quality of most brands. They usually consider buying CTVs on promotion majorly based on price cuts. Quality image may become tarnished If the promotions in a product category have been rare, or the product happens to be of high involvement category, the promotions could have a negative effect about its quality image. Consumers may start suspecting that perhaps the product has not been selling well, the quality of the product is true compared to the price or the product is likely to be discontinued because it has become outdated. Akai a well-known brand of colour television that remained perpetually on sales

promotion. So after a point of time a good number of consumers started suspecting its quality and almost no one is prepared to call it a high quality brand. Because of competitive pressures, now almost all brands of colour television period market are available on one or the other promotional deal and consumer perceptions are that almost all the brands have same quality and performance in a price range. Even a top-of-the-line brand like Sony having technological edge, has occasionally announced promotional deals because of competitive pressures as promotions have become common in the category. In the talcum powder category Dermicool started the sales promotion of buy one get two free which diluted its image in the minds of the consumers. Dealers forward by and divert stocks In case of deals for the trade, many dealers forward by, in excess of their inventory requirements. This is particularly happens if a product is low bulk, much in demand and the inventory holding costs are favourably low. This is true both for wholesalers as well as retailers. Forward buying of excessive stocks on deals or quantity discounts can lead to diversion of some of the stocks in non-deal areas. Forward buying of excessive stocks on deals or quantity discounts can lead to diversion of some of the stocks in non- deal areas. Wholesalers and retailers do not hesitate in selling these excess stocks in non- deal areas on prices that are less than the list price, but keeping some reasonable margin for themselves. This is likely to have a negative effect on price discrimination efforts of the company as dealers and those areas would not be buying even the normal requirements from the company. Merchandising support from dealers is doubtful One of the trade promotions tool is to offer promotional allowances to trade people to motivate them to provide merchandising support and to pass on some benefit to consumers. This generally is the condition attached with such promotional allowances. In many cases, the dealers do not cooperate in providing the merchandising support nor do they pass on any benefit to consumers. The retailer might not be willing to give support because he does not have the place, or the product does not sell much in his shop, or may be he thinks the effort required is more than the commission/benefit derived. Short-term orientation Sales promotions are generally for a short duration. This gives a boost to sales for a short period. This short-term orientation may sometimes

have negative effects on long-term future of the organization. Promotions mostly build short-term sales volume that is not maintained. Heavy use of sales promotion, in certain product categories, may be responsible for causing brand quality image dilution. A dealer in second-hand cars had to close shop because he was able to attract customers only during heavy promotions. The investment made on attracting customers was not showing any continual returns. Promotions do affect the behaviour of consumers, but not necessarily in a positive manner. David Ogilvy's remark about promotions is interesting, In 1981, United States manufacturers spent 60% more on promotion than on advertising and distributed 1,024,000,000,000 coupons. Bloody fools. The argument given in favour is that companies should develop superior products or services which are better than competitors and consumer should be convinced through appropriate and focused advertising about the superiority of the product and its image. This will result in lasting brand identities reflecting consumer values. Then there will be no need to offer any extra benefits; only the lasting brand image will keep customers loyal to the brand. PULL AND PUSH STRATEGIES Sales promotion decisions are significantly affected by whether the company decides to do to pull or push strategies to accomplish its objectives. Such a decision may require a little or a lot of cooperation from resellers. The requirements to implement one strategy might be little more than to just stock the product by the retailers. The other strategy may demand more participation from resellers such as the ability to explain to the consumers as to how a product works. In case of using a pull strategy, marketing efforts are directed at the ultimate consumer and consumer promotions such as consumer contests and sweepstakes, rebates, coupons, free samples, consumer premiums, etc are used. If this strategy is also chosen to include advertising, there are large advertising expenditures. The objective of such promotional efforts would be to create sufficient consumer demand to pull the product through the channels, that is the consumers are encouraged to demand the product from retailers who in torn place orders with wholesaler or manufacturer to meet the consumer demand. PULL Manufacturer Flow of promotion: sales promotion and advertising

Wholesaler Retailer Flow of demand Consumer

Bajaj Auto Ltd. offered a scheme of taking home a scooter at Rs 999 was a sales promotional offer communicated through effective advertising and was essentially a pull strategy.

Taj Mahal On filling the coupon present in the ad and mailing it with a flip top of Taj Mahal tea 100, 250 or 500g pack, the customer could win amazing prizes. Prizes included 1st prize: diamond set worth Rs. 1,00,000, 2nd prize: diamond set worth Rs. 50,000, 3rd prize: Taj Mahal watches. Offer was available in Punjab, Delhi, Chandigarh, Mumbai and Pune from 24th august to 25th September. This strategy may require little promotional efforts from the resellers except to stock input the product on shelves. A pull strategy is appropriate when

The product demand as high. It is possible to differentiate the product on the basis of real or emotional features, Brand consumers show high degree of involvement in the product purchase, There is reasonably highly brand loyalty and consumers make brand choice decision before they go to the store. If a firm decides to use push strategy, its efforts are directed at resellers and the manufacturer becomes very dependent on their personal selling abilities and efforts. The promotional efforts are focused at pushing the product through the distribution channels; the resellers may be required to display, demonstrate and offer discounts, to sell the product. The communication to resellers is generally through trade circulars or the sales force. PUSH Manufacturer

Wholesaler Flow of demand Retailer

Flow of promotion: trade deals advertising, personal selling.

Consumer

Push strategies generally appropriate for product categories where there is low brand loyalty and many acceptable substitutes are available in the market. It may also be suitable for relatively new products or when the brand choice is often made in response to displays in the stores, the product purchase is unplanned or on impulse and the consumer is familiar and has reasonably adequate knowledge about the product. Manufacturers, who cannot afford to engage in sustained mass advertising, often use push strategy and offer effective incentives to dealers. Retailer promotion: Buy Cadburys products worth Rs.3000/- and get any 30 chocolates worth Rs.5 each free. Through this offer the company is pushing its product to the retailers and now that the retailer has enough incentive the retailer stocks more and thus it becomes essential for the retailer to push the product to the consumers.

PULL AND PUSH Manufacturer

Wholesaler Flow of demand Retailer

Flow of promotion mix

Consumer

Pull promotions (Manufacturer to consumer) Sampling Coupons Price packs Rebates Continuity programs Contests Sweepstakes Tie-in promotion Financing incentives Special events Premiums Bonus packs Exchange offers

Push promotions (Offered to trade) Discounts Display allowance Advertising allowance Free goods Contests Trade coupons Quantity discounts

Push promotions (Offered by retailer) Price cut Free goods Premiums Displays Feature advertising Quantity discount Clearance sale

"Product life cycle and pull or push strategies" It is quite important for brand managers to analyze and identify the stage of a particular brand in its life cycle before deciding about using sales promotion. During the stage of product introductions, a product requires different sales promotional tactics. Likewise, during the product growth stage, its maturity and the decline stages, the sales promotion tactics required are likely to be quite different. Promotional strategies are also likely to be affected for different non-durable and durable products. Also important in the development of promotional strategy would be the target audience is towards whom the sales promotional messages would be directed. Introduction stage When the product is being introduced, the major objective is to increase the trial rate and distribution of the product. For increasing trial

sampling, coupons, demonstration which are all pull promotions, can be used. To make the product available in distribution channels, it may become necessary to use some kind of incentive scheme for the resellers to encourage them and minimise their risk associating stalking a new product. Manufacturers can offer display allowances to resellers to make the product highly visible. There could be liberal guarantees to take back the stocks, if unsold, to reassure the trader. These are all push promotions. For most new products, it would be difficult to be successful without pull promotions. In fact when new products are introduced, much more emphasis is given to pull rather than push promotions. Fair and lovely is introducing the Fair &Lovely dark circle remover crme by having an introductory offer Rs10 off which will be available through the coupons that are distributed with newspapers like the Times of India. Maggie Chinese noodles was launched in February 2002 Objective- to launch Maggi Chinese noodles, create awareness amongst the target audience and induce trials City-Delhi Strategy- an LCV attractively covered with Maggi Chinese noodles branding was used for the road show. Dragon cut outs and a sales person dressed as a Chinese chef were used to highlight the Chinese aspect. Activities around it included quizzes and fun games like make the longest noodle out of plasticine. Sample packs of Maggi Chinese Noodle, Maggi/Nestle T-shirts and caps were given out as prizes. This activity was conducted over a period of 30 days in major shopping malls, schools, colleges and hotspots in the city. The response of this was overwhelming.

Growth stage In this stage, the dominant objectives are to expand the market for increasing the number of new customers who would try the product for the first time and to encourage the repeat purchase by those who have already tried the product. Another important objective is to expand or at least maintain the distribution. For increasing trial, pull promotions are appropriate however as the trial rate increases free samples become quite an expensive proposition. To encourage repeat purchase by consumers, in pack or on-pack coupons can be used. Samsung had launched the Phod Ke Dekho offer last Diwali between October 15 and November 20, 2001, to optimise sales of its consumer electronics and home appliance products during the festival season, which resulted in tremendous sales. Samsung's sales during Diwali grew by over 28 % over last year's corresponding period and closed the period with sales of Rs 275 crore. While Samsung's CTV sales grew by 46%, refrigerator sales grew by 25% and microwave ovens by 52%.

Due to the success of this promotional scheme the Samsung "Phir Se Phod ke Dekho" Consumer Offer, valid between October 1~November 15, 2002 had been reintroduced by the company to optimize sales. Promotion: The Phir Se Phod ke Dekho Consumer Promotion has all the excitement packaged in a coconut which the customer handpicks on purchase of a Samsung product One Sureshot Silver Pure Coin and Exciting gifts for Lucky winners. In addition to the Silver coin, each coconut has a Cricket bat shaped key chain which has the gift engraved on the Bat, if the customer has won a Gift. Gifts worth Rs. 15 Crores are being given to customers as part of the Promotion Tickets to South Africa for World Cup 2003; Samsung products like VCD Players, CD Yepp players, Vacuum cleaners, Mobile Phones, DVD Players, Key phones; Anil Kumble memorabilia and VCD set, Braun Hand Blender and Adidas Team T Shirt. In addition to participating at the Samsung Phir Se Phod ke Dekho Consumer Offer, the customers of select Samsung hi-end Consumer Electronics products are also entitled to a Gift Voucher worth Rs.2500 from Tanishq, which can be redeemed at any Tanishq outlet. The Company is spending Rs. 20 Crores on this Promotion. This would also help in converting those customers who have already tried the product into regular users of the product. Another tool of sales promotion that can be used is to offer bonus packs containing additional quantity at the same price as an incentive to encourage repeat purchase. To expand the distribution, push promotions such as different types of discounts, free goods that increase the profitability of the trade, can be used. Maturity stage When the product is in maturity stage, many similar brands are available to customers. Due to price discounts or other extra benefits, consumers often switched brands. This phenomenon of brand switching is more common if the product category happens to be one of low involvement. The sales promotional strategy in this stage can focus on attracting maximum number of brand switchers, reward and reinforce the loyalty of regular users and use more of push promotions to build inventories with resellers. Many tools of sales promotion such as premiums, price discounts, extra goods, displays, dealer contests, feature advertising become important. CMC Computer Education On enrolling for DST & eDAST. A set of 3 CDs of Brittanica Encyclopedia worth Rs.1995 free. Indian Airlines frequent flyers programme where you get discounts on frequent visits, get hotel stays free, credit facility etc.

Generally a combination of pull and push promotions prove more effective during maturity stage of a product life cycle. The market share of the brand is an important factor in gaining the support of resellers. Decline stage Survival of the brand often becomes more important during decline stage. Another important objective is to maintain distribution. Sales promotions that help in generating sales volume become quite important. Resellers, in general, are not a tall enthusiastic about declining brands and for this reason we do not show any kind of interest in promoting them. Because of this negative factor, manufacturers use pull promotions. In many cases this becomes a game of endurance for marketers. Bombay Dyeing The Bombay Dyeing Lao Diamond Pao Offer On buying Bombay Dyeing products worth Rs. 300 and scratching the card available, you would be eligible for a prize. There were 6990 diamonds to be won.

INITIATORS AND AUDIENCES FOR PROMOTION

Manufacturer

(Trade promotion)

(Sales force promotion)

Sales force

(Consumer promotion) Distributor

(retail promotion)

Consumer = Initiator of promotion

= Audience for promotion There are different groups who might be a target of sales promotion; consumers, trade and the sales force. Sales promotions originating from manufacturers may be directed at consumers, resellers or both. Simultaneously, the manufacturer may also have a promotion programme for its own sales force. Sales promotions may also originate from retailers and are aimed at customers, though their objectives are different form those of the manufacturers. Their purpose generally is to increase store traffic rather than sell a particular brand as may be the case with manufacturer-initiated promotion.

TECHNIQUES OF SALES PROMOTIONS

Consumer market sales promotions

Trade sales promotions

Sales force sales promotions

Price discounts Price pack deals Rebates/refunds Continuity programs Coupons Samples Contests and sweepstakes Premiums and advertising specialties Free trials Brand placement Event sponsorship Product warranties Exchange offers Internet promotions Low interest financing Free service camps

Off-Invoice Allowance Buying allowance Display and advertising allowance Buy back allowance Bill back allowance Count and recount allowance Slotting allowance Merchandise allowance POP displays Cash rebate Free goods Trade coupons Dealer listing Dealer loaders Sales contests SPIFFS (push money) Incentives Sales training programs Trade shows

Sales contests Incentives Awards and prizes Premiums (gifts) Sales meetings Training Sales manuals etc.

CONSUMER SALES PROMOTIONS Sales promotions directed at the end-user, whether by the manufacturer or the retailer, are called consumer sales promotions. Manufacturer announced promotions to consumers are based on pull strategy of the manufacturer and retailer announced promotions to consumers constitute push strategy of the retailer. Objectives of consumer market sales promotions The following basic objectives can be pursued with sales promotions in the consumer market.

 Stimulate trial purchase When a firm wants to attract new users sales promotions tools can reduce the consumers risk of trying something new. A reduced price or offer of a rebate may stimulate trail purchase. When Dove was launched in the market, people had a certain reservation against the product. Why? There were two reasons: a. Price factor. Most housewives found Dove to be pretty steep and thus consumption was restrained. b. Secondly, the rumours of one of its ingredients being animal fat. HLL began a sales promotion campaign: Get Dove soap free with a kilo of Surf Excel. With this promotion tactic, HLL got the opportunity of converting non-users of Dove to users. At the same time changing attitudes of other detergent users by converting them to Surf users. Whisper, right from the time it launched its first product has been doing a lot of sales promotions to stimulate trial purchase. The main tool used by it is sampling. They have done door-to-door sampling, sampling through schools, newspapers, etc. even now after so many years of its launch it does sampling because of the new target base that gets added every year. Pantene when it was launched did a lot of sampling, to stimulate trail purchase. Their efforts have surely shown results, with Pantene being one of the top selling brands in India today.

Stimulate repeat purchases In-package coupons good for the next purchase, or the accumulation of points with repeat purchases, can keep consumers loyal to a particular brand. The most prominent frequency programs are found in the airline industry where competitors try to retain their most lucrative costumers by enrolling them for various perks such as frequent flyers can earn free travel, hotel stays, gifts etc. McDonalds India have targeted a lot at the kids. To keep them coming in again and again they introduced the happy meal concept where they used to give away different toys every week. And they advertised about it saying collect your entire set of toys. This concept really worked and has shown a tremendous increase in the sales and is presently an integral part of their marketing strategy.

Jet Privilege Jet privilege is a rewarding and customer friendly frequent flyer programme in the country as a jet privilege member one can earn JP miles not only on jet airways but also from many other programme partners of the programme. Stimulate larger purchases Price reductions or two-for-one sales can motivate consumers to stock up on a brand, thus allowing firms to reduce inventory or increase cash flow. Many soaps brands are doing sales promotions to stimulate larger purchases. When people generally come to buy soaps, and see the offers like, Fairglow, buy 3 get 1 free, Lux buy 3 get 1 free, Rexona buy 3 get 1 free, Godrej Nikhar buy 3 get 1 free, Dove get 3 at a reduced price, buy 2 get Lakme fairness cream free, they generally end up buying more then what they intended to. They often stock up products at the time of sales promotions. Introduce a new brand Because sales promotions can attract attention and motivate trial purchase, it is commonly used for new brand introductions. Fairglow has effectively used sales promotions to introduce its brand, by doing a lot of sales promotions like the buy 3 get 1 free, also Fairglow free with Good Knight, with other HLL products.

Combat or disrupt competitors strategies Because sales promotions often motivate consumers to buy in large quantities or try new brands, they can be used to disrupt competitors marketing strategies. If a firm knows that one of its competitors is launching a new brand or initiating a new advertising campaign, a welltimed sales promotions offering deep discounts or extra quantity can disrupt the competitor strategy. Add to the original discount an inpackage coupon for future purchases, and a marketer can severely compromise competitors efforts. Pepsi

Promotion: Hero No.1 Objective: The promotion wa sales promotions a part of Pepsis efforts to counter Cokesales promotions aggressive marketing in thses cities City: Kanpur and lucknow Strategy: The event spread over a seven-day activity right after the dance masti promotions. A mobile float with dancers, performers, and still walkers traveled the streets of Kanpur and Lucknow. The entertainment was based around the theme of Hero No.1 When Godrej did sales promotions to increase it washing machine sales Samsung to protect its market also introduced sales promotions. Godrej gave a rebate offer and a free VIP suitcase. So Samsung also introduced the rebate offer and gave a camera free. Contribute to Integrated Marketing Communications In conjunction with advertising, direct marketing, public relations and other programs being carried out by a firm, sales promotions can add yet another type of communication to the mix. Sales promotions suggest an additional value, with price reductions, premiums, or a chance to win a prize. This is an additional and different message within the overall communication effort. Techniques of consumer sales promotions Price discounts or price-off deals. Price deals are probably the most commonly used promotional techniques. A price deal for a customer means a reduction in the price of the promoted product and the consumer saves money on purchase. Such a deal is designed to: Stimulate customers to try a new product, To encourage new users to try an existing product To encourage customers to continue product patronage, Increase purchase quantity, Purchase multiple units and Accelerate usage rate. All Out mosquito coils have a bumper offer, 30 hi-power mats originally priced at Rs.45 are available at Rs.27 only. Objective: To create brand preference. It is very important to have sales promotions in the mosquito coils segment. This is because in mosquito coils there is hardly any product differentiation and so it becomes

necessary to give the consumer a reason to buy. Hence sales promotions play an important role in increasing your product sales. Colgate fresh energy ice blue gel (Colgate India) 50 gm pack, Rs. 5.50 off on normal price, now available at Rs. 12.50 only. Lux soaps (HLL) 125gm pack, Rs.5 off. Objective: To increase sales and to encourage new users. Duracell plus, special offer a pack 2 batteries, Rs.20 off on MRP. Bajaj started the scheme on 20th august 2001, where by if you buy a Bajaj Spirit twowheeler you get Rs.3000/- off, valid only in Ahmedabad.

Aptech On the complete ACCP 2002 course, save upto Rs.33,600/ Woodland On woodland shoes and apparels get upto 50% off. Price discounts are communicated through POP advertising, window displays, sales people, advertising in newspapers, magazines and TV ads. Determining the quantum of discount depends on the consumers price perceptions and may be difficult to decide. Such promotions work very well in gaining the attention of consumers, particularly at the point of purchase among similar brands and may also encourage unplanned or impulse buying. If there are three different models of a product and because of the discount offered the price of the higher end model is appears, not too high to the consumer as compared to the lesser priced model, then the consumer may buy the higher end model. Titan watches Objective: make the high end product seen cheaper. Branded watches are a high value product. Titan watches are expensive compared to many other branded watches available. Hence in case a sales promotion offer like some rupees off is available on the watch, the consumer finds the high priced high quality product cheaper and so buys that instead of the cheaper one. The main advantage of this tool is that it has a very Strong consumer response Such discounts offer immediate value and strong consumer response.

The Flexibility and convenience of implementation is another advantage. Price offers are extremely flexible in the sense that the producer has total control on the number of units being promoted and the market area in which the offer will be given. If different packs of the same brand are available, the marketer can choose the one size that is not selling well. A discount offer may rapidly lose its advantage if competitors announce a similar offer. In fact, competitors are very likely to retaliate leading to the danger of triggering a promotion wall in which no one benefits except the consumer. Such discounts are short term and are unlikely to produce any longterm gains because the incentive is to purchase now by creating sense of urgency. When the discount is withdrawn the sales may fall below the level of pre-promotion period. And in the long run the sales would return to pre-promotion period level. Price pack deals Price pack deals are also called value packs. They can take any of the two forms: one is bonus pack and banded pack. In case of a bonus pack, an additional quantity of the same product is offered free when the standard pack size of the product is purchased at the regular price. Godrej colour gloss triple action shampoo, offers 20% extra free. 100ml +20ml. Sunsilk shampoo (HLL) 400ml bottle gives 33% more free. New Ever youth lemon face wash, by Cadilla Health care Ltd. Offers 20% Extra with 60 ml 12 ml free. Lotus Herbal Ltds Fresh Apricot scrub, 25% extra, communicated as 7.5 ounces at 6 ounce Price.

Dettol shaving cream (Reckitt Benckiser (India) ltd.) get 40% extra free. Bisleri 20% extra free

A variation of this offer is when the marketer develops special packs of the product containing more quantity but the price is proportionately low. This is a method to load the consumer up with the product. This technique is often used to introduce a new large size of the product or to encourage continued usage and also to increase consumption.

The offer is termed as banded pack when 2 or more units of the products are sold at a reduced price compared to the regular price. Pepsodent toothpaste special pack a 150gm toothpaste + a 100gm toothpaste and a G.I.Joe international character, all in 1 pack at a low price of just Rs., which saves Rs.81/Another variation of this technique is buy 1 get 1 free or some similar offer, it could be same for less or more for the same. Fairglow buy 3 get 1 free, Wipro baby soft baby oil 50 ml pack buy 1 get 1 free, Lux buy 3 get 1 free, Dove get 3 at a reduced price Akai offered a 14" colour television on the purchase of a 21" colour TV. The main advantage of this tool is that extra product may encourage increased usage and help sustain the habit. Also among other similar brands, a bonus pack stands out at the point of sale. Refunds And Rebates Refund is the repayment of total money paid for purchase, while the rebate represents repayment of only part of the money paid for the purchase. Refund offers seems to work very well in guaranteeing the trial of a product or service since there is no risk involved for the customer because of the promise of total refund of the purchase amount. Refunds and Rebates play an important role in the consumer durable segment because the product price is reduced to a great extent because of the rebate offer. Whisper Objective: To increase product trials After having launched it new product whisper ultra thin, confident about the product quality and confident about offering the promised product, to increase its trail and usage has started the money back offer. The money back offer is a very effective tool in making the consumer try the product in 2 ways, firstly because the consumer feels that the company will launch such a scheme only if it is possible for it to offer such quality and so is become confident that the product will be satisfactory. And secondly he is more willing to try because if he does not like the product he has the option to get his money back.

 Gillette announced a refund offer where a customer was required to buy a pack of 7 o clock P II for Rs. 55.50, on returning the empty pack, the customer gets Rs. 55.50 off on Gillette Sensor Excel. A computer magazine, Chip, offered a refund of Rs. 350 on sending a oneyear subscription, which the customer can use to purchase special issues of the magazine. Coupon A coupon entitles a buyer to a designated reduction in price for a product or service. Coupons are the oldest and most widely used form of sales promotions. Coupons bear an expiry date and cannot be redeemed after the cut off date. Coupons can be of 3 types:

Direct to the consumer Media distributed Product distributed.

The main Advantages of coupons are:

Encourage brand switching Stimulate trial for a product Take off the attention from price

Wipro Shikakai had a coupon in newspapers, which anyone could redeem at the nearest retail store, where he could buy one and get one free. Fair and lovely dark circle removal cream to create more product trials has coupons in the newspapers and magazines which avail you of Rs.10/- off on a 40 gm pack. Ponds when it launched its face wash, the market scenario was such that many brands where coming up with face washes and everyone positioned it as soap-free, there was not much differentiation and hence ponds intelligently did a sales promotion where it had coupons in newspapers and magazines which gave the customer the offer of Rs.5 off on a 50 gm pack. It also gave trail packs free with its other products. Pears oil clear soap, redeem the coupon at a retail store and buy a 75gm soap get Rs.5 off

Contests And Sweepstakes

Contests and sweepstakes can draw attention to a brand like no other sales promotions technique. A contest has consumers compete for prizes based on skill or ability. Winners in a contest are determined by a panel of judges or based on which contestant comes closest to a predetermined criterion for the contest. Contests tend to be somewhat expensive to administer because each entry must be judged against winning criteria. Contests were very often used earlier where people has to write slogans, poems, stories etc. generally I like the product because and the best ones won prizes. But off lately, contests are becoming less and sweepstakes increasing. People are more willing to play on luck rather than participate by showing their abilities. Nokia India Pvt. ltd. Promotion: Nokia Sms Challenge-august, 2001 Objective: To establish nokia phones as the most SMS-friendly phones in the market City: Delhi Strategy: Tie-ups with 15 premier outlets preceded and asked them to SMS a pre-decided line to a particular number, the time taken by a participant was the determinant of the contest, the person taking the shortest tome would be gifted a Nokia 3310 phone. Asian paints Asian paints had launched a cricket promo. One had to walk into a Colour World outlet and pick out the shade of blue that the Indian cricket team would be wearing to the world cup. Should lady luck smile, that individual would be among the 10 to win a free trip to England. What was there in it for Asian paints? People would be exposed to the number of shades available. Taj Mahal On filling the coupon present in the ad and mailing it with a flip top of Taj Mahal tea 100, 250 or 500g pack, one could win prizes. Prizes included 1st prize: diamond set worth Rs. 1,00,000, 2nd prize: diamond set worth Rs. 50,000, 3rd prize: Taj Mahal watches. The offer was available in Punjab, Delhi, Chandigarh, Mumbai and Pune, from 24th august to 25th September. A sweepstake is a promotion in which winners are determined purely by chance. Consumers need only to enter their names in the sweepstakes as a criterion for winning. Some popular types of sweepstakes also use scratch-off cards. Contests and sweepstakes often create excitement and generate interest for a brand, but the problems of administering these promotions are substantial.

One problem is that the game itself may become the consumers primary focus, while the brand becomes secondary. The technique thus fails to build long-term affinity for the brand. Britannia khao world cup jao campaign has taken the market by a swing. Under the offer you collect points available on Britannia biscuit packets and exchange 100 points for a scratch card, which has various gifts and the 100 world cup tickets. The offer was actually introduced during the last world cup and had shown phenomenal results. Sale increased tremendously; there was an increase in the sales by 25%, claims the company. So it is being done this year too. This year too the contest is showing good results. Lakme Obejctive: To increase sales City: Delhi Strategy: Scratch a card contest in all Lakme counters of different malls, markets, and shops was organized. Consumers who bought Rs.150/- worth or more of products were given a card and ion scratching the colored bar and assortment of gifts can be won. Lipton Tazza. Promotion: Lipton Tazza Jo chaho woh paao contest-February 2002, July 2002 Objective: to create awareness and build consumer loyalty to Lipton tazza tea City: all over India Strategy: With every purchase of Tazza tea, consumers got exciting prizes and also had the opportunity to win diamond pendants. The bumper prize entailed making a wish list from TVs, Refrigerators, jewelry, computers any and everything they wished for would be made available to them. Even TVS Victor and Boost are having scratch cards and giving away world cup tickets.

Maruti Suzuki With every new Maruti 800 or Omni. The offer was on between 25th august to 15th September. A 22-carat, 10gm Tanishq gold coin free and lots of other prizes. Other prizes included 50 Rs 50,000 Tanishq gift vouchers, 10 Rs.1 lakh Tanishq gift vouchers and a grand bumper prize of 1kg gold. Vim gold bar offer with every Vim bar you get a scratch card, which has many prizes including gold bars people are showing interest in this offer too. Bombay Dyeing- Bombay Dyeing had the Bombay Dyeing Lao Diamond Pao Offer. 6990 diamonds to be won on buying Bombay Dyeing products worth Rs. 300 and scratching the card available. Cinthol

Buy Cinthol International Perfumed Deodorant and through the scratch card: 1 Ist prize- Win a trip for 2 to Australia 5 IInd prizes - Panasonic 29" colour television set. 150 IIIrd Prizes - Braun hand blender. Guaranteed minimum prize Rs 5/- OFF. Contests-cum-sweepstakes: Elle 18 Promotion: Elle 18 valentines day promotion, feb 2002 Objective: to use valentiness day platform to communicate with th etarget audience of Elle 18 City: Delhi, Mumbai, Banglore, Chnadigarh, Pune. Strategy: Upon the purchase of Elle 18 products worth a certain amount, a scratch-card was given out. this could entitle the person to a number of gifts and hampers. The highlight of this was the Cinderella Activity which invited those customers who had bought products worth a pre-decided amount to try put a glass slipper. The lucky few, whose feet fit, were awarded dinner dates. Sampling Getting consumers to simply try a brand can have a powerful effect on future decision-making. Sampling is a sales promotion technique designed to provide a consumer with an opportunity to use a brand on a trial basis with little or no risk. Saying that sampling is a popular technique is an understatement. Sampling is particularly useful for new products, but should not be reserved for new products alone. It can be used successfully for established brands with weak market share in specific geographic areas. Techniques used in sampling: In-store sampling Lakme has in-store trail products. Since it in the cosmetics market it is very essential to provide samples, many stores in Mumbai from time to time have Lakme sampling offers. Where they allow you to try the product and then buy it. Door-to-Door sampling Whisper have done door-to-door sampling, sampling through schools, newspapers, etc. even now after so many years of its launch it does sampling because of the new target base that gets added every year.

Pantene also does door to door sampling. Newspaper sampling

Again Whisper and Pantene have done sampling through the newspapers. On-package sampling

Fair glow, a lot of free Fairglow soaps were available with many other products, especially other HLL products. Mobile sampling

Many road shows and mobile vans distribute free products or offers. Free Movie tickets, disco passes, pensare often distributed. Lehar Kurkure Promotion: Smapling excersie Objective: to create awarness and initiate the consumer;sales promotions taste buds. City: 18 cities Strategy: Extensive sampling for kurkure was undertaken in 18 cities in the north wherein a branded float visited various markets and sample packs of the product were distributed to the target audience. Over 2 lakh packs of kurkure were distributed as samples. Trial offers Trial offers have the same goal as sampling to induce consumer trial use of a brand- but they are used for more expensive items. Ex: exercise equipment, appliances, consumer electronics, etc. the expense to the firm of course can be formidable. Segments chosen for this sales promotion technique must have high sales potential. Premiums and advertising specialties Premiums They are items offered free or at a reduced price, with, the purchase of another item. Many firms offer a related product free. There are 2 options available for the use of premiums: 1. A free premium provides consumers with an item at no cost, the item is included in the package of the purchase item. 2. A self-liquidating premium requires a consumer to pay most of the cost of the item received as a premium. In this promotion offer the

consumer is required to send a specified sum of money along with a proof of purchase to claim the premium. Premiums have become very common today. Many companies are offering lots and lots of premiums. The main advantage of Premiums is that they offer not only that one product but also another product, which may influence the customer, a lot to buy the product. Especially if the other product is worth it. Also new products are given free with established brands to stimulate trial of the new brand. When attacked by Cavincare of Fairever fame, HLL adopted a defensive strategy by giving away one more Fair and Lovely free with every purchase of it (BOGOF). This is one of the many ways by which a marketer can piggyback on the brands standing in the market.

Ponds buy Ponds cold cream 100ml and get a ponds body lotion 50ml pack free. Buy Good Knight expert refill pack and get 3 Nyle shampoo sachets free. Pepsodent toothpaste buy 100gm and get 4 Clinic Plus sachets free. With 2 Dove soaps get a Lakme Fair Perfect cream free. Colgate toothpaste 200gm gives 500 ml Pepsi free With every car financed, Tata Finance gave Tata finance credit card free, applicable only in Calcutta. On using HSBC credit card you get around 25%off at select restaurants. Buy Nivea cream (J. L. Morison (India) ltd.) 50ml and get Nivea soap worth Rs.22 free. Buy Nivea body pure talc and get Colgate fresh energy gel toothpaste free. Buy Nestle Cerelac 400gm get Johnsons baby soap free. Buy Nescafe classic 50gm and get Nestle Kitkat free (36gm) Buy Servo engine oil and get Coca-Cola or Mazza free. VLCC With every spot reduction package for tummy/ thighs/ hips, free 5 kgs. weight loss.

Excalibur, on buying any two Excalibur shirts or trousers, a wristwatch worth Rs.350 free.

Advertising specialties Popular advertising specialties are caps, t-shirts, toys, mugs, mouse pads, pens, calendars, etc. Advertising specialties have 3 key elements: A message placed on a useful icon, and given to consumers with no obligation. Pepsodent toothpaste 100gm pack get free dental insurance worth Rs.1000, this is a very effective strategy because it is giving youre the guarantee that nothing can happen to your teeth. The Rs.1000 insurance speaks a lot for its brand and its product thrust. Buy a Fairglow fairness cream and get a mirror free. Buy a Kodak camera and get a Dil Chahta Hai T-shirt free.

CMC Computer Education On enrolling for DST & eDAST, a set of 3 CDs of Brittanica Encyclopedia worth Rs.1995 free. Every pack of Rasna gives free prankies. This influences the kid to a great extent. Because of the prankies the kid wants to buy only Rasna and nothing else. So the mom does not have a choice but to buy a Rasna

Many other kids products are influence a lot by such specialties especially liked by the kids like tattoos, masks, tazo, cricket bats etc. hence products that have such offers sell more than the other brand available. Ruffles lays, get free Tazo, Rasna, get free Prankies 5 Alpenlibe get free tattoos 1 Marbles get free tattoos. Cadburys Gems get Spiderman masks free. Cadburys Dairy milk buy 2, 13gms chocolate get a toy free. Archies mousepads. Pepsi caps Duracell T-shirts Continuity/frequency Programmes

In recent years, one of the most popular sales promotion techniques among consumers has been frequency Programmes. The main objective of such Programmes is encouraging repeat purchases or repeated visits to particular retail shops. Frequency Programmes offer consumers discounts or free product rewards for repeat purchase or patronage of the same brand or company. Shoppers stop Objective: reward the loyal customer. Shoppers stop started the First Citizens Club and enrolled customers as members of the shoppers club by charging a fee of Rs.150. The customers were entitled to a variety of benefits by collecting points. Indian Airlines frequent flyers programme where you get discounts on frequent visits, get hotel stays free, credit facility etc. McDonalds announced a promotion to stimulate repeat visits to its restaurants. A part of the communication said now every time you buy a happy meal for your kids, they get a lego system set with it - every 10 days there will be a different lego system set inside each box.

Brand placement Brand placement often referred to, as product placement is the sales promotions technique of getting a marketers brand featured in movies and television shows. The use of a brand by actors and actresses or the mere association of the brand with a popular film/ television show can create a positive image and have a huge impact on the sales of a brand. Marketers and advertisers used to think that brand placements affected only consumers perceptions of a brand, much like advertising. But recent brand placements have shown that the technique can have a sales impact like a traditional sales promotions. Brand placement has varying results; if the brand name is spoken aloud the impact can be dramatic but less obvious placements, referred to as background placements are considered by some as a waste of money. Coke in Yaadein , Pepsi in Khushi Pass Pass in Yaadein Tourist destinations in many films. Provogue shirts in all Fardeen Khan movies. Event sponsorship

When a firm sponsors or co-sponsors an event such as a rock concert, a cricket match, etc. the brand featured in an event immediately gains credibility with the event audience. The audience attending an event already has a positive attitude and affinity for the contest they choose to attend. When this audience encounters a brand in this very favourable reception environment, the brand benefits from the already favourable audience attitude. Hindustan lever limited: Project: Lakme Makeover promotion January 2002 Objective: to present the amazing qualities of Lakme range of cosmetics City: Delhi Strategy: tie-ups with select outlets preceded the actual event. They served as the venues for makeovers that were conducted live on the spot. During the course of the promotion, a fashion show, featuring the 3 models that represent the range of the promotion, a fashion show featuring the 3 models that present the range, was also organized. This event led to a considerable increase in the actual sales of the products. Coke and Pepsi keep sponsoring cricket matches. Coke [V]Popstars this was one of the event sponsorships that had a lot of effect on the sale of Coke. The V Popstars was a very interactive session being shown live on channel Vand all those who watched it and liked it, automatically also developed a favourable impression of Coke because of their association with the event. Britannias association with the cricket world cup through the Britannia khao world cup jao offer, has had a lot of impact on their sale and their brand image. Ponds association with womens day creates a special liking for ponds among women. Britannia Tiger sales promotions association with the Lagaan Super match also enabled Britannia to develop a positive image for the brand Tiger Biscuits in the mind of the customers and consumers.

Exchange offers If a family bought a refrigerator 10 years ago and the machine is still giving reasonable service then the family is unlikely to buy a newer and more advanced version of the refrigerator unless they get rid of the older one by selling it to someone. No one in our country is prepared to throw it as junk. Same thing is true for a number of products such as televisions, microwave ovens, washing machines, cars, two-wheelers, computers, etc. This segment of present owners is sizeable enough yet to sell new brands to those who already own a similar product is not easy. To attract this segment, manufacturers regularly announce exchange offers.

Consumer durables market is the one where exchange offers are used the most. Almost all the TVs, Refrigerators, Washing Machines, etc. have exchange offers. Samsung On exchanging old TV for a new Samsung Plano, upto Rs. 5000 off. On exchanging old TV for a new Samsung Hitron Digital, upto Rs. 3000 off. On exchanging old refrigerator for a new Samsung refrigerator, upto Rs. 8000 off. Kurl-on On exchanging old mattress for a new Kurl-on mattress, get Discount upto Rs. 1200. Internet promotions They are the most recent form of sales promotions. They are promotions that are done via the Internet. It is becoming increasingly popular because of the large use of Internet. But still it has a lot to develop. The Godrej group of companies has launched "Godrej Bargainz", which the company claims is the first ever online sales promotion by an FMCG company in India. The promotion - where consumers can actually save while shopping from the Godrej Store on www.iBaya.com - will run exclusively on iBaya.com. Under the promotion, five winners will be chosen every week from the consumers who have shopped on the Godrej Store on the Website. The winners will receive a year's free supply of Godrej consumer products. According to the company, the store features the entire range of Godrej consumer products such as soaps, detergents, toiletries, hair colours, shampoo, hair oil, fruit beverages, processed foods, wheat atta, packaged foods, bakery items and household insecticides. Further, all the products have been made available at a special discount on the MRP to the consumer.

TRADE PROMOTIONS Sales promotions can also be directed at members of the trade wholesalers, distributors, and retailers. It is intended to stimulate demand in the short run and help push the product through the distribution channel more immediately. Effective trade promotions can generate enthusiasm for a product and contribute to the loyalty distributors show for the brand. With the massive proliferation of new brands and brand extensions, manufacturers need to stimulate enthusiasm and loyalty among members of the trade and also need a way to get the attention of the buyers suffering from information overload. Objectives for promotions in the trade market Generally speaking, when marketers devise incentives for the trade market, they are executing a push strategy i.e. sales promotions directed at the trade help push a product into the distribution channel until it ultimately reaches the consumer. Obtain initial distribution Because of the proliferation of brands in the consumer market, there is fierce competition for shelf space. Sales promotion incentives can help a firm gain initial distribution and shelf placement. Like consumers, members of the trade need a reason to choose one brand over the other when it comes to allocating shelf space. A well conceived promotion incentive might sway them. Increase order size One of the struggles in the channel of distribution is over the location of inventory. Manufacturers prefer that members of the trade maintain large inventories so that the manufacturer can reduce inventorycarrying cost. Conversely, members of the trade would rather make frequent, small orders and carry little inventory. Sales promotions techniques can encourage wholesalers and retailers to order in large quantities, thus shifting the inventory burden to the channel. Encourage co-operation promotions with consumer market sales

It does a manufacturer no good to initiate a sales promotion in the consumer market if there is little co-operation in the channel. Wholesalers may need to maintain larger inventories and retailers may need to provide special displays or handling during consumer market sales promotions. To achieve synergy, marketers often run trade promotions simultaneously with consumer promotions. Increased store traffic Retailers can increase store traffic through sales promotions or events. A promotion that generates a lot of interest within a target audience can drive consumers to retail outlets. Techniques of trade sales promotions

1. Allowances Off-invoice Here marketers allow wholesalers and retailers to deduct a set amount from the invoice they receive for merchandise. This programme is really just a price reduction offered to the trade on a particular marketers brand for a specified short promotional period. The incentive for the trade with this programme is that the price reduction increases the margin (and profits) a wholesaler or retailer realizes on the off-invoiced brand. This scheme is in general available for many products, where if the bill amount is above a certain amount you get a certain percentage discount. The % varies from around 2% to 10%, from company to company and also from time to time. Buying allowance It is similar to the off-invoice allowance. It is a discount for the purchase of the promoted product during the specified period on the purchase of certain minimum quantity of the product. This trade incentive is often used to gain more distribution or to maintain the existing one. Display and advertising allowance The retailer is required to arrange the product display in a prominent show-window or offer discount to consumers and advertise this offer in the local newspaper or arrange a point-of-purchase display on the shelf corner. The retailer earns the incentive only after meeting the conditions set by the manufacturer. Buy back allowance

Manufacturers sometimes announce a buy-back allowance to encourage re-stocking by retailers. This promotion immediately follows another type of deal offered to resellers and offered some incentive for new purchases. When the manufacturer realizes that after the initial deal the inventory levels at the retail level are quite low or depleted, such an offer helps in building the inventory level with retailers to normal. Bill back allowance The manufacturer offers a discount for every item purchased during the promotion period. At the end after the promotion is over, the dealer counts the discount per unit for all the items bought during the promotion period, adds any additional promotional allowances as stipulated by the manufacturer and submits the statement. He also needs to submit the bill for all such items. Count and recount allowance This allowance consists of an offer of certain amount of money to retailers for each unit of promoted product sold out of their stocks during a specified period of time. The sales person concerned counts the opening stock with each retailer at the start of promotion and a final recount is made at the end of the promotion period. It can be used to ensure that resellers are not out of stock. The deal is easy to implement and the allowance is paid only on product units sold from the retailers shelves. Slotting allowance These are the fees that a retailer charges the manufacturers to make available the space on the shelf for their new products. Retail store owners say that the number of brands in each category is multiplying, there is increasing competition and margins are decreasing, hence they have no option but to ask for a fee to keep the product on their shelf and use the money to improve their shelf design and promotion, etc. Merchandise allowance In the form of free products packed with regular shipments, are payments to the trade for setting up and maintaining displays. The payments are typically far less than manufacturers would have to spend to maintain the displays themselves. Some of the schemes operating in town are: Buy Cadburys products worth Rs.3000/- and get 30 any chocolates worth Rs.5 free. Buy a box of Munch and get 1 Munch free.

Buy 30 Bonbon packs and get 1 free. Buy Colgate toothpaste worth Rs.500/- and get 6% discount. Buy 24 Close Up toothpaste and get 1 free. Buy 3 Good Knight Liquid packs and get 1 free. Buy 3 Mortein coils and get 1 free.

POP displays Point-of-purchase displays i.e. product displays and information sheets are useful in reaching the consumer at the point of purchase and often encourage retailers to support ones brand. POP promotions can help win precious shelf space and exposure in a retail setting. From a retailers perspective, a POP display should be designed to draw attention to a brand, increase turnover, and possibly distribute coupons and sweepstake entry forms. Companies do P-O-P displays as and when they have sales promotion schemes going on. Some companies that do a lot of P-O-P displays on a regular basis are Gillette, Vicks, Duracell, Pepsi, Coke Cash rebate This is a form of delayed value promotion for the retailer. Only after the proof of performance is furnished, the retailer is given a cheque for the amount of discount. Once a retailer has met the laid down conditions, the rebate is given to the retailer. The advantage of this method is that the rebate is given only after the retailer has performed to qualify for the rebate. Free goods A free goods promotion is a deviation from straight price cut. The promotion offer to trade is in the form of extra quantity of purchased product free. For example, the manufacturer offers one case of free goods with the purchase of 12 cases of the product. There may or may not be any limit on the quantity of the purchase during the promotion period. If the retailer purchases 36 cases of the product, then he gets 3 cases of the same product free. Free goods deal often encourages resellers to stock more during the promotion period. For the manufacturer, it is an excellent promotion because it costs less than it otherwise appears. Buy 24 Close Up toothpaste and get 1 free.

Buy Cadburys products worth Rs.3000/- and get 30 any chocolates worth Rs.5 free. Buy a box of Munch and get 1 Munch free. Buy 3 Good Knight Liquid packs and get 1 free. Buy 3 Mortein coils and get 1 free.

Dating Manufacturers of seasonal products often use dating as a technique of sales promotions. Dating is not a direct type of allowance such as free goods or cash. Manufacturer extends the facility to retailers to purchase a certain quantity of product now but the billing is done after a period of time. It is not only the billing, the retailer purchases the product at some reduced price during the promotion period, however, the goods are shipped at a later date. Trade coupons It is a manufacturer initiated sales promotion, however, the coupon distribution is undertaken by retailers, either through local print medium or in some other manner. The important thing about such coupons is that they can be redeemed only at the distributing store. There is an agreement between the retailer and the manufacturer that some agreed allowance will; be paid to the retailer. Generally this is in the form of reimbursement of some amount of money to the retailer for each coupon redeemed. The distributing retailer gets the double benefit due to the increase in store traffic and the incentive of reimbursement from the manufacturer. This is a string incentive to the retailer to arrange displays and promote the coupon offer. Dealer loaders A dealer loader is a premium that the manufacturer gives to the retailers for buying a certain quantity of a product. There are generally 2 types of dealer loaders buying loader and display loader. A buying loader is given to the retailer on purchase of a specified quantity of a particular product. A display loader is the premium given to the retailer for the window display. After the promotion period is over, the item or items, are given to the retailer as a free premium. SPIFFS (also called push money) It is a monetary reward given to the salesforce of the dealers to sell a manufacturers product. For example, a manufacturer of washing machines may offer Rs.500 to each sales person who sells the

manufacturers brand of washing machine. The SPIFF money varies as does the willingness of the dealers to allow the salesforce to accept the offer. Dealers who carry product brands of different manufacturers generally hesitate to allow such offers. Incentives Incentives to the members of the trade include a variety of tactics like awards in the form of travel, gifts, or cash bonuses for reaching targeted sales levels that induce retailers and wholesalers to give a firms brand added attention. The incentive does not have to be large or expensive to be effective. Another form of trade incentive is referred to as push money i.e. SPIFFS. Sales-training Programmes An increasingly popular trade promotion is to provide training for retail store personnel. This method is used specially for consumer durables like personal computers, exercise equipment, etc. the increased complexity of these products has made it important for manufacturers to ensure that the proper factual information and persuasive themes are reaching consumers at the point of purchase. For personnel at large retail stores, manufacturers can hold special classes that feature product information, demonstrations, and training about sales techniques. Another method to give information would be the use of videotapes and brochures. Hewlett Packard Promotion: Mystery shopper program Objective: to revitalize the distribution chain, audit retailers and the competitive situation. City: Delhi, Mumbai, Ahmedabad and many more Strategy: aimed at the dealers, the objective of this promotion was top revitalize the distribution chain, audit retailer and competitive situation. Mystery shoppers visited the retail outlets to ascertain merchandising and retailer-consumer interaction. Trade shows At trade shows, related products from many manufacturers are displayed and demonstrated to members of the trade. Literally, every industry has trade shows. Their representatives are there to explain the products and services and perhaps make an important contact for the sales force. The use of trade shows must be carefully coordinated and can be an important part of the business market promotional programme. Trade shows can be critically important to a small firm that cannot afford advertising and has a sales force too small to reach all its potential customers.

SALES FORCE PROMOTION Sales promotion directed towards the sales people is referred to as sales force promotions. These schemes are intended to motivate sales people to put in more efforts to increase sales, increase distribution, promote new or seasonal products, sell more deals to resellers, book more orders, develop prospects lists and build up morale and enthusiasm. Some of these activities are meant to prepare the sales people to do their jobs well and include sales meetings and manuals, training programmes, sales presentations, film and slide shows etc. Prize distribution to winners is the more tangible aspect of any such programme. Objectives of sales force promotion schemes are: Increase sales volume Introduce a new product Reducing selling costs Offset competitive promotions Improve working habits Develop new prospect lists etc.

Tools used in sales force promotions Sales meetings Sales meetings are generally organized for sales people form one area, region or district more frequently, usually once a month, once in two months, or quarterly. These meetings bring together sales people from different territories of the nation and are considered a popular way of educating sales people. There is a varying mixture of business and pleasure. Educational material of sales meetings generally focuses on product knowledge , selling skills and motivation of the sales force. The programme often includes formal lectures, quiz shows, etc. The purpose is to generate interest and enthusiasm and the winners are awarded prizes and certificates. Max Healthcare Objective: to celebrate the annual day of Max-India and instill a sense of pride amongst the employees for being exclusive Max-team members. City: Delhi Strategy: presentations, reviews and their vision for the future marked the evening. An address by the chairman, Mr.Analjit Singh and the award ceremony were the highlights.

The vent itself was held in park royal, Delhi. Live feed of the evening was transmitted on audio-visual screens. This exclusive live relay added to excitement among the invitees.

Electrolux Promotion: Salespersons Meet- operation juggernaut City: Goa Objective: To encourage the sales personnel to sell more Strategy: salespersons were treated to a futuristic experience with the theme of start wars. Laser shows, glass-shattering effects, etc. were a part of the theme. Sales Manuals Training materials such as manuals, visual aids, flip charts, programmes, learning books are most useful to sales people. Sales manual may be long or short depending upon the type of the products manufactured and sold by the company. The sales manuals usually contain product details, applications, manufacturing processes, prices, sales techniques etc. Some companies also have house journals that reports about the company programmes, new products, research activities, new polices, awards, promotions, etc. In any firm where personal selling is critical for the sale of the product incentives to the sales people become very important. Incentive programmes most often used by the company include paid vacations within or outside the company, cash rewards, prizes, honour awards, merit certificates for excellent performance etc. Training Sales contests Incentives Awards and prizes Premiums (gifts) Consumer-cum-Dealer-cum-Sales force sales promotions: Nokia Promotoion: perfect 10 contest Objective: to attract channel partners, salespersons., an prospective buyers City: 15 cities Strategy: the contest was three fold - for consumers, dealers, and sales personnel. A large number of activities were organized. Dealer road shows, mass media consumer

competition and intensive merchandising were undertaken. Lucky draws were conducted and the participants get to win some great prizes also.

THE CONSUMER DECISION MAKING The consumer decision process begins with the recognition of need; that is, the consumer must recognize the need to purchase a product. Only then does he go through the process to choose the product. A display or any other promotion may remind the consumer that he/she needs the product, or may awaken the latent demand for the brand or product category. Because of the sales promotional communications, need or problem recognition may get triggered in both high involvement as well as low involvement consumers. If the purchase situation happens to be one of high involvement, triggered by an attractive exchange offer, or interest-free installments for consumer durable products such as refrigerators, oven, washing machine, colour television set, etc., it is more likely to result in extensive problem solving effort rather than immediate purchase. The sales effect in case of low involvement situation is likely to be immediate because of unplanned or impulse buying or because of familiarity or top-op-mind recall of the brand. The consumer may think it is not worth devoting time and effort to the purchase situation in question. The low-involvement consumer may have visited the retail store with the intention of purchasing a certain product but an in-store display attracted his/her attention and led to brand switching or impulse buying. According to some researchers, this type of behaviour is an attempt towards reducing the amount of mental exercise by using simple decision rule in making a purchase decision. Some experts believe that price-cut and in-store displays are more effective for low-involvement than high-involvement consumers. In a severely competitive market where brands are considered as having no real differences, consumers learn that many brands will meet the requirements. Naturally, the purchase behaviour is likely to become one of low-involvement and the brand on promotion has more chances of being purchased. One can distinguish four different types of behaviours depending on the degree of perceived difference among brands and the level of consumers involvement in a purchase situation.
High Involvement Significant Differences between Brands Complex Buying Behaviour Low Involvement VarietySeeking Buying Behaviour

Few Differences between Brands

Dissonance reducing Buying Behaviour

Habitual Buying Behaviour

Complex Buying Behaviour is shown by consumers when they perceive significant brand differences and they are highly involved in the purchase situation. Such a situation may result because the product is expensive, ego intensive, risky in some way, or infrequently purchased. The consumer does not possess any meaningful information about the product and is in need of information. He/she makes a wellconsidered purchase. Dissonance-Reducing Buying Behaviour results when the consumers involvement in the purchase situation is high because the product is expensive, risky, self-expressive or infrequently purchased. The differences among brands are perceived as not significant. After the purchase, consumer experiences dissonance. As all the brands would not have all the features, the consumer suspects the correctness of her/his decision. This causes uneasiness and the consumer looks for reassuring information and avoids disconcerting information. Habitual Buying Behaviour results when the consumers involvement is low and there are no significant differences among brands. This is generally the case with most low priced and frequently purchased products. In this category, sales promotions can lead to considerable brand switching. Consumers buy these products as routine purchases and do not consider them to be important. They reach for certain brands because of familiarity and not because of any brand loyalty. Variety-Seeking Buying Behaviour results in product categories where there are significant differences among brands but the consumer has low involvement in these products. There is much brand switching due to variety seeking or boredom. Sales promotions can encourage increased brand switching because of premium offer or due to some contest. When the information requirements are high and there is an absence of any established criteria for evaluating the product category or specific brands in the category, the decision-making would be one of extensive problem solving (EPS). Typically, the purchase situation would be one of high-involvement. If the consumers have already established some criteria to evaluate the product category or the brand, they are likely to engage in limited problem solving (LPS) and would collect some additional information to reach a decision. They may not have any preference for a particular

brand and hence would like to know a little about the differences among brands. This would be more like fine tuning their decision. When consumers have some experience with the product category and have established criteria to evaluate different brands, they may buy the product as a matter of routine. This is routinised response behaviour (RRB). In some cases the consumers may search for a small amount of additional information but, in general, they only review what they already know. Sales promotions can lead to significant increases in the sales figures of the products if the consumers buying behaviour is routine type (habitually buying behaviour). HOW ARE SALES AFFECTED BY SALES PROMOTION?

A question asked by numerous today.But at the end of the day do promotions increase sales?
Earlier this month, Smithkline Beecham Consumer Healthcare launched a promotion for Horlicks and is offering a game with the drink. Result? Within 15 days Horlicks sales have gone up. Nestles Milo, too, has been doing fairly well purely on the basis of the cricket bat it offers with the product, says a retailer at a supermarket in Mumbai. How does sales promotions influence sales ? There are 4 basic mechanisms involved: 1) 2) 3) 4) 1) Brand switching Repeat buying Purchasing more or accelerating timing Increasing category expansion and consumption Brand switching The objective of some sales promotions is to induce brand switching, i.e. encouraging the consumers to purchase the promoted brand instead of the regular brand that would have been purchased had there been no sales promotion. This type of brand switching is often called aggressive switching. The second type of promotion effect on brand switching is considered as defensive switching. In this case, the objective is to retain the customer by encouraging him to buy the same brand as was bought on earlier occasions.

Godrej offered free gifts plus discounts on its washing machines to make consumers shift from newly arrived competition (Samsung). That was an aggressive strategy. To prevent its customers from shifting to Godrej, Samsung had to launch a similar scheme of free gifts and price discounts. This was a defensive strategy. The manufacturers concern is to compete with other similar brands, while the concern of the reseller is to encourage customers to buy from his store. When a retailer promotes, consumers respond by switching stores, i.e. they purchase from the store that is promoting instead of the regular store. Promotions offering price deals influence the attitude of consumers towards buying the brand. Much would depend on the size of the discount and the consumers sensitivity towards price and how much importance consumers place on price as compared to quality. If the attitude toward the brand has been quite low compared to some other brands, then a price promotion is likely to encourage a switch to the promoted brand. Such price promotions may also encourage consumers to buy an otherwise expensive brand which they could not afford on the normal list price. Displays at the points of purchase may induce brand switching because they serve as conditioned stimuli associated with price promotions. Over a period of time, consumers get trained to associate displays with price reductions and respond even when the price reduction is not there. If most of the consumers are inclined towards low prices because of economic conditions, the majority of them are assumed to be buying low priced brands. However, if the price of an expensive item is reduced because of a promotion, some consumers from low quality category will switch to the promoted brand. But when the low quality product is promoted, there is no switching because the consumers have been buying the brand without promotion. The consumers from high-income group are unlikely to switch to low-price brand because of promotion and the sales gains would not be there. 2) Repeat buying When a consumer buys a product on promotion, this may lead to developing a habit towards purchasing that brand and some evaluation about the performance of that brand. It may also happen that since the brand is purchased on promotion, the consumers attitude towards the brand weakens, and the probability of purchase in future declines. Repeat purchase may result because of habit formation that may develop because the brand is bought more than

once due to sales promotion. Much depends on the satisfaction of the consumer with the brand purchased on promotion. For example, if a customer purchased a Godrej refrigerator on promotion and was satisfied, it is very likely that next time when the need arises, the customer would purchase the same brand again on promotion, or other products of the same manufacturer when available on promotion. Repeat purchasing is often the result of habit formation and learning. Sales promotions stimulate the customers to by a product and this becomes the first step towards establishing a habit. Another route is not to allow the brand user to shift to some other brand by rewarding and reinforcing the already established behaviour. In case of low-involvement products, the role of habit is more important. The consumer does not want to devote much time to thinking and pre-purchase evolution in making a purchase decision. Habit helps the customer avoid any cognitive effort and helps as a simple and convenient way to decide which brand to purchase. Once a consumer gets used to the long-lasting effect of Duracell batteries, it becomes a habit and he would not think much before going in for the same brand again. In case of high-involvement products, it is assumed that learning takes place when the consumer experiences the actual performance of the product and makes an evaluation. A favourable evaluation is likely to help sustain the habit. In some cases, even consumers with low involvement often make evaluations that may have repercussions with regard to developing the habit. This holds true to a great extent in case of industrial products, where the actual experience after initial usage is very important. 3) Purchasing more or accelerating timing Purchasing more and accelerating timing refers to those situations when consumers buy more than their immediate requirement, or shift their purchase timing as a result of promotions. When resellers buy more than their normal requirements, it is called forward buying. Building excessive inventories in this manner often leads to stock diversion in non-deal areas. Another important repercussion of this purchase behaviour is that it merely shifts the purchases which would have occurred anyway. For example, if a consumer buys more than the immediate requirements, then in the next purchase period, this consumer either would not buy, or buy less. In another situation, due to promotion, the consumer buys the refrigerator now, though the intention was to buy after 2 months. This is purchase acceleration.

Another effect of promotion can be that consumers who have bought in excess of their requirements would be out of the market. Similar would be the retailers shelves are full. This can help in pre-empting the competition. Such acceleration in purchase quantity would also help in preventing brand switching, and in some cases, more consumption of the product. The reverse may also be true in certain situations, i.e., negative acceleration when the consumers buy less or decide to purchase later rather than now. This may happen when the sales promotion stimulates brand switching. The consumer wants to try the product and buys a smaller quantity to reduce the risk associated with using something new. The consumer may also postpone the purchase of a product because he/she learns from some source about the forthcoming sales promotion or anticipates it. 4) Increasing category expansion and consumption Sales promotions are likely to stimulate demand by creating new occasions for purchase or by increasing the consumption rate of consumers. In certain situation, the purchase of a product category gets accelerated. Sales promotions such as displays can create new purchase occasions by the reminding the customer that the displayed product is good for growing children (protein biscuits). Other products, for example noodles or potato chips purchased on promotion in multiple units, can increase the consumption rate, which is often the objective of many promotions. One example can be of condensed milk, (Milkmaid). An attractive display of this brand is arranged and a free recipe book is given on purchase of 2 packs. This is quite likely to increase the rate of consumption of this product and consumers will be tempted to try different recipes. In case of many high-involvement products, promotions can help consumers to realise that a certain product would serve as a good gift item (a silk sari, camera, a Cadbury pack, Ray-Ban sunglasses, etc). In some cases, there is a certain price limit beyond which the consumers will not buy a product. However, a price promotion offer lowers the price of the product below the customers price limit, and thus a purchase occasion is created. Many customers buy cars when available on promotion such as interest-free installments, which otherwise they are not in a position to buy on down payment. Of late, this is happening in case of almost all brands of computers. Observations in the market place point to the likelihood that brand switching, repeat purchasing, purchase acceleration and consumption, all occur simultaneously. The net result, however, is that sales promotions work.

SALES PROMOTION BUDGET The allocation of monetary resources to sales promotion is determined by the promotional strategy of the firm. In most cases, first the total amount of money for promotion is determined then it is budgeted for different activities. Before deciding the money allocated to sales promotion, the management should evaluate relevant factors such as type of product, its stage in PLC, the market situation, level of competitive activity, etc. All these factors, alone or in combination, can significantly affect the promotional budget. There are five important techniques that are commonly used to allocate funds to sales promotion. Percentage of sales method The percentage of sales method to allocate the funds is probably most popular among companies. In this approach, the budget is determined by taking a fixed percentage of sales. The sales figure taken could pertain to the previous year, or the average of several past years. This percentage could also be based on the forecasted sales of the year under consideration. Unit of sales method This method is commonly used by companies dealing in high-priced products, generally consumer durable goods such as four and two wheeler auto-manufacturers, refrigerators, washing machines, microwave ovens, entertainment electronics and many other items. Instead of rupee value of sales, as in the previous method, the base is the physical volume of either the past or anticipated sales. This figure of units is then multiplied by a fixed amount of money to reach the budget amount. For example, the manufacturer might allocate Rs. 2000/- per unit for sales promotion. Competitive parity method Many marketers match or base their sales promotion budget to that of the major competitors. The logic attributed to this method is that the collective minds of the companies in the industry probably generate promotion budget that are close to optimal and any departure from the industry norms may lead to promotion war. All you can afford method In using this approach to budget allocation, the amount that is leftover after all other relevant allocations have been made, is earmarked for

sales promotion. This approach is used, generally, by companies with small budget, or by some other companies, large as well as small, when they are introducing a new product. It is merely an availability oriented budget and quite unsophisticated. Apparently, there is no realisation that in a competitive market situation, sales promotion mainframe sales in many ways. Objective end task method As mentioned earlier, the promotion budget is determined by the overall promotional strategy. Objective end task method approach is the one which is driven by strategy. This is also the most popular technique to decide the sales promotion budget. The promotion manager starts by making a thorough study of the market, the product, competition and consumer behaviour in order to set up appropriate promotion objectives. These objectives may relate to increasing short-term sales, introducing a new product, stimulate trial, increasing distribution, etc., within a specified period of time. Next step is to determine how much money would be necessary to accomplish each task involved in achieving the objectives. If the costs happen to be more than the money available, then either the promotion objectives adjusted or more funds are made available from the contingency reserve or by reducing the budgets of the other promotional activities. SALES PROMOTION EVALUATION Measurement of results in any area of business activities related to the objectives that are set. To accomplish this, set of evaluation criteria is laid down before the implementation of the sales promotion programme. A number of these objectives are directly related to sales. In all such cases, the measurement does not pose any complexity and the sales based techniques can be used with relative ease. For instance, it is quite easy to measure the sales effect before, during and after the sales promotion. In case of objectives not related to sales, such as trial purchase, or changing consumer awareness and attitude as resultant increase and perceived value of the product, measurement is more difficult. In certain types of promotion, the reseller support is important and can have significant effect on marketer's promotion performance. Pretesting How sales promotion is to be communicated and what would be communicated to the target groups is important and can be pre-tested. For example the pre-tested may find out what is likely to be the perceived value and the risk. A customer considers whether it would be

wise to buy an unknown brand of sport shoes at a 45% discount. In this offer was there a risk of buying an unfamiliar brand? The pre-test can be conducted to assess these factors by using focus groups and consumer panels. Another approach, ballot method, consists of kneeling a ballot paper to a list of consumers. They are requested to evaluate different illustrated promotion is and vote for the most light and return the ballot to the firm. A relatively expensive but more accurate method is a portfolio test. A portfolio of sales promotion is prepared and shown to consumers in person and the responses are noted. To test consumers behaviour responds such as trial purchase, repeat purchase, etc., pretesting consists of experimenting in certain markets for individual stores in a market. All other factors remain the same; only the sales promotion device being tested is the variable that is manipulated. It is often quite helpful to evaluate the responses of resellers before implementing the promotion programme. The simplest ways to visit several important retailers and wholesalers, discuss the programme and seek their opinion and suggestions. This may prove to be quite favourable in case the support of resellers is considered to be of paramount importance for promotion results. Concurrent testing This testing is done when the sales promotion is in progress. Concurrent testing the permit the promotion manager to modify the sales promotion, if needed This type of testing is conducted in terms of sales data which can be obtained on a weekly or monthly basis. If the promotion is a consumer contest and the consumer is not require to purchase anything, the response to promotion can be adjudged by the number of entries received at some interval and if need be, the contest period can be extended. In case of a coupon distribution programme, similar approach can be adopted by keeping track of coupons redeemed. Post testing Post-testing is done after the promotion period is over. To assess the changing consumer awareness and attitude, telephone calls, questionnaire mailed to the consumers and personal interviews can be used. In these methods, the most expensive is the personal interview method and the least expensive is the mail. The information sought pertains to the promotion event. In case of samples on premiums distributed through retail stores, intercept interviews at the Point of Sale can reveal more reliable information.

To measure the sales affect, sales figures before the promotion period can be compared with figures at the end of promotion and one month after the promotion ends. Suppose that the promotion objective was to increase sales by 30 percent in certain period and the pre-promotion sales for a similar period were worth 5 million rupees. The sales jumped to in excess of 5.6 million in the promotion period. This would show that the objective was achieved. It is very likely that in the ensuing month after the promotion, the sales will come down to say 3.5 million rupees. In the sales return to 5 million rupees on the long run, then perhaps the sales jump is because of brand features and deal prone customers. However, if the regular sales settle at 5.5 million rupees on the long run, then definitely the promotion prove successful in increasing the long run sales by attracting new customers and we have also attracted customers away from other competing brands.

PROMOTIONS CASES

PRODUCT CATEGORY: FMCG (beverages) PEPSI The company believes that sales promotions are an integral part of their overall marketing strategy. Sales promotions are carried on at 2 levels Customers i.e. trade Consumers Why trade promotions? Trade promotions are essential for 2 major reasons: Drive volumes the main objective of any sales promotion is to increase sales. Visibility the category demands not only volume, but also increased visibility in order to build the brand. Trade promotions are comparatively easier to implement because the audience is smaller, direct contact is maintained as company salesmen are in continuous interaction with the dealers. SUCCESSFUL TRADE PROMOTIONS: Aha Bar Mein Jar Product: Pepsi Aha

Objective: Launch of Pepsi Aha and to induce trials. The Rationale: The company realised that it is essential to gain entry into the market first before carrying out consumer promotions. So the company decided to focus on bars to enter through a specific channel.

The company based on a research identified the waiters as the major influencers in purchase of drinks in bars. So in an effort to induce trials of Aha among the consumers at bars, Pepsi launched the Aha bar mein jar offer. The Promotion: There were huge jars, branded and packaged as Pepsi Aha placed at the bars. The waiters were required to fill up the jars with Pepsi Aha crowns. After which, they would receive gifts and prizes from Pepsi. The Result: The campaign resulted in: Increased Volume Sales Improving the equity of Pepsi among waiters. Created consumer preference for the brand. CONSUMER PROMOTIONS: Consumer promotions are identified at Pepsi at 3 levels: National level Local Level Key A/cs Specific The two major objectives for the promotions are: Volume growth Brand building For instance the campaign in Pune wherein Fardeen Khan visited 10 colleges in Pune may not drive volume sales but did enable top of mind recall for Pepsi for a very long duration. Key Accounts: Key accounts could be, for instance, all pizza outlets across the city or any specific pizza outlet like Pizza Hut wherein Pepsi conducts specific sales promotions campaigns. Key accounts specific promotions are carried for certain major reasons: They act as volume drivers. They aid in image building e.g. If Pepsi ties up with Restaurants, then their food Pepsi association becomes stronger. Likewise the Pepsi cricket Association will be reinforced through their forthcoming campaigns for the cricket world cup.

They act as reactionary tools to counteract competitors strategies.

Promotion could be of two kinds: UTC (Under the crown) SLP (gifts, labels, accessories)

Timing of Promotion: Seasonal During Ganpati festival Pespi promotes the Mangola brand through contests to leverage the association between Mangola and Mumbai. Reactionary to competitors strategy: With Maazas strategy to offers tattoos to their consumers, Mangola is also gearing up to offer promotions. Launch of a new brand: Besides this during monsoons, sales are pretty low so the promotions are directed accordingly. Like wise the brand intends to leverage their promotions on the forthcoming movie Khushi that stars their brand ambassadors; Fardeen Khan & Kareena Kapoor. Also the company is gearing to use the forthcoming cricket world cup to the hilt. PEPSI AHA Objective: To induce trials Timing: Summer 2002 Vehicle: Games and contests The Promotion: The company spent 3 weeks identifying four major channels through which their promotions would be directed at the consumers. They include: Eateries Theatres Schools & colleges Pubs

The companies decided to use games to entice the consumers. The deal was that the consumers would play a lot of games and win Pepsi

Aha as prizes. The games had to consider the brand values Pepsi Aha aimed to be identified with. They selected Johny A as their brand personality. The games included jigsaw puzzles that had the image of Johny A and hoopla games. Result: Consumers response to the promotion was very effective. The enthusiasm generated by this promotion among kids and teens ensured a high top-of-mind recall for the brand. However, the top line marketing was not upto the mark and was responsible for the poor sales of the brand. The television ads and hoardings were not effective enough to persuade the consumers to purchase Pepsi Aha. Pepsi Mera Number Aayega Campaign Offer: Prizes including cash prizes to be won Platform: National level Vehicle: Under-the-crown contests Communication: The promotion was communicated through television personality Cyrus Broacha using television and newspaper media along with outdoor advertising to communicate the campaign. PEPSI STORYBOARD:

Children are playing on swings. A young Cyrus is waiting for his turn, but is pushed aside by other kids.

Dejected, he asks the maid, Mera number kab aayega?" . "Aayega baba number," she assures him.

A few years later, at a basketball court all the guys are selected, except our Cyrus.

Disappointed yet again, he tugs at the coach's shirt and asks, "Mera number kab aayega?"

Now in college, the youngsters decide who gets to kiss girls by rotating a bottle of Pepsi. Here too...

...Cyrus misses by a hair's breath. "Mera number kab aayega?" wails our perpetual loser.

VO: "Ab to aa hi jaayega. Drink Pepsi, collect...

I won, I won," exclaims a guy standing next to Cyrus at an openair cafe. Cyrus looks at his luckless crown.

This time our boy Cyrus does not lose hope as he convinces himself, "Mera number aayega." ...numbered crowns and you could win lakhs every week."

Promotions that failed to deliver the results: Mangola Ganpati Promotions 2002: The company had conducted certain contests through advertisements in local Marathi newspapers (ex: Loksatta). However the campaign failed to generate any response. Promotions in Pubs to leverage their tie up with Deep Purple Band: This was a case of selection of wrong channel which Pepsi realised a little too late. Pubs do not permit companies to put up posters in their premises. Added to that the people frequenting the pub wanted a variety of songs to be played and not just deep purple songs. After this experience the company has decided not to venture into pubs for promotions unless the product category favours it, (like Shock and Baccardi Breezer) Evaluation of the campaign: The company measures the success of the campaign based on consumer health i.e. top of mind recall. Although sales volume matters, the company lays stress on building brand equity.

PRODUCT CATEGORY: FAST-TO-COOK SNACKS

MAGGI Introduction: Maggi Noodles was launched in 1982 as a tasty treat for children, with a strong fun element communicated in the brands advertising. The packaging was bright, innovative and attractive. The brand appealed to mothers because it was convenient, taking only 2 minutes to prepare, and because the price was very affordable. Initially it was a runaway success. Two problems emerged subsequently. Cost escalation forced the company, Nestle, to increase the price. Secondly, it became clear that the user base was fast changing and expensive continuous advertising was required to maintain sales. The need was to establish and stabilise a core franchise of loyal regular users among children under 14, especially those aged 8-10 who had been identified as the biggest fans of Maggi Noodles. As a sales promotion campaign they formed the Maggi club. ANALYSIS: Objective: To build a core franchise for the brand by establishing an ongoing dialogue with young children over time, by means more closely targeted and less expensive than continuous mass media advertising. The Promotion: Children under 14 were invited (by press advertisements and leaflets distributed in select schools) to become members of a Maggi Club, by sending logos cut from 5 empty wrappers of Maggi Noodles. Members received a club membership Card and a list of gifts of fun activities for the year ahead, since Maggi Clubbers are Fun Lovers.

Gifts such as: Snap Safari Game Laws Of The Jungle Game

Cap And Mask Set Disney Today Comic Standees Set Travel India Game

To obtain each of these items, the Club Member was required to send the application with 5 proofs of purchase of Maggi Noodles. Details were also mailed to Members of special privileges negotiated for them by the Club from time to time, e.g. discount tickets at Appu Ghar. Results: The enrolment of members was extremely successful. In fact members were so far above target that there were some difficulties in coping with applications. The membership of the Maggi Club has grown by more than 75% per annum subsequently. These members represent an expanding core franchise of regular users of the brand. Clubs are an attractive concept for any marketing executive looking to get closer to regular consumers of his brand. They are especially attractive when children are the consumers: many children like belonging to a gang and love receiving mail addressed to them personally. A club gives the brand the opportunity to talk direct to the child, without the intervention of the mother who is so often as with Maggi Noodles the purchaser of products designed for child consumption. The Maggie scheme had no frills, all of which would cost money. It concentrated single mindedly on encouraging regular usage of Maggie Noodles by offering a wide variety of attractive gifts in return for multiple proofs of purchase. Membership grew to a size where it also represented a valuable directmarketing database for other Maggi/ Nestle products. MAGGI correcting its mistake: The company failed to cash in on the success of Maggi Clubs. Further, discontinuation of the successful Maggi product and replacing it with a new variant hit the companys sales really hard. For the first time in years, Nestle saw its dominant position in the instant noodles market challenged by Indo-Nissin's Top Ramen. In an attempt to rejuvenate the old Maggi, the company planned to relaunch Maggi through a planned sales promotion campaign.

Setting the ball rolling was the Maggi Fun-Dooz promotion and online contest. The promotion and contest were meant to take forward the `ab sab kuchh pehle jaisa' feel associated with the relaunch of Maggi noodles with the original flavours. Objective The Maggi Fun-Dooz promo was poised to drive the brand to new heights, reward loyalists, bring back lapsed customers and bring new consumers into its fold. Promotion Fun-Dooz, as the nomenclature suggests, is a set of 16 `fun to do' and `great to play with' three-dimensional puzzles which, when put together, could build up to a Toyland and `Zoomies': a dream house, a fast car or even a fighter plane! The Fun-Dooz puzzles are available with 400g packs of masala flavour Maggi noodles. Completing the 16-piece puzzle first would fetch the winner a Fun-Dooz watch, while for anyone who manages to put together eight different puzzles, there are board games to be won. In the past, Maggi has given away dinky cars and waist pouches as prizes in exchange of a set number of noodles packs. Supplementing the Fun-Dooz promo, is a Maggi-2-Minute Fun-Dooz contest on the net (www.contests2win.com) lending a touch of modernity to the promotions. A participant could win prizes such as music CDs on answering three questions correctly. The company also has plans to rejuvenate the almost forgotten `Maggi Club' for young children. The club, which had a database of almost 2 million kids, sent out games and puzzles to members in an effort to keep their interest in the brand alive. Results According to company executives, sales have improved dramatically since the old flavour was brought back.

CATEGORY: OTC PHARMA IODEX POWER CREAM Iodex isnt only a dark brown greasy stain-leaving balm, in an equally primitive bottle. Its also a white, washable non-staining cream in a contemporary tube. Then why hasnt the latter image replaced the former? SmithKline Beecham Pharmaceuticals is working hard on that making the contemporary image of the age-old brand stronger. The legendary Iodex in the green bottle contributes to about 90% of the total iodex sales. But the power cream is showing only modest growth. The reason being that Iodex Power Cream was a not-so-early entrant. Moov was already into tubes and quite established in the market. Creams are still in the nascent stage however. Today iodex and Moov are the only key brands available. Himani Cream was launched recently in the same segment. In the past ten years, the category has clocked a growth of 3-5%. The cream, which SKB believed, would help category growth contributed just 3%. So this year they decided to do something different, which can actually trigger growth. A blind test done by the research agency showed that the Iodex Power Cream was the preferred brand. So the company decided that if the brand was good, they should stand by it. They came up with a moneyback guarantee scheme quite unique in the OTC category. Timing July 25th September 30th Where Test marketed in Tamil Nadu and Karnataka. National launch in the first week of August. Offer The money-back offer was exclusively for backache. (Though the product works for any kind of pain) Publicity In-shop promotion in Chennai and Bangalore and national advertising Rationale Commercials do get noticed but are not very effective. A consumer feels good when she can see the product, open it, smell it and apply it Story board:

A woman buying flowers is approached by a salesman selling Iodex Power Cream

But she is not interested and politely refuses him

But the salesman is persistent so she loses her cool and asks him to "move."

"Woh nahin madam, yeh," he says, referring to a competitor brand.

"Kamar dard se poora aaram dilaye," the salesman says. Super: Fouran aaram, nahin to poora paisa wapas.

The lady smiles and is convinced about the claims made by the salesman and agrees to try it out

Results Power cream now contributes about 10% to the overall Iodex portfolio.

What the future holds? The company believes that if the cream segment moves, there will be a positive rub off on the entire Iodex brand.

PRODUCT CATEGORY: ORAL CARE CLOSE UP v/s COLGATE

Close-up: Its initiative ran under the banner Sky Party with Hrithik Roshan. This was a part of a nation-wide contest that commenced on Feruary14, 2001, with a final scheduled on April 26, 2001. The contest culminated in Mumbai with a star-studded dinner and an airplane ride for 30 lucky winners with the famed film star on board. The idea was simple. Consumers had to fill in some personal details on the inside of any close-up pack. The empty pack could be dropped in at collection boxes placed at convenient locations in selected cities. A draw of lots determined the lucky winners who would be flown to Mumbai to participate in the Sky-Party. Colgate: For a long time in the paste wars (all through the early and mid 1990s) it looked as if Colgate Gel could not match the power of the Close-Up proposition. Since Close-Up was gaining increasing popularity because of its Sky Party Colgate also hit right back. It launched its Colgate Ke Andar Kya Hai promotion that had been uniquely designed to reward consumers for every purchase they made under this promotion, according to Colgate-Palmolive. The consumer had to cut-open the wrapper and place a mirror against the inside of the pack to read what has been won. In the case of toothbrushes, the consumer has to scratch the silver pack on the packing with a coin to find a gift. There were 10 first prizes of Rs.10 lakh each, 50 seconds prizes of Rs 1 lakh each and 100 third prizes of PCs and PalmoliveNatural soaps. The prizes range included kids activity books and Palmolive skincare booklets with Rs.3 discount coupons.

ANALYSIS Objectives of the promotions: Close Up objective of the promotion was to strengthen and connect with todays youth. Colgate the promotion was launched with the objective of growing volume and market share and to compete with Close-Up in the freshbreath segment where gel pastes are a huge success and Close-Up was the market leader while delighting consumers with a hidden surprise in every purchase. Medium of communicating the promotions Close-up used a multi-media approach in reaching this contest to its consumers. Print, radio, TV and the Internet were used extensively to create visibility and excitement, as also to encourage participation. Colgates promotion was supported by outdoor advertising, TV and press campaigns and a POP (point of purchase) support plan. Pull Strategy/ Push strategy Both of the companies used pull strategy that motivated the consumers to go to the retail outlets and ask for their respective toothpastes. These promotions required the minimum support from the retailers. Types of promotions Close-up used an event with a celebrity specially leveraging the popularity of Hrithik Roshan after the success of Kaho Na Pyaar Hai as a promotional tool that also included sweepstakes. Colgate used discount coupons, gifts, prizes and contests as the promotional tool. Results The efforts of both the companies paid off in terms of higher consumer involvement. This is a good example of how two companies in the same segment used different promotional strategies to attract the audiences and in respect to their brand images. The promotions also aimed at creating awareness in the rural market, where the penetration of tooth-pastes is just about 42%. The consumption of toothpaste is about one-third of the urban consumption. Companies have to find the link which will make the market grow and this will come through the power of the brand.

INCREASING READERSHIP THE A&M EXPERIENCE A&M, a magazine for advertising and marketing had launched a sales promotion scheme to give the much-required boost to its sales. The sales promotion scheme was advertised in the print media i.e. newspaper (Times of India). OBJECTIVE To increase customer base and readership. ABOUT THE SCHEME The scheme was an attractive subscription offer launched for the purpose of increasing the readership of A&M. the scheme offered heavy discount on the subscription rates of the magazine for the periods of 1, 3, and 5 years. Not only this, the scheme also offered free gifts with subscriptions of 3 and 5 years duration. The free gifts included a Videocon Digital Organiser with a 5-year subscription and Braun pocket shaver with a 3 year subscription. The details are as follows: Subscript No. ion of Term issue s 5 yrs. 120 3 yrs 1 yr. 72 24 Newsstand price @ Rs. 50 6,000 3,500 1,200 You pay Rs. 1,995 1,395 695 Effectiv e saving 66 % 61 % 42 % Free gift

Videocon digital diary Braun pocket shaver -

OTHER HIGHLIGHTS OF THE SCHEME WERE: 25 early bird prizes of Videocon KT 3113 Walkies. Fabulous prizes to be won by lucky draw of all new subscribers. The prizes included Honda City cars, Holiday package to Goa and Mussourie, Videocon refrigerators, washing machines, air conditioners, Toshiba Colour TVs, LML scooters and Kenwood car music systems. The scheme also offered flexibility in the mode of payment for the subscription. The payment was accepted either in the form of cheques, demand drafts or credit cards. The delivery of the first issue, as well as the free gift was promised to be done within 4-6 weeks of receiving the subscription form.

WHY WAS THIS SCHEME LAUNCHED? The main reasons for launching the scheme was to boost the sales of this magazine. The magazine at a price of Rs. 50 was perceived to be an expensive magazine. So, Spectrum Magazines Ltd. thought of introducing a special subscription offer for A&M. they realised that the customers would prefer to subscribe to an expensive magazine if an attractive offer was placed in front of them. Secondly, its nearest rivals, Business Today, Business India, and Business World had also launched their respective offers. So, to counteract this action, it became necessary for A&M to come out with their own subscription offer, much more attractive than other magazines. Thirdly, A&M realised that it was the only magazine which specialised in advertising and marketing and there was no close competitor for the same. So it could easily snatch away the readers of those business magazines who found A&M out of their normal reach. SCHEME DURATION The scheme was launched on the 6th of October 1998, and lasted till 15th November 1998. The duration was of sufficient length; neither too short, nor too long. This duration was proper because it gave the readers sufficient time to think about whether to avail the offer or not. The scheme was launched keeping in view the festive season of Diwali when the consumers are keen to buy new things or entering into new ventures. OUR STRATEGIES FOR A RELAUNCH As is common knowledge, A&M has shut shop. But, if due to some reason it decides to relaunch itself, we have the following sales promotion strategies for them: Objectives First of all we need to set the objectives. The main objective would be to induce the original readers to continue, and broaden the base. Target market

They would therefore be required to define their target market properly. The main target market is a working executive in the field of marketing and advertising. Strategy A&M first needs to reduce its price, because no amount of sales promotion would work if the product were itself so expensive. Further, today all magazines offer discounts and free gifts, due to which the consumers have actually got bored. In the first month or so, they should have these free gifts, so that people actually wanting those free gifts would purchase the product. But after those sales have dried up, A&M would require to innovate its promotions. It could launch a voracious reader scheme, wherein at the end of each month/fortnight, a competition would be held in which all subscribers would be invited. This competition would include a quiz, a crossword, etc based on the contents of the magazine of that month/fortnight. Plus they would write about what they learnt from that issue. The top 3 will be selected and their names would be published in newspapers, magazines, etc. in addition to giving away some free gifts. What the above strategy will do is not only increase sales, but also increase readership. The root cause of discontinuation of subscription is that people dont read and hence think its of no use subscribing. These competitions will urge them on to read even when they are pressed for time. What this will also do is make people aware of the quality of articles appearing in A&M. Therefore, even if the scheme gets discontinued, readers wont change because now they actually know what the quality of A&M is.

PRODUCT CATEGORY CONSUMER DURABLES GODREJ Vs SAMSUNG washing machines Objectives Godrej: to increase market share Samsung: to combat competitors strategy and protect their market. Type of scheme Godrej 1. Customer promotion scheme Here the customer is benefited. The company is following this scheme by giving rebate on the original price of the product (it cut down the price from Rs. 14,999 to Rs. 13,000). It is also giving a free gift (a VIP suitcase) and special loans to its customers. It is charging 0% interest loans for its products to the customers. 2. Trade promotion scheme Here the middleman (retailer) is benefited. Godrej is giving 10-15% of the profit to the retailers if they are unable to meet a specific target. Samsung Customer promotion scheme. Samsung is giving rebates on the original price of the product (its fully automatic washing machines worth Rs. 21,000 are now costing Rs. 18,000), and are also a giving a free gift (a camera). COMPARISONS Godrej Loans Free gift Service Price 0% interest loan VIP suitcase More service points Less Samsung Not applicable A camera Limited service points High

Large - (semi & fully Automatic washing machines) Result of scheme Sales of Godrej went up by 70%. Sales of Samsung went up by 30%. Analysis

Product range

Limited - (fully Automatic washing machines)

The free gift of Godrej (the VIP suitcase) has more utility, is a necessity, and is required by all classes of people. Whereas, camera is a sort of luxury item and is required only by specific classes. Hence, the strategy of Samsung is that of a follower and they are playing defensive. Recommendations Samsung should have had an exchange offer and contests instead of following Godrej and giving a free gift. The exchange offer would have attracted many second or third time buyers, more so because it is a foreign company. Contests would attract first time buyers who would like to have an experience while deciding. Moreover, product features do not differ much in this case and hence the final decision is influenced by sales promotions to an extent. It is here that Samsung should have used their creativity and had a promotion, which would have attracted both, first-time, and non-firsttime consumers. Recently they have come up with the phod ke dekho and phir se phod ke dekho promotions, which are not run-of-the-mill. Even here, free gifts are being given away, but the important thing is that the promotion has been packaged differently in the form of a plastic nariyal (coconut). Even the selection of the nariyal is significant because in India, there is a tradition of breaking a nariyal every time something new and good is about to be commenced. It is a symbol of good luck. Thus, this has really caught on the fancy of many a consumer and sales have picked up at a rapid pace.

CATEGORY SERVICES FAST FOOD INDUSTRY DOMINOS TARGET CONSUMER A target consumer for Dominos is anyone who wants convenient food. The major consumers of pizzas in India are the Kids, Teenager and the young working class crowd. Dominos targeted these segments, however now they are targeting families also. This is reflected in their current ads and promotions. Dominos targets all those who are pizza lovers and young at heart. Competition: Dominos believes that every food outlet that exists in the vicinity of its own pizza outlet constitutes competition. Objective: Increasing the appetite of an individual customer by providing incentive to buy a larger pizza. Expanding to target families as consumers. Dominos introduces offers, schemes and launches new product variants every quarter to ensure awareness among its customers and accomplishes its brand building exercise. Promotion: Free coupons sent as fliers that enable customers to save a certain amount of money on their orders. Eg:Meal for two Buy a medium 10 pizza with any one veg topping for RS 99<save Rs40> The most recent scheme of Dominos is introducing garlic breadsticks free with every large pizza worth Rs.199 or more. This has also been advertised through television that shows a family as the target audience for this scheme. The neighbourhood of the week scheme. They identify a potential area where demand has not picked up yet, after which they concentrate on the selected area and ensure increased sales through various promotions. They have a customer loyalty programme whereby they maintain a database of their regular customers and keep them informed of all the new schemes, discount offers,etc. They are also sent discount coupons through direct mailers which acts like a reward to the star customers and delights them. Dominos had another offer which was called the U-buzz offer which was a tie-up with AirTel.

DOMINOS SALES FORCE PROMOTIONS Dominos inculcates the core values of the company into its salesmen and provides them with a lot of incentives which help them push the group. When a new store is opened, Dominos has certain opening incentives where they set a benchmark on the basis of expected sales (average weekly unit sales) and once the store achieves this target, the store manager gets a reward of $500. International and National Level Awards These incentives can be termed as attractive because they actually are given to the selected few who have excelled in some area and are then rewarded at an international conference and they are rated not just within their country but on an international level. For instance say The Manager of the Year will have nominees from all over the world and the person getting this title will have earned it out of 7000 outlets the world over. There are 4 levels of challenges (each of them) stretching through a 13 week period at the end of which the sales are compared to those of the corresponding period of the previous year. Silver Challenge This challenge requires a store manager to achieve a 25% increase in sales and if he manages to do so then he is awarded the silver cap and pockets a cash prize of 250$. Golden Challenge This challenge requires a store manager to achieve a 50% increase in sales and if he manages to do so then he is awarded the silver cap and pockets a cash prize of 500$. Platinum Challenge Here the percentage expected is 75% and the cash prize increases to 750$ Diamond Challenge Here with an expected increase of 100% this becomes not only the toughest challenge but also the most coveted one.

As we can see, with all these challenges the status goes on rising and so does the cash incentive. Other than this the person receives international

recognition through acknowledgements meted out to him in the Pepperoni Express. In case of the award category Rookie Manager of the Year the person selected wins a trip to Las Vegas and Miami. Incentives at the Local Level: For each store manager his store is his baby and he has staff welfare fund allotted to him and the store manager has got discretion to use this budget. He uses it as a carrot theory to improve the productivity of the team members. He could do this in the form of free movie tickets or free pizzas etc. Pins and badges are awarded to team members recognizing their achievements. They have various star ratings for different stores. Owing to this every store puts in their best to acquire the five star rating.

Medium of communicationDominos believes firmly on the principles of direct marketing. The area of operations of a Dominos outlet is restricted and hence mass advertising does not benefit it in any way in the sense that any leads generated as a result of it shall be nullified as it will not be able to service such orders that are outside its purview. Therefore it Communicates with its customers through Sponsorships at festivals, Sachin VISA tie-up, Fliers door hanging Media for brand building - TV, Times of India VISA ABN AMRO Cartoon Network Jet Airways The core promotional activity performed is door hangings. They have a unique design and each hanging is complete with its own set of schemes and offers to lure the customers. The task of reaching the hangings to every house is done between 1-3o clock; during the time when the number of orders are minimal. It is ensured that every house in the locality is covered and no stones are left unturned in reaching the fliers to the houses of the regular customers, if not all the people of the area.

ResultsThe store manager of Dominos claims that after the launch of promotional scheme there is a substantial increase in sales. The most recent promotion i.e the garlic bread offer saw an increase in sales to the extent of 45%. CATEGORY WEBSITES INDYA.COM ObjectivesBuild the brand, get consumers online and make them come again and again to Indya.com. Type of promotions Offline promotions are as important as online promotions to indya.com in order to build affinity to the brand as customers only interact with brands that they have faith in. hence promotions were carried out at various access points-TV, print, outdoors, on-ground and retail. Promotions with Cyber cafsAbout 50% of Internet access in India is from cyber cafs. To capitalise on this, indya.com has tied up with 950 cyber cafs (called indya cafes) across the country. These cafes are highly suitable for promotions. This has mutual benefits says Neeti Chopra, vice-president, alliances, Indya.com. Indya.com drives traffic to the cafes, which in turn provide a place for access to our site. Indya.com is the default homepage in these cafes. Online promotionsPioneered the concept of online movie promotions in India.

What were the promotions about? OfflineFor on-ground and retail promotions, we have signed up with Delhi based kidstuff. Cyber cafesThey have promotions targeted at free owners, like a free holiday for the owner of the best done up cafe. Indya.com's Christmas promotion for instance was one wherein you could win prizes if 'Santa singh' caught you surfing the indya.com website at any of the Indya cafes.

Online promotions Launched J.P. Dutta's 'Refugee' in July 2000. Created Refugee.indya.com where they gave insight into the movie and brought in consumer experience." A similar, but more interactive, promotion followed with Missionkashmir.indya.com. For the first Independence Day of the new millennium, the portal launched "Meri Marzi freedom poll" where users could vote for their choice of events, institutions, personalities, news and other topics that have had an impact on India post independence. During the Olympics, the portal launched a new channel Olympics to let users participate in interactive games and quizzes. Some promotions were done in association with a couple of its partner channels namely jobsahead.com and apnaloan.com. 'Smart Cv contest' in October 2000 was a promotion wherein 15 candidates with the best resumes won an interview with one of the top five companies in India. Likewise, 'Become Lakhpati' was a promotion whereby any use of the right four and quarter credit card on indya.com qualified for a lucky draw with a prize of Rs one lakh. Pull or Push Strategy ? The company has used an efficient mixture of pushing the portal through cyber cafes and pulling the customers towards the portal through their offline and online promotions. Their concept behind the promotionSays Chopra," our promotions are very simple. But we build usefulness into brand, which in turn brings stickiness on the site. The idea and execution of promotions reflect the weight and wisdom of indya.com. We learn from every promotions and are able to fine-tune the next ones." They enable everyday usefulness so that users keep coming back. The First day, they may come for promotions. The next day they may come to read news populist property for sale. They offer 44 products and services on-line transaction oriented promotions or for various conveniences.' ResultsSuccess on the Internet is based on unique brand building and Indya.com has built the essence of it being a great brand through its promotions. It relates to the ethnicity of India and has a vibrant attitude. These promotions, the company claims have helped high brand recall for indya.com in the Indian Internet space

INDUSTRIAL PRODUCTS Generally for industrial products the kind of sales promotions done are mentioned below. Volume discounts: On purchase of products over a ceratin quantity the custmer is given discounts which vary from product to product and company to company. Loyalty programs: This are a very important part of industrial products. This is because once a company starts buying a particular product form a particular company they stick to that. Hence it is necessary to reward consumer loyalty. Seminars and Conferences: Seminars and conferences are a very important part. Most of the times getting the consumer id done through seminars. For eg. A cement manufacturer foten organizes seminars to educate the consumer about the product. Microsoft Corporation (India) Pvt. Ltd. Promotion: Microsoft Windows XP launch-October 2001 Objective: to make people aware of Windows XP operating system in India City: Mumbai, Delhi Strategy: From 10 days before the actual event, kiosks were set up all over the city to invite people to use XP for themselves. They were the quizzed on the same, and upon answering correctly, they were given free consumer passes to mega-event the launch. In Delhi, Ansal Plazas amphi-theater and Mumbais Nehru center was converted into a mini Consumer-expo with stalls of Compaq, Intel, Hewlett-Packard, Sony, HCl, and NIIT apart from the main windows XP stall, games and activities were held inside these, along with live demonstrations of XP features. This was a 2-day event and crowds thronged the venues on both days. SmithKline Beecham Promotion: boost enerhgizer Objective: To promote Boost sachet in offices. City: Delhi, Mumbai, Chennai, Kolakatta, Hyderabad, Banglore

Staretgy: An extensive sampling promotion was undertalken for the boost energizer sachet drinks in offices. Salesforce teams visited offices and personally handed over the sample packs to the staff. PROMOTIONS TEMPTATIONS Just one year after its launch in September 2001, Temptations hasalready managed to garner a3% volume market sahre in the 9000 tonne or Rs. 550 crore marketin India. But the compnay realised just launching a revolutionary would not be sufficient, it had to be backed by extensive promotions and advertising to ensure its success. Objective: To induce trials and increase market share Promotions: Numerous promotions and online contests were launched for the purpose. The budget fixed for promotions were 1.5 crore. Cadburys tied up with ICICI bank ATMs and Teatres for its advertisements. 300 bars of temptations were given in a promotion in association with Crossroads where in on a purchase upto a certain amount a free Temptations was given. The firm alos identified 60 upmarket restaurants where 80-100 bars of tempatations were given away. The firm tied up with Star network to launch online contests Tempting Treats The customer had to log on to www.temptationsworld.com click on the Star logo and then answer a question based on the Star programme. The contest happened between Feb2001 April 2001. The bumper proze for the winner was A ford Ikon . Sweet Surprises

The contest could be entered through internet or SMS. The winners would get atrip for 2 to Australia.

SAMSUNG DABAKE JEETO OFFER: Digital technology leader, Samsung India Electronics Ltd., has launched a mega promotion for the forthcoming Soccer event, called Samsung Dabaake Jeeto Offer. Objective: Targets Rs.310 Crores worth of Sales from this Promotion Samsung Dabaake Jeeto Offer has been launched with

the objective of stimulating the market and optimizing the sales of our products during the forthcoming Soccer season states Mr. R. Zutshi, Vice President Sales, Samsung India.
Timing : This Promotion was live in West Bengal on May 1, 2002 and All India on May 10, 2002 was valid uptil June 30, 2002. Promotion: During the duration of the promotion, every Samsung Consumer Electronics or Home Appliance product purchased by a customer entitled him/her to a Sure Shot Alarm Clock from Samsung. The Alarm Clock waspacked in a Plastic Football that was given to the Customer at the time of purchase. On pressing the Football from the top, the customer gets the Sure Shot Alarm Clock and if he/she is lucky, they will find a tamper proof anodized sticker of the gift on the clock. The customer wins the gift etched on the sticker. This Promotion had gifts worth Rs.10 Crores for the customer and the Dream Prizes for customers included Samsung Digital Flat TVs, Frost-free refrigerators, Microwave Ovens, Karisma Washing Machines, Mobile Phones, Cameras and Soccer 2002 Official licensed T-Shirts from Adidas. The total cost of this consumer promotion was Rs.15 Crores, including the Gifts. The Company released new print and television commercials around this Campaign and carried out In-Shop Hungamas at select dealer counters in Kolkata, Goa and Cochin to create visibility for this Campaign.

CINTHOL : Cinthol celebrates 50 years of skincare with exciting promotional offers Cinthol celebrates 50 years of skincare this August. India's first deodorant and complexion soap was launched on 15th August, 1952 and in these 50 years of the brand has crossed many glorious milestones. The flagship brand of Godrej Consumer Products Limited, Cinthol is celebrating its month long Golden Jubilee with exciting offers for both the trade and the consumers. For its consumers, Cinthol has launched a special Golden Jubilee offer carton pack of three soaps. The offer is valid only on the Cinthol deodorant and complexion soap. The special offer pack is in the striking original red colour of Cinthol and is priced at Rs.50. The offer is available all across the country. Cinthol has also launched a "Stock And Win" Golden Jubilee trade scheme in which stockists can win a number of prizes including Cinthol gold coins and diamond rings GODREJ FAIRGLOW: Godrej FAIRGLOW, the unique fairness brand from Godrej has announced the launch of its VALENTINE SPECIAL on its website www.fairglow.com February 6, 2002, Mumbai : The VALENTINE SPECIAL is featuring a host of offers & activities to satisfy the needs of young couples. The most amazing offer is the SEND A ROSE promotion, whereby consumers have the chance of sending a rose FREE to their valentine alongwith their message. Also, consumers can participate in the very interesting 'Fairglow - Catch the Queen of Hearts' contest and win Rs. 1000 everyday. The VALENTINE SPECIAL also features interesting ideas like the Love -greetings and E- kisses section where users can send these beautiful cards to their valentine, the Dr. Love & Astro Love calculators where they can find out more about their partners and the very interesting Love Poll. Users can also download amazing wallpapers, love stationery and screensavers from the site.