Overview
This lecture explores the main types of sales promotions used by companies, their objectives, differences between consumer and business (trade) promotions, and the concepts of push and pull promotional strategies.
Types of Sales Promotions for Consumers
- Sales promotions supplement advertising, PR, and personal selling by offering incentives for quicker or larger purchases.
- Common consumer promotions include samples, coupons, premiums, contests/sweepstakes, loyalty programs, rebates, and point-of-purchase displays.
- Free samples encourage product trial and build awareness, especially effective with food.
- Coupons provide immediate price discounts, often used more in weak economies.
- Premiums are free or low-cost items provided with purchase to encourage repeat buying.
- Contests and sweepstakes offer chances to win prizes and increase customer engagement.
- Loyalty programs reward repeat purchases with points redeemable for goods or services.
- Rebates refund part of the purchase price after consumers submit required documents.
Types of Sales Promotions for Businesses (Trade Promotions)
- Trade promotions target channel members like wholesalers and retailers rather than end consumers.
- Common trade promotions include trade shows, conventions, sales contests, trade/advertising allowances, product demonstrations, training, free merchandise, and push money.
- Trade shows and conventions allow companies to display products, generate leads, and gather feedback.
- Sales contests incentivize salespeople to sell specific products, often with prizes.
- Trade allowances and advertising allowances give retailers incentives to promote or stock products.
- Training and product demonstrations help retailers or sales staff understand and sell products.
- Free merchandise and push money encourage retailers to promote certain items.
Push vs. Pull Strategies
- Push strategies promote products to channel members (retailers/wholesalers) who then push products to consumers.
- Pull strategies target final consumers directly to create demand, encouraging retailers to stock the product due to consumer requests.
- Many companies use both push and pull strategies to maximize distribution and sales.
Key Terms & Definitions
- Sales Promotion — Short-term incentive to encourage purchase or sale of a product.
- Sample — Small free amount of a product offered to encourage trial.
- Coupon — Voucher for immediate price reduction on a product.
- Premium — Free or low-cost item given with a purchase.
- Rebate — Partial refund after proof of purchase is submitted.
- Loyalty Program — Rewards program for repeat buyers.
- Trade Promotion — Sales incentives directed at business partners/channel members.
- Trade Show — Event for businesses to display products to other organizations.
- Push Strategy — Promotes products to channel partners to encourage stocking.
- Pull Strategy — Promotes products directly to consumers to generate demand.
Action Items / Next Steps
- Find and review examples of both consumer and trade sales promotions.
- Be prepared to answer: objectives of sales promotions, what a trade promotion is, examples of consumer and business promotion tools, and differences between push and pull strategies.