15.6 Main Types of Sales Promotion
3 min read•june 25, 2024
is a crucial marketing tool that boosts short-term sales and brand awareness. It's split into consumer-oriented and trade-oriented strategies, each targeting different parts of the distribution chain. Consumer promotions like and directly influence buyers, while trade promotions motivate retailers to push products.
These strategies work together to create a comprehensive sales promotion plan. Consumer promotions drive demand and encourage product trials, while trade promotions ensure products are well-stocked and prominently displayed in stores. Both types aim to increase sales, market share, and brand loyalty through various incentives and engagement tactics.
Consumer-Oriented and Trade-Oriented Sales Promotion
Consumer vs trade promotion techniques
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- Targets end consumers directly influences their purchasing decisions
- Aims to stimulate immediate sales encourages product trial and
- Examples include coupons (), samples (free trial sizes), (, ), and ()
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- Targets such as wholesalers, distributors, and retailers
- Focuses on motivating intermediaries to stock, promote, and sell products to their customers
- Examples include (discounts, incentives), (shared ad costs), and (rewards, bonuses)
Consumer-oriented promotion strategies
- Coupons
- Offer a discount on the product price for a limited time encourages purchase
- Encourage trial of new products and repeat purchases of established brands
- Can lead to (buying in bulk) and brand switching (trying competitors)
- Samples
- Provide a free trial of the product allows consumers to experience it firsthand
- Help consumers evaluate the product reduces perceived risk of trying something new
- Can lead to immediate sales if consumers like the product and long-term customer acquisition
- Contests and sweepstakes
- Offer prizes or incentives for participation creates a sense of excitement and engagement
- Generate buzz and brand awareness as consumers share and discuss the promotion
- Can increase brand loyalty and customer retention as participants feel valued and rewarded
- Rebates
- Provide a refund or cashback offer after the purchase is made encourages higher-priced purchases
- Encourage larger purchases or bundling of products to maximize the rebate amount
- Can stimulate sales without reducing the perceived value or prestige of the product
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- Attract attention and influence impulse buying decisions at the point of sale
- Highlight product features, promotions, or new offerings to customers in-store
Trade promotion methods and impacts
- Trade allowances
- Offer discounts, rebates, or incentives to retailers for stocking and promoting products
- Help secure prime shelf space and improve product visibility in stores
- Can lead to increased sales volume and market share as more retailers carry the product
- Cooperative advertising
- Share advertising costs between the manufacturer and the retailer for local promotions
- Provide support for retailers' advertising efforts and customized marketing materials
- Can enhance the partnership and collaboration between the manufacturer and the retailer
- Dealer incentives
- Offer rewards, bonuses, or perks for achieving sales targets or outperforming competitors
- Motivate dealers and their sales teams to prioritize and recommend the manufacturer's products
- Can lead to increased sales effort, product knowledge, and customer support at the point of sale
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- Provide a platform to showcase products, demonstrate features, and interact with potential partners
- Help establish new distribution channels and strengthen relationships with existing intermediaries
- Can generate leads, facilitate negotiations, and drive business-to-business sales opportunities
Sales Promotion Strategies and Tactics
- Sales promotion
- Short-term incentives to encourage purchase or sales of a product or service
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- Focuses on promoting the product to intermediaries to "push" it through the distribution channel
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- Aims to create consumer demand to "pull" the product through the distribution channel
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- Reward repeat customers to encourage continued patronage and increase customer lifetime value
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- Temporary price reductions or special offers to stimulate sales and attract price-sensitive consumers
Key Terms to Review (24)
Brand Switching: Brand switching refers to the behavior of consumers who shift their loyalty from one brand to another within the same product category. It involves the conscious decision to replace one brand with a different one, often driven by factors such as dissatisfaction, availability, or the appeal of a competing brand.
Cents-off Deals: Cents-off deals are a type of sales promotion where a product is offered at a discounted price, typically by reducing the price by a certain number of cents per unit. This type of promotion is used to encourage consumers to purchase the product and increase sales volume.
Channel Intermediaries: Channel intermediaries are the various entities that facilitate the movement of goods and services from producers to consumers within a marketing distribution channel. These intermediaries act as a bridge between the manufacturer and the end-user, providing value-added services that enhance the overall efficiency of the supply chain.
Consumer-oriented Sales Promotion: Consumer-oriented sales promotion refers to marketing strategies and tactics that are specifically designed to directly engage and incentivize consumers to purchase a product or service. These promotions aim to increase short-term sales and boost brand awareness by providing value-added benefits to the end-user.
Contests: Contests are promotional activities where participants compete to win a prize or reward. They are commonly used as part of a company's overall marketing and sales promotion strategy to engage consumers, generate interest, and incentivize desired behaviors.
Cooperative Advertising: Cooperative advertising is a type of promotional strategy where two or more parties, typically a manufacturer and a retailer, share the costs and responsibilities of an advertising campaign. This collaborative approach aims to increase the visibility and effectiveness of the advertised products or services, benefiting both parties involved.
Coupons: Coupons are a type of sales promotion that offer consumers a discount or special offer on a product or service. They are used by marketers to incentivize purchase, increase brand awareness, and build customer loyalty.
Dealer Incentives: Dealer incentives are financial or non-financial rewards provided by manufacturers to their dealers or distributors to encourage specific sales behaviors or performance goals. These incentives are a key component of sales promotion strategies within the 15.6 Main Types of Sales Promotion framework.
Exhibitions: Exhibitions are organized events where businesses, organizations, or individuals display and showcase their products, services, or ideas to a targeted audience. These events serve as platforms for companies to promote their offerings, network with potential customers, and gather valuable market insights.
Giveaways: Giveaways are a type of sales promotion where a product or service is offered to consumers for free, with the goal of generating interest, increasing brand awareness, and ultimately driving sales. They are a common marketing strategy used across various industries to incentivize customers and encourage product trial or loyalty.
Loyalty Programs: Loyalty programs are structured marketing strategies designed to encourage customers to continue doing business with a particular brand, company, or group of affiliated brands and companies by providing rewards or incentives for repeat business. These programs aim to foster customer loyalty, increase customer retention, and drive repeat purchases.
Money Back Offers: Money back offers are a type of sales promotion where the seller provides a full or partial refund to the customer if they are not satisfied with the product or service. This type of offer aims to reduce the perceived risk for the customer and encourage them to make a purchase.
Point-of-Purchase Displays: Point-of-purchase displays are promotional tools used at the location where a consumer makes a purchasing decision, such as in a retail store. These displays are designed to capture the attention of shoppers and encourage impulse purchases or increase sales of specific products.
Price Promotions: Price promotions are temporary reductions or discounts applied to the regular price of a product or service, with the goal of increasing sales and attracting customers. They are a common type of sales promotion used by businesses to stimulate demand and remain competitive within the market.
Pull Strategy: A pull strategy is a marketing approach where the manufacturer or producer focuses on stimulating consumer demand for a product or service, rather than pushing it through the distribution channel. The goal is to create a 'pull' from consumers that then drives retailers and wholesalers to stock and promote the product.
Push Strategy: A push strategy is a type of marketing approach where a company focuses on pushing its products or services through the distribution channel to the end consumer, rather than directly promoting to the consumer. The goal is to incentivize and motivate the intermediaries, such as wholesalers and retailers, to actively promote and sell the company's offerings.
Rebates: Rebates are a form of sales promotion where a consumer receives a partial refund of the purchase price after providing proof of purchase. Rebates are commonly used to incentivize consumers to make a purchase, often for higher-priced items, and can be an effective tool in the promotion mix.
Sales Promotion: Sales promotion refers to the various marketing activities and techniques used to temporarily increase the demand or availability of a product or service, often through the use of incentives or special offers. It is a key element of the promotion mix, complementing advertising, personal selling, and other promotional strategies to drive sales and engage customers.
Samples: Samples refer to a small, representative portion of a product or service that is provided to potential customers or consumers for the purpose of evaluation, demonstration, or trial. Samples are a common sales promotion tactic used across various industries to generate interest, encourage product trial, and ultimately drive sales.
Stockpiling: Stockpiling refers to the practice of accumulating and storing large quantities of a product or resource, often in anticipation of future shortages or price increases. This term is particularly relevant in the context of sales promotion strategies, where stockpiling can be used as a tactic to drive immediate sales and increase customer loyalty.
Sweepstakes: A sweepstakes is a type of sales promotion where prizes are awarded to randomly selected participants who have entered the promotion, typically without requiring any purchase or consideration from the entrants. Sweepstakes are a common marketing strategy used to generate interest, increase brand awareness, and incentivize consumer engagement.
Trade allowances: Trade allowances are promotional discounts or incentives offered by manufacturers to wholesalers or retailers to encourage them to promote and sell their products. These allowances can take various forms, such as price reductions, promotional funds, or special terms for bulk purchases, all aimed at stimulating sales and enhancing distribution strategies. Trade allowances play a crucial role in the overall sales promotion strategy, effectively incentivizing intermediaries to support a brand's marketing efforts.
Trade shows: Trade shows are events where businesses in a specific industry gather to showcase their products, services, and innovations to potential customers, industry peers, and media representatives. They serve as platforms for companies to network, generate leads, and stay up-to-date with the latest trends and developments within their respective markets.
Trade-oriented Sales Promotion: Trade-oriented sales promotion refers to the various marketing activities and incentives that manufacturers or producers offer to their distribution channels, such as wholesalers, retailers, and other intermediaries, to encourage them to stock, promote, and sell the manufacturer's products more effectively.