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TYPES OF PROMOTION
AND
PROMOTIONAL PLAN
SUBMITTED
BY: GROUP 2
Andrino, Roel N.
Arante, Raymund Fiel C.
Barra, Anjenette C.
Biado, Jennifer
Esperanza, Peter Francis
Guting, Jeralyn S.
Kintanar, Benjamin Leoric E.
Mesias, Kate Ann C.
Navarro, Mariane Nicole R.
Sierra, Jilzander John B.
Valenzona, Angeli T.
BSBA MM 2 - 1
TO:
Sir Erwin Vicman Lara
PROFESSOR
I.
Consumer Promotions
A. PRICE DEALS
A consumer price deal saves the buyer money when a product is purchased.
The price deal hopes to encourage trial use of a new product or line
extension, to recruit new buyers for a mature product, or to reinforce existing
customers' continuing their purchasing, increasing their purchases,
accelerating their use, or purchasing of multiple units of an existing brand.
Four main types of consumer price deals are used: coupons, price discounts,
price pack deals, and refunds or rebates.
1. Coupons
Coupons are legal certificates offered by manufacturers and retailers. They
grant specified savings on selected products when presented for redemption
at the point of purchase. Manufacturers sustain the cost of advertising and
distributing their coupons, redeeming their face values, and paying retailers
a handling fee.
Manufacturers disseminate coupons in many ways: direct deliver by mailing,
dropping door to door, or delivering to a central location such as a
shopping mall. They may distribute them through the mediamagazines,
newspapers, Sunday supplements or freestanding inserts (FSI) in
newspapers. They may insert a coupon into a package, which is called inpack coupons, or attach it to, or print it on a package that called on-pack
coupons. Coupons may also be distributed by a retailer who uses them to
generate store traffic or to tie in with a manufacturer's promotional tactic. Ecoupons or online coupons are another form of sales promotion; they are
extremely effective for luring in customers. The most popular uses of ecoupons are for sales of groceries, books, and health and music products.
2. Price Discounts
Price-off deals offer a consumer peso off merchandise at the point of
purchase through specially marked packages. A 10 percent or 20 percent
price reduction is a typical price-off offer. A price-off is clearly labeled as such
on the package. Price-off reduces the price of a brand to that of a competitor
and gives a direct and positive benefit to the consumer. It increases the
value of the brand. Immediate price reduction is the technique that exerts
greatest influence on the brand choice process of the consumer.
Reporter: Arante, Raymund Fiel C.
3. Price Pack Deals
Bonus Packs
Bonus packs are extra quantities of a product that a company gives to
consumers at the regular price. This technique is routinely used for cleaning
products, food, and health and beauty aids to introduce a new or larger size.
Example, a company may also offer a bonus pack or a special pack with 20
percent more in order to encourage a customer to purchase a product.
Banded Pack
Two or more units of a product are sold at a reduction of the regular singleunit price. Sometimes companies bundle products together in order to
promote a new product or to encourage consumers to try a complementary
product, such as a free small conditioner bundled with a shampoo purchase,
toothbrush and toothpaste offers or a free disposable razor with a shaving
cream purchase. More often, the products are simply offered in a two-for,
three for, or ten-for format. In other cases, a smaller unit of the product may
be attached to one of the regular size.
B. Premiums
Premium is tangible compensation, an incentive, given for rendering a
particular deed, usually buying a product. The premium may be free, or, if
not, the cost is well below the usual price.
1. Direct premium
Games are activities that provide an instant reward for the consumers.
Unlike sweeps and contests, that delay gratification and require the
consumer to wait an extended period before determining whether he or she
is a winner.
Product Demonstration
G.Special Events
II.
Trade Promotions
1.
2.
3.
4.
C. Trade Deals
Trade deals are often special price concessions superseding, for a limited
time, the normal purchasing discounts given to the trade. Trade deals include
a group of tactics having a common themeto encourage sellers to specially
promote a product. Trade deals are the primary expectation for retail
support. There are two main types of trade deals:
1. Buying Allowance - a bonus paid by a manufacturer to a reseller when a
certain amount of product is purchased during a specific time. All the reseller
has to do is meet the criteria of the deal. The payment may be a check or a
reduction on the face value of an invoice. For example, a reseller who
purchases ten to 15 cases receives a buying allowance of Php100 off per
case; a purchase of 16 to 20 cases would result in Php150 off per case, and
so forth. In order to enjoy a buying allowance, some retailers engage in
forward buying, a practice very common in grocery retailing. In essence,
more merchandise than needed during the deal period is ordered. The extra
merchandise is stored to be sold later at regular prices. The savings gained
through the buying allowance must be greater than the cost of warehousing
and transporting the extra merchandise.
a. Buy-back allowance - It immediately follows a previous trade deal and
offers a specified bonus for new purchases of the product related to the
quantity of purchases from the first deal. The purpose is to motivate
repurchase immediately after the first trade deal once the product has
depleted warehouse stock. Manufacturers often give retailers allowances or
discounts for performing certain promotional or merchandising activities in
support of their brands.
amount of the same or a different product. The bonus is in the form of free
merchandise instead of money. For example, a manufacturer might offer a
retailer one free case of merchandise for every 20 purchased.
2. Display Allowance - Some manufacturers pay retailers to select their
display from the many available every week. The payment can be in the form
of cash or goods. Retailers must furnish written certification of compliance
with the terms of the contract before they are paid. Retailers tend to select
displays that are easy to assemble and yield high volume and profits.
3. Reporter: Mesias, Kate Anne C.
E. Trial Offers
Trial offers are attractive to business buyers because the items they buy
usually involve high cost and long life. They can reduce risk of selecting a
wrong item.
F. Trade Shows
At trade shows, related products from many manufacturers are displayed
and demonstrated to members of trade. Company representatives display
and demonstrate its products and explain its features and functions. This
technique is particularly suitable for small firms that cannot advertise and
have a sales force too small to reach its potential customers.
G.Deal Loaders
Promotional Plan
An outline of
the marketing
tools, strategies and resources that
a company intends to use to promote a product or service. A promotional
plan
is
usually
considered
a
vital
planning
tool by
most business managers that
helps contribute toward
the
successful launch of a new product or service or its expansion into a
new market.
6 Stages Involved in Sales Promotion Planning by DR. B. Balaji
1. Establishment of objectives:
Sales-promotion objectives vary according to the target market. If the target
is the customer, objectives could include the encouragement of increased
usage or the building of trial among non-users or other brand users. For
intermediaries, objectives could be to encourage off-season sales or
offsetting competitive promotions. Sales-promotion activity could also be
aimed at internal personnel, making up part of the reward system
4. Pre-testing:
This needs to be undertaken to ensure that potentially expensive problems
are discovered before the full launch of a promotion. Testing in selected
market segments can highlight problems of ambiguity, response rates and
give an indication of cost effectiveness.
6. Evaluation:
The performance of the promotion needs to be assessed against the
objectives set. If objectives are specific and quantifiable, measurement
would seem to be easy. However, extraneous factors could account for the
apparent success of many sales-promotion activities.
References:
Book
Sanciano, H. M. Consumer Promotion. Sales Promotion Principle & Best
Practices. 2010. Philippines: Anvil Publishing, Inc. pp.59 61
Web