Sales promotion is bigger in the UK than advertising often with engaging replica items used to promote the product being sold (such as Transformers, The Last Knight pictured here). Sales promotion is a ‘below-the-line’ activity used with customers, distributors and suppliers as well as with the company’s own staff/salesforce. Promotions can be used for both services and products in consumer and business-to-business markets. The UK promotion marketing industry grew by an average 10 percent per year in recent times.
The main categories are;
- Consumer: gifts, giveaways, prizes, point-of-sale items, competitions, tokens, gift cards, free products (buy 9 coffees, get the 10th free).
- Trade Promotions: point-of-sale, special terms of business, free pens/diaries etc, competitions, free products for their sales force to sell more of your products or promote them more
- Salesforce: Incentives, motivational programs etc
Consumer sales promotions mostly affect the latter stages of the buying process (competitions, point-of-sale, free gifts, coupons, free samples, display promotions). These types of promotion marketing triggers action such as purchase or increased brand use/loyalty. Opposite to promotions, advertising tends to affect the early stages of the buying process like awareness, interest and desire to buy a particular brand.
So, of the A.I.D.A. marketing model;
Advertising = Awareness, Interest & Desire (AID)
Promotion = Action (A)
A good marketing strategy will integrate promotions into other marketing communication tools, such as packaging, point-of-sale, merchandising, sponsorship, PR, advertising and sales. Those promotions supported by media will do better than those without support. Even a great sales promotion will fail if nobody knows about it…
Some promotions add value to the image of the product. Those promotions have a free gift that is somehow related to the properties of the brand. Franchise building promotions are the opposite to pricing or discount promotions which dilute the brand value. Franchise promotions build brand loyalty against competitors. Discount promotions build short-term sales but risk losing customers to rivals if their pricing beats yours i.e. low loyalty value.
The objectives of a good promotion marketing will be to;
- Increase sales by rewarding customers; engage customers into loyalty schemes where they have to collect points and so are less likely to switch to a competitor; increase repurchase rates; trigger an impulse purchase from new customers; introduce a new product line; achieve brand repositioning; or remove seasonality from previously seasonal products.
- Create new sales leads
- Move slow moving or excess stock
- Block a competitor (if a brand offers good promotions at a time when they know a rival needs to shift stock they will cause a stock pile-up and damage their rival
- Build a database of customer information for future direct mail activity.
There is much more to promotional marketing which we will continue with in future news articles. Key points to remember are that sales promotions can be used for short-term sales objectives to shift stock etc or to build longer-term loyalty such as the Tesco reward card. But all agree that promotions must integrate into the other elements of the marketing mix. Speak with your Account Services team for more information.
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A.I.D.A. – Awareness, Interest, Desire, Action
YouCom Media News, July 2019, London, ‘Promotion Marketing.’