Price and non-price sales promotion as a method of intensifying the sale of pet products

Content

• The essence of sales promotion
• How to plan incentives
• Types of incentives
• What is the purpose of sales promotion?
• Incentive objects
• Price methods of sales promotion
• Disadvantages of pricing methods
• How effective are pricing methods?
• Non-price methods of stimulating product sales
• Useful tips
• Conclusion

It happens that advertising is not enough to promote a product or service. Therefore, we have to resort to other marketing means and stimulate sales. Let's talk today about how this happens and what methods exist.

Price and non-price sales promotion as a method of intensifying the sale of pet products

Price and non-price sales promotion as a method of intensifying sales
The modern market for pet products and pet services is developing rapidly, which means there is fierce competition between enterprises. Manufacturers and intermediaries are looking for improved systems to attract new customers and strive to retain existing ones. Along with other means of promoting pet products to the market (advertising, propaganda, personal selling), sales promotion occupies an important place.

Modern economic literature defines sales promotions as short-term incentive measures that stimulate sales of a new pet product or popularize a brand among consumers. The main goal of sales promotion in relation to consumers is an incentive to buy regularly with a certain commercial benefit from the purchase. Sales promotion has always had the task of intensifying the sales process. Therefore, it is considered as actions, events, promotions aimed at creating additional motivation to carry out trading operations in the very near future. In general, sales promotion includes price and non-price methods.

Considering price incentives, it can be noted that price reductions can be initiated by both the manufacturer (who seeks to increase sales or attract new consumers) and a trading enterprise that wants to gain a reputation as an inexpensive retail establishment.

A price reduction can also be the result of a mutual agreement between two parties: the manufacturer provides a discount to the retail chain, and the latter partially or fully provides it to the consumer. At the same time, appropriate advertising and information messages are addressed to the consumer in order to encourage him to make a purchase at a specific retail outlet. Price incentives for buyers are carried out depending on the terms of delivery of products, purchase volumes, payment methods, insurance conditions, etc.

Price-based sales promotion methods that are used in the market today include: direct discounts, special prices, combined sales, crediting the price of an old pet product when purchasing a new one, couponing.

Read the article Analysis of the use of psychological influence tools on customers in supermarkets

A price reduction using a direct discount can occur in the form of:

• discounts in percentage – it is noted that the price is reduced by X%;
• discount indicating its size in monetary terms (“minus RUR”);
• indicating the new price and information about the reason for its installation.

When applying special prices or small wholesale sales, the price reduction applies not to an individual pet product, but to a small batch. Offering a special price is aimed at increasing the consumption of pet products by each family.

This proposal can be implemented in several ways:

• general reduction in the price of the entire batch (X rubles for Y cans of canned food);
• one jar per package – free;
• general reduction in packaging prices.

Combined sales apply to pet products that complement each other, but each individually is not an essential component of the other. The price of the set is set below the sum of the prices of each of the pet products.

Crediting the price of an old pet product when purchasing a new one is mainly used when selling expensive machinery and equipment that do not have a high turnover rate. When purchasing a new pet product, the consumer receives a certain benefit, because he loses the old pet product and at the same time receives a discount.

Couponage is that the consumer is offered a coupon entitling them to receive a discount on the price. Coupons are either placed on pet product packaging, delivered to your home, or distributed through the press. The discount is provided in the form of a certain amount of money, a percentage of the price of a pet product, or a reduction in the price of another pet product, subject to the purchase of the pet product specified in the coupon.

Price promotion methods must be significant

Research shows that pricing methods of sales promotion must be significant so that advertising messages can be based on them, and attractive enough to induce the consumer to purchase.

Read the article Economic aspects of implementing category management in the pet business

Non-price methods of sales promotion play an important role in the formation of long-term mutually beneficial relationships between consumers and producers. The following types of non-price methods of sales promotion are distinguished: in-kind incentives, active supply and service incentives.

In-kind promotion is an offer to the consumer of an additional quantity of a pet product, regardless of price. There are two ways to stimulate in kind: premiums (encouraging the consumer to purchase a product by giving him a gift) and samples (free transfer of pet products in quantity, has no commercial value and is used only for evaluating the product).

An active offer is all types of incentives that require the active and selective participation of the consumer. There are two ways to stimulate the consumer thanks to active offers: competitions (requiring observation, intelligence or knowledge from the consumer, they do not rely on the game of chance) and lotteries and games (you can take part in them, and without purchasing purchases, they are fully or partially built on the game of chance).

Service incentives are also of great importance (free repairs and delivery of goods, packaging and packing of pet products to order creates convenience for the consumer, and, accordingly, his loyalty to a certain TM).

Sales promotion, both price and non-price, has become an important component of the marketing communications mix of many domestic and global companies, and it will continue to grow as an alternative or addition to advertising. Today, the domestic consumer is not yet overloaded with sales promotion measures and remains open to such contacts.

vote

Article Rating

Types of incentives

There are three main types. We will consider and characterize each of them.

1. General.

Used at points of sale. This is a tool that is used to generally revitalize trade.

2. Selective.

With this incentive, the product is placed in a more advantageous position than other products. For example, on a separate rack or at the beginning of a row of products.

3. Individual.

This type of incentive is usually a manufacturer initiative. Advertising posters, signs are placed, promotions are held, and so on.

What is the purpose of sales promotion?

All goals can be divided into several main categories.

Strategic nature:

• Increasing the number of buyers of goods or products;
• Achievement of planned sales targets;
• Increase in trade turnover;
• Increasing the number of goods purchased by each consumer.

One-time use:

• Support of advertising campaigns;
• Making a profit from an event.

Specific character:

• Establish regular sales of seasonal goods;
• Get rid of products that are illiquid or stale;
• Increase the turnover of a specific product;
• Put up a barrier to emerging competitors.

Incentive objects

The objects of stimulation are:

• Sellers;
• Intermediaries;
• Consumers.

Consumer-facing incentives have the following goals: to increase the number of people buying a product, and to ensure that the same buyer purchases more products.

Intermediaries are the link between those who produced the product and those who buy it. In this case, the stimulation has other goals: increasing its interest in selling goods, making the product recognizable, and so on.

When the incentive is directed to the seller, then what is taken into account is how successfully and skillfully the seller sells the product. Moreover, encouraging the seller and developing such qualities is always in the interests of the company.

Sales promotion at the enterprise in the marketing mix

Sales activities at any enterprise play a very important role, since the rational organization of the sale of goods helps to accelerate the turnover of working capital, reduce distribution costs and increase the efficiency of trade, consequently, improving the financial condition of the enterprise. The organization of sales activities of an enterprise means its own system of sales bodies, as well as independent agents or enterprises not related to it that are involved in the sale of its goods. From this point of view, the complex of external relationships can be considered as a continuation of the enterprise’s own sales bodies. The elements that make up distribution channels must not only be selected, but also their relationships with suppliers and among themselves must be managed. External marketing staff should be informed and trained; measures must be taken to stimulate its business activity and compensate for services. His work must be constantly monitored and directed. The sales service is engaged in studying current and future demand for goods, organizing advertising of products, providing them at wholesale fairs, drawing up supply contracts, developing plans for selling products, receiving them, storing and accounting in sales warehouses, packaging and shipping products to consumers, accounting and control of implementation implementation plans. An important area of ​​work is studying, together with other departments of the enterprise, the causes of complaints, developing measures to improve the range of goods, as well as measures to improve the quality and efficiency of sales activities. Sales organization must be carried out in accordance with the entire complex of market factors of the enterprise's activities. Without this accounting, the sales system comes into conflict with the marketing strategy.

A distribution channel is the path along which goods move from producers to consumers. It eliminates long-standing gaps in time, place and ownership that separate goods and services from those who would use them. In other words, a distribution channel can be defined as a set of independent legal entities or individuals participating in the process of movement of goods from producer to consumer. These intermediate substances of commodity circulation are called intermediaries.

For most markets, the physical and/or psychological distance between manufacturers and end users is such that effectively matching supply and demand requires intermediaries. The need for a sales network is due to the fact that the manufacturer is unable to assume all the responsibilities and functions arising from the requirements of free exchange in accordance with the expectations of potential consumers. Turning to intermediaries means firms lose control over certain elements of the commercialization process.

Therefore, for a company, the choice of a sales network (distribution channels) is a strategic decision that must be compatible not only with the expectations of the target segment, but also with its own goals.

A distribution network can be defined as a structure formed by partners participating in a process of competitive exchange for the purpose of making goods and services available to individual consumers or industrial users. These partners are manufacturers, resellers and end users - buyers. Any sales channel performs a certain set of functions necessary for the exchange [5, p.80].

Sales functions:

studying the results of market segmentation and advertising planning;

concluding agreements with consumers or intermediaries;

accounting and control of contract implementation;

developing a plan for shipping goods to customers;

determination of distribution channels;

organizing the reception, storage, packaging, sorting and shipment of goods to customers;

information, resource and technical support for the sale of goods;

sales promotion;

establishing consumer feedback and regulation.

Sales promotion is characterized by the use of incentives and rewards that can cause consumers to buy a product immediately rather than later. While advertising is a long-term tool for building market attitudes towards a brand, sales promotion is a short-term tool used to get the buyer to take action.

It's no surprise that brand managers are increasingly relying on sales promotion, especially when they are falling behind in sales performance. It produces faster results and faster sales response than advertising. These days the proportion between advertising and sales promotion may be 30 to 70, the reverse of what it used to be.

The rise in sales promotion reflects that the company's top priority is making immediate sales rather than long-term brand building. This is a return to transactional marketing rather than relationship marketing. [4, p. 12]

Despite the fact that there are only two main classification characteristics (the basis of the organization of the system and the number of intermediaries), the relationship between the manufacturing company, resellers and end consumers can take on many types and forms. The most active role in these relations belongs to the manufacturing company, which, when choosing a distribution system, primarily takes into account the risk factor of product distribution, and also evaluates sales costs and profits.

The direct sales system involves the direct sale of products to the end consumer. Accordingly, they are connected by a direct sales channel. Its distinctive feature is the ability for the manufacturing company to control the path of the product to the final consumer, as well as the conditions for its sale. However, in this case, the company incurs significant non-production costs due to the need to create expensive inventory, and spends a large amount of resources on the function of directly bringing (selling) the goods to the end consumer, while assuming all the commercial risks of product distribution. At the same time, from the position of the manufacturing company, the advantage of this form of sales is its right to the maximum amount of profit that can be earned from the sale of manufactured products (services). The commercial benefit of a direct sales channel is enhanced by the opportunity to directly study the market for one’s goods, maintain close relationships with consumers, conduct research to improve the quality of goods, and influence the speed of sales in order to reduce the additional need for working capital.

Direct sales are carried out using the following belonging to the manufacturer:

-regional sales branches with a staff of qualified specialists who know the local market, competitors, and are able to offer conditions for the sale of goods and services that meet the needs of consumers;

-sales offices or services without creating inventories and performing the functions of concluding deals “to order”, studying the market and maintaining contacts with consumers;

-special agencies with or without the right to conclude transactions, whose functional responsibilities, among others, include demonstrating the goods to the client;

-retail network (kiosks, shops, salons, etc.).

The use of the media and personal contacts between the owner of the manufacturing company and the end consumer is also envisaged.

The company distributes goods through distribution (sales) channels. A distribution channel is a system that ensures the delivery of goods to points of sale. In the case when the system provides for the participation of resellers in sales and the difference between the manufacturer and the final consumer is mediated, such a connection is called an indirect channel. Such channels are built on the use of the experience of intermediaries and various forms of cooperation with the trading network. Here, the company shifts a significant part of sales costs and a corresponding share of risk to formally independent counterparties, reducing control over the flow of goods, and, as a result, cedes part of the commercial benefits to them. There are also mixed channels that combine the features of the first two channels of product distribution

When organizing an indirect sales channel, there is a need to determine its length and width. The channel length is the number of channel levels, that is, single-function intermediaries, and the channel width is the number of intermediaries conditionally located at the same level.

Depending on the number of intermediaries at each channel level, sales can be intensively selective or exclusive.

It is obvious that as a product moves through distribution channels with the participation of intermediaries, its physical movement may be accompanied by a transfer of ownership rights. In this case, the completeness of the rights to the goods transferred to the intermediary, the form of transfer, the degree of his responsibility and risk are different. Accordingly, intermediaries are classified, and the channels with their participation acquire a complex structure.

Sales promotion can be addressed to retailers, consumers and sales personnel. Retailers will work harder if they can use discounts below list price, advertising, display discounts, and free merchandise giveaways. Consumers are more likely to buy when they are offered coupons, discounts, special prices, bonuses, loyalty gifts, sweepstakes entries, product demonstrations and guarantees. Sales staff work more energetically if they are competing for a prize for best performance.

Since there are so many different sales promotion tools available, marketers need experience to know which ones to use. Some large companies have a sales promotion specialist who provides advice to brand managers. Or the company can use the services of a special sales promotion agency. The main condition is not only to use stimulation, but also to view and record the results; the company must constantly improve in sales promotion.

Although sales promotion most often increases sales, many companies lose money by doing so. One analyst determined that only 17% of sales promotion campaigns were profitable. These are cases where sales promotion was targeted at new customers: they were given samples of the product, and they liked it more than the products of the brands they previously bought.

The sales system can be considered at different levels: commodity producer (micro level), region or industry, agricultural sector of the national economy.

Analysis of the sales system allows us to identify the following main functions: exchange, physical, support.

The exchange functions include purchasing and selling; to physical - storage, transportation, part-time processing and processing of products; providing - standardization, financing, risk assumption, sales forecast.

The functions of cooperative marketing of peasant farms were once examined in detail by A. V. Chayanov. Its classification includes: receipt of goods; its examination and assessment; pledge and issuance of loans; sorting; processing, packaging; formation of trading parties; calculation of sales prices; storage; cooperative marketing combined with processing; offering goods to customers; transactions; settlement with customers; settlement with peasants; audit, instructor and agronomic work in sales cooperation, etc.

Organizational and managerial analysis allows us to describe the functions of agents, organizations, and business structures that carry out sales. The following intermediaries are identified who perform marketing functions for agricultural producers.

1. Resellers: retailers and wholesalers.

2. Agency intermediaries: brokers, commission agents.

3. Exchange intermediaries.

4. Processors and manufacturers.

5. Providing organizations (trade associations, exchanges, etc.).

The efficiency of marketing agricultural products determines the extent to which agriculture is integrated into the social division of labor. All other things being equal, the organization of the sales sector also determines what producer and consumer prices are formed for a given supply and given demand for agricultural goods. In developed countries, the sales of food products is highly developed and regulated by market laws.

The development of specialization and the introduction of new production technologies lead to several trends in the marketing of products:

— the need for transportation, storage and deep processing is increasing; distribution costs account for an increasingly larger portion of the final selling price of a product;

- concentration of production leads, on the one hand, to an increase in its volumes (quantity of products) and to a decrease in the price per unit of production, and on the other hand, to a distance of production from places of consumption, which increases costs associated with sales;

— the harmful impact on nature and the environment is increasing.

Thus, sales promotion works less well in product markets with a high degree of brand similarity. It tends to attract those looking for low prices or gifts, or those who were not loyal to any brand. It is better to use sales promotion in product markets with a high degree of product differentiation, where consumers can understand that they actually like the product and its features more than what they bought before.

Sales promotions tend to be used by weaker brands. They do not have significant funds for advertising; and with incentives they can at least give people the opportunity to try their product without great expense.

Price methods of sales promotion

The essence of this technique is to attract a potential buyer with a reduced price for the company's goods or products. It is advisable to use it at times when buyer interest in goods is quite low.

This technique does not require any preparation, and the profit brings good results. The main thing here is that the process is organized correctly.

Stimulating sales levels using this method is a short-term phenomenon, and an excellent alternative to various advertising.

What is included in the list of such methods:

• Providing discounts on goods;
• Promotion “2 for the price of 1” and similar;
• Reducing the cost of an item, plus a discount on the next one;
• Providing gift and discount plastic cards;
• Refund of part of the funds after payment for the goods.

Let us immediately note that all manipulations associated with reducing prices for goods are pricing methods.

Let's look at them in more detail.

Providing discounts.

Everyone knows that buyers are most attracted to various discounts. They can be seasonal, wholesale or holiday, the essence does not change. Even if a discount is provided for a product that has been on the shelf of your store for a long time, there will definitely be a buyer.

Refund of part of the money.

As soon as the buyer pays for the goods, a small part of the amount is returned to him again and is a kind of compensation for the costs incurred. By the way, this technique is often practiced by large retail chains of household appliances and electronics, cosmetics and perfume stores, and so on.

Providing gift and discount plastic cards.

It is also a practically ubiquitous technique. It is used not only by retail chains and shops, but also by beauty salons, fitness centers, and even some taxi services.

If the card is a discount card, then the buyer will constantly receive a discount in a specific store or hairdresser. If it is a gift, then he will be able to use it when paying for his next purchase, or maybe give it to someone else.

Issuance of coupons.

For example, a buyer purchases washing powder and is given a coupon at the checkout, using which he can purchase another product at a lower cost.

Sales promotion goals

Sales promotion (in English - sales promotion) is a way to increase sales for both wholesalers and retail buyers. And we are not talking about advertising: sales promotion is being introduced into work precisely in those cases when advertising does not help.

Typically, sales promotion is used when a manufacturer releases a new product and wants to promote it to the market. Advertising is advertising, but in addition to the information that it conveys to the buyer, it is also necessary to make sure that it sells with a bang. Another case in which such a measure is used is a decreased demand for a product that has lost its popularity.

There are several methods of sales promotion:

• Impact on retail (push method). The idea is to convince retail customers to purchase a particular product from wholesalers.
• Impact on the end consumer (pull method). The purpose of this method is to convey information to the average buyer for the purpose of purchasing a product. For this purpose, promotions and guaranteed bonuses are used. promotion, etc.
• Complex impact. This is the use of the two above methods simultaneously, starting from the manufacturer and ending with successful sales in retail outlets.

Disadvantages of pricing methods

Along with the positive effect that the use of these methods brings, there is also a negative one. We will not ignore it, but analyze it.

The most common mistakes made by sellers are:

• Promotions are held too often . It turns out that on other days the buyer considers prices unreasonably high;
• Large discounts . Not all people consider discounts a good thing. There are buyers who are sure: the larger the discount, the worse the product;
• They reduce the price at their own loss . A very risky policy. If you just want to increase the flow of customers, don't use it. Such actions may result in an outflow of funds from the company.

Sales promotion in retail chains: a new paradigm for achieving payback

Alexey Pismarov, Managing Partner, Business Management Technology

When we talk about sales promotion in retail chains, it is necessary to define fundamental positions.

Sales promotion is a form of marketing communications, the purpose of which is to promote growth in the volume of sales of goods.

Sales promotion goals:

• stimulating (trial) purchases and, as a result, increasing sales volume
• initiation of consumer acquaintance with the product (sometimes: consumer training)
• building consumer loyalty to the product
• building/strengthening brand image

Advantages

• An effective means of changing behavior in a short time
• Flexibility

Flaws

• Often used incorrectly
• May lead to competitive wars
• Easy to copy

Online sales promotion is nothing but a way to increase sales for a supplier. This is often the only way a supplier can influence their online sales.

Today is a fundamentally new era, a new era, a new stage in the development of the FMCG market, in which the retailer, in this case the chain, does not undertake obligations to sell a particular product. In fact, the network just rents out its cash terminals, its salespeople, its premises, and its brand. And responsibility for sales volume lies entirely with the product supplier, distributor, exclusive distributor, manufacturer, in other words, the vendor.

If yesterday it was possible to negotiate with a retail store about sharing the costs of sales promotion, explaining that this is beneficial to him first of all, that his image improves, the value of his brand grows, more customers come to him, and due to this it was possible demand certain preferences, then today the situation has changed dramatically.

Therefore, the full cycle of sales promotion campaigns in retail chains must be managed by the supplier. Even if you, dear suppliers, are not given the opportunity to influence sales promotion to the extent that you want, your task, in any case, is to exercise this control influence as much as possible.

So, the fundamental positions are:

A network is a landlord who presents shelves for a fee, provides cashiers, and provides merchandisers (in some places it provides, in others it is allowed to supply its own merchandisers) so that the supplier has the opportunity to promote its product through a channel such as a retail network.

You are a tenant. Therefore, the supplier's task is to make the most of the provided space and maximize utility.

What is needed for this? Paradoxically, the supplier needs to do the work that retail stores could previously do very well.

Unfortunately, our country has “jumped over” the stage of maturity of non-chain retail trade. If in the West chain stores appeared as a result of the natural development of efficient retail stores, then in our country chain stores arose as a result of the seizure of ineffective retail space. If in the West this path was evolutionary, then in our country it is, as always, a revolutionary path.

Therefore, in the vast majority of cases, high-quality work by the retailer to prepare sales promotion campaigns in our country, unfortunately, is not observed.

Main stages of sales promotion

The first stage is the learning stage.

Firstly, it is necessary to collect marketing information about the product that the supplier should have: what target groups of consumers is the product aimed at, what is its positioning relative to competitors, what associations does it evoke among target consumers, what are the selection criteria when purchasing from these end consumers .

After this, you need to figure out what the real audience is represented in the selected chain store, what the target group of this store itself is. It is obvious that, for example, in the “Seventh Continent” on the street. Neverovsky near the Park Pobedy metro station and in the Pyaterochka store, located in Mnevniki, in a residential area, we will conduct fundamentally different sales promotion campaigns. Why? Because different audiences, target groups of consumers representing this or that product are filled differently, present differently in this or that retail store.

Therefore, the first thing that needs to be done is to compare the target groups to which the product is aimed with the masses of visitors who are present in this store. By and large, you need to promote those products and those promotions that will be perceived not only by the target group at which the product is aimed, but will be perceived by the masses of visitors coming to the store. Some target group, as understood by the supplier, will be more represented in a particular store, and some will be less numerous.

Thus, the first stage is the stage of analysis of the target group that is present in the store.

Let's be honest, in 80% of cases you have to do separate consumer segmentation by store. Because there is often a heterogeneous alloy, therefore, it is necessary to distinguish either smaller or more general groups that are similar in terms of purchase selection criteria and product ranges.

If the target groups are too small, it makes no sense to carry out a sales promotion campaign, because it simply will not pay for itself. It is necessary to build a larger set of target groups, define more general criteria, and hit a larger audience.

If the audience, on the contrary, is too large, then, accordingly, it can be differentiated and analytically cut. For example, it is worth focusing not just on the wealthy part of the population who arrive by car, but separately positioning the product for housewives, separately positioning the product for men who earn money, etc., etc., etc.

Thus, the second thing that needs to be done after the segment, target groups, and masses of store visitors have been analyzed is to target the product at the newly created target group. In other words, you need to not only analyze, you need to create the target group for which the action will be formed.

As mentioned above, if the representation of typical target consumer groups is too low, it is necessary to enlarge these groups and find common associations. If the filling of the groups is too high, then for a more targeted impact, a deeper impact, it is necessary to differentiate according to the selection criteria when purchasing.

Once the optimal group size has been determined, you can move on to the actual technique for carrying out this action.

Before starting a project, you need to ask yourself a few questions:

1. Why do you want to run a promotion?
2. What result do you want to achieve? Is it possible to achieve this result by spending fewer resources?
3. What target audience is your planned promotion addressed to?
4. How much do you plan/have the opportunity to spend on the promotion? The answers to these simple questions will allow you to determine the criteria for the effectiveness and success of the project; scope and mechanics of the project.

One of the most important steps in deciding whether to run a sales promotion is calculating the promotion's budget. As an example, consider the following situation:

Situation 1

Trading company XXX, which sells inexpensive shoes of average quality, has set itself the goal of increasing the sales level of the Cinderella store, owned by this company in August 2005, by 25%.

The company believes that the best way to achieve its intended goal is to conduct a promotion.

It is required to calculate the optimal budget level for the promotion.

Situation 1-2

Initial data:

P = $30 Q1 = 1000 (pcs.) M = 20%

Solution:

P1 = Q1 × P × M = 30 × 1000 × 20% = $6000 Q2 = Q1 × 25% = 1250 P2 = Q2 × P × M = 30 × 1250 × 20% = $7500 A = P2 – P1 = 7500 – 6000 = $1500

Designations:

P - unit price M - profit margin Q1 - sales volume per month before the promotion P1 - profit amount before the promotion Q2 - sales volume per month after the promotion P2 - profit volume after the promotion A - maximum budget for the promotion

Situation 1-3

Company XXX decided to expand the goals of the promotion: now they expect an increase in sales of the Cinderella store by 25% during the promotion of 10% over the next 11 months.

Solution:

2. P1 = P × Q1 × M × 12 = 30 × 1000 × 20% × 12 = $72,000

(annual profit without promotion)

P2 = P × [Q1 × 125%] × M + P × [Q1 × 110%] × M × 11 =

= 30 × [1000 × 125%]× 20%+ 30 ×[1000 × 110%] × 20% × 11= = $80 100

A = P2 - P1 = 80100 - 72000 = $8100

Conventionally, the organization of a promotion can be divided into 4 stages:

Stage 1. Deciding on the behavior of the promotion. Stage 2. Preparation of a promotion. Stage 3. Directly carrying out the promotion. Stage 4. Closing and evaluation of the result.

Stage 1. Deciding on the behavior of the promotion

The mechanism for making a decision to conduct a promotion can be schematically depicted as follows:

Before we start planning a promotion, it is necessary to draw up a technical specification, or Brief.

Possible brief parameters:

1. Agency name, customer name, brand name, project name.
2. Type of promotion: consumer promotion
3. Description of the brand
4. The target audience
5. Current situation/Background
6. Action goals
7. Proposed strategy
8. Proposed venues for the promotion and their quantities
9. Average sales per week in the proposed promotion locations: last year at the same time, a month ago, based on the results of the last promotion
10. Regions and dates
11. Additional Information
12. Budget
13. Agency objectives

• Propose an idea for an action
• Develop the mechanics of the promotion
• Develop a schedule for the event
• Create an address program
• Recruit and train personnel for the event
• Develop a logistics scheme for the implementation of the campaign
• Develop the design and types of POS materials for the promotion
• Suggest types of prizes for the prize fund, their branding,
• quantity and production estimate
• Offer a detailed estimate
• Propose a scheme for calculating the effectiveness of the results of the planned action

• Restrictions
• Deadlines for submitting proposals
• Deadline for announcing the decision.

Each company determines for itself whether to carry out the project on its own or involve third-party organizations for this. Let's highlight the main pros and cons of hiring a contractor:

Carrying out a promotion	On your own	Engaging a contractor
Advantages	Full control over the project and financial costs in particular	Significant savings in labor and business resources Obtaining external advice
Flaws	Large costs of labor and entrepreneurial resources Lack of experience and connections	Partial control over the project Often increased financial costs

Very often the manager is faced with the question: How to choose a contractor? You can rely on your own experience of working with a contractor company, recommendations of competent persons, the reputation of potential contractor companies in the market and, of course, the tender.

The tender allows you to select the most suitable partner for a promotion in terms of the quality of project execution, minimizing financial costs, and achieving your goals.

When choosing a contractor, it is necessary to conduct a comparative analysis of the preliminary budget of the action. As an example, consider the following situation:

Situation 2

The company decided to conduct a promotion in order to familiarize the target audience (women housewives aged 28-45 with an income level of at least average) with its new product - a new cleaner for stoves and tiles containing a patented substance XXX, unique in its properties and greatly facilitates the cleaning process. It was decided that the promotion would be presentations with a visual demonstration of the product in stores. It was calculated that to achieve the desired business result it is necessary to reach at least 150,000 representatives of the target audience. Promotion budget - up to $30 000.

• Proposals from potential contractors:
• Advertising agency Alpha - $23,750
• Omega advertising agency - $27,800
• Δ = $4050

Alpha	Omega
Budget	23 750	27 800
Number of outlets covered	125	120
Number of product presentations	17 500	25 200
Reaching the target audience (based on the presence of 10 people per presentation)	175 000	252 000
Price per 1 outlet	190	230
Price for 1st presentation	1,4	1,1
Price for 1st contact	0,14	0,11

Stage 2. Preparation of the promotion

The second stage of organizing a promotion, the process of its preparation can be roughly depicted as follows:

Naturally, we all want to reduce costs without losing quality. How to reduce the size of the preliminary budget? The answer is simple. It is worth paying attention to:

Production

• Are the prices for producing materials optimal for a given circulation and quality?
• Is the set of materials optimal? What function does each type of material serve? Is it possible to refuse the production of certain types of materials? Replace with a cheaper one?
• Is it possible to reduce the quality level of materials?
• Is the production volume of materials optimal?

Logistics

• Are there alternative methods of delivering materials?
• Are there alternative ways to store materials?
• Is the number of warehouses involved and storage periods optimal?

Staff

• What are the functions of different types of personnel? Is it possible to redistribute staff functions to achieve maximum efficiency?
• What are the personnel requirements?
• Is the number of staff hired optimal?
• Is the cost of staff training optimal? Are there alternative ways to conduct training?
• Is the amount of time and resources (room rental, trainers) optimal for conducting the training?

Agent commission

• What percentage of the total cost of the promotion is the agency commission?
• How many managers are involved on the agency side? What are their functions and distribution of responsibilities? Is their number and their % of time allocated to this project optimal?

Stage 3. Direct promotion

At the third stage, during the actual promotion, it is necessary!!! control the situation, since problems mainly arise due to poor quality of project execution, when, for example, there are two trade marketers or two irresponsible merchandisers on site who are not actually at this point, having just agreed with the merchandiser that they will be there . Naturally, in the end we get disastrous results. An example of a control mechanism is shown in the following diagram:

Control of the promotion

Stage 4. Closing and evaluation of the result

The obligatory and final stage of the action is the analysis of the results, summing up, drawing conclusions and recommendations:

The main conclusion: it is the supplier who organizes the promotion, it is you who must understand that, in the end, not a single store will provide you with worthy help, worthy support, it is only your responsibility, your product, your money...

How effective are pricing methods?

To understand how appropriate measures to reduce prices are, you need to analyze several important points:

• Discount percentage . It should be such that the buyer feels it. If you set a 0.5% discount on phones costing 70,000 rubles, it’s unlikely that buyers will line up for you;
• When should the price be reduced ? If you want to sell a seasonal product, or one that has been on the shelf for a long time, set discounts at a time when there are very few buyers;
• What result will you get ? A global decline in prices can cause distrust among buyers, and therefore an outflow of profits.
• Increasing the % discount on goods with a large markup . If you initially paid a large premium for safety, you can reduce the price by a significant percentage. You will remain in the black.

How effective are the methods?

Every company should know how effective price or non-price methods of attracting customers will be. To achieve this, various factors are assessed:

• what kind of size discount is provided, so it is important to focus on discounts ranging from 20 to 50 percent, since a slight reduction in price will not be attractive to buyers;
• in what period of time the cost of goods decreases, since if you need to sell stale goods during the off-season, then discounts must be applied if there are a large number of buyers;
• it is assessed what kind of result will be obtained from using this or that method, since if the price is reduced too much, this can lead not only to an increase in the number of buyers, but also to a significant decrease in profits;
• discounts are established only on goods that have a high markup, so that the company does not operate at a loss;
• if gifts are used as incentives, they should not be too expensive, but at the same time act as an alternative to discounts;
• Often, various lotteries and drawings are used as a non-price method, but the prizes should be directly related to the work of the organization.

The calculation of efficiency should be carried out by the company's economists, who estimate how much money was spent on the implementation of certain activities, after which they compare these expenses with the profit received during the action.

If any method does not bring the desired result, then you should not continue to use it, since it is advisable to slightly change the strategy in order to improve performance results.

Non-price methods of stimulating product sales

If you attract the attention of buyers to your product without resorting to price manipulation, then the methods you use are non-price.

The use of such methods necessarily involves a psychological factor. The buyer receives a nice gift from the seller, which means that next time he will most likely come to this seller for shopping.

The list of these methods includes:

• Tastings of various products;
• Issuance of various gifts and souvenirs, complementary goods
• Conducting competitions and lotteries;
• Issuance of credit cards;
• Issuance of free trial samples.

Product tastings.

Such events are often organized and held in supermarkets. For example, just a few months ago, the Lenta hypermarket chain held a tasting of Syrobogatov brand cheeses. Everyone could try the products and choose something for themselves.

Issuance of gifts and souvenirs, complementary goods.

Everything is simple here: when purchasing a mobile phone, you receive headphones as a gift. It is important that the gift relates to both the product and the brand. Otherwise, it will not remind you of the brand.

Conducting competitions and lotteries.

A well-known brand of alcoholic drinks held the following lottery: for the purchase of a certain number of drinks of this brand, a silver bar was awarded, and the amount of 200 rubles was credited to a mobile phone account as a consolation prize. That is, if you don’t win the bullion, you will definitely receive money into your mobile account.

When holding such events, you also need to take into account some important nuances: the buyer must see that the prize is real, the established rules of the competition must be extremely simple and not contradict each other.

Issuance of credit cards.

Credit coupons are a transitional link between price and non-price methods. These coupons allow you to exchange them for certain goods. This is practiced by a large chain of hypermarkets, for example: last year a certain number of coupons could be exchanged for expensive tableware of a well-known brand.

Issuance of free trial samples.

This method helps stimulate the potential buyer.

Samples are distributed in different ways:

• Placed in packaging with other products;
• Sent by mail;
• In various magazines they are attached to pages and so on.

This technique is used by sellers of household goods, offering customers packaging in which the product can be placed after it has already run out.

Example. Cleaning product for cleaning mirrors is sold in different types of bottles. A spray bottle is more expensive, while a regular bottle is cheaper.

Now here are some recommendations for selling products in a short time. We hope they will be useful to our readers.

The essence of sales promotion and methods of its implementation

Definition 1
Sales promotion is a set of marketing activities and trade management related to the promotion of goods and services along the entire route of the sales channel, starting from the manufacturer through sales channels to the consumer.

The fundamental goal of sales promotion is to accelerate sales of products sold by the company. Lower-order goals are determined by the direction of stimulation (Figure 1).

Figure 1. Basic directions of sales promotion. Author24 - online exchange of student work

The basic goal of stimulating buyers is to accelerate the process of their making a positive consumer decision to purchase a particular product (service) of the company. Stimulating the company's sales personnel is primarily focused on intensifying the sales process. The main goal of stimulating resellers is to help trade organizations in further sales and increase the speed of sales of goods and services.

Finished works on a similar topic

• Course work Methods of sales promotion 430 rub.
• Abstract Sales promotion methods 280 rub.
• Test work Sales promotion methods 240 rub.

Receive completed work or specialist advice on your educational project Find out the cost

The basis of sales promotion is the use of certain stimulation methods, that is, methods by which the achievement of the above described goals is ensured. The main methods of sales promotion include:

• product samples;
• exposition and demonstration of goods at points of sale;
• coupons;
• method of monetary compensation (discounts)
• goods at a discounted price (markdown);
• bonus;
• providing a guarantee;
• souvenirs;
• competitions and lotteries;
• free membership to the club;
• attracting a “client-friend”, etc.

Each company independently decides on the use of certain methods of sales promotion. The entire set of methods described above lends itself to a certain typology. Let's look at it in more detail.

Useful tips

1. On the price tag, indicate the price without a discount, but attach a sticker indicating its percentage;
2. Indicate two prices in the price tag: old and new. The client clearly sees the benefit, and you encourage him to buy the product;
3. Set discounts on the third and subsequent items on a receipt: this will increase the cost of the average receipt;
4. Form goods into sets: a great way to sell illicit goods;
5. Set discounts on goods at specific times of the day: for example, in the morning and afternoon;
6. Offer additional services that motivate customers: long product warranty, free service, free home delivery, and so on.

Using these options helps the seller get rid of a whole range of problems with selling goods.

Sales promotion. Advantages and disadvantages of basic methods

But sales promotion is not limited to this element alone. If you have chosen the segment in which your company will operate and identified the target market, then you also have to determine those techniques and sets of measures for working with resellers and consumers to stimulate their interest in selling your products.

In general, sales promotion (providing various types of benefits and discounts) includes the following methods:

Providing free product samples. Free demonstration and opportunity to test (operate, use) the product. Direct distribution of information leaflets offering benefits and discounts by sales agents. Distribution of information materials and offers of discounts and benefits by mail. Distribution of information materials and offers of discounts and benefits through newspapers. Distribution of information materials and offers of discounts and benefits through specialized magazines and their supplements. Money back guarantee announcements. Supply of purchases with small gifts. Formation of a package of several products at a discount. Organization of competitions and lotteries for potential consumers. Demonstration of goods at the point of sale.

If you have made a selection of advertising means, then the question immediately arises before you: how to combine advertising with other elements of promoting the product on the market? The main thing here is concern for the corporate style, the image of the enterprise or company, the form in which the enterprise and its products will appear to customers, what image and emotional attitude consumers will have regarding the company’s trademark. This depends not only on the quality of the product itself, but also on the memorable design or business style unique to this company. That is why it is desirable that all elements of advertising and promotional activities for a product on the market have a common concept in the field of design and design, so that the product design, trademark, logo, style of advertising message and presentations are, if possible, unified and recognizable. That's why:

1. Pay attention to the appearance of your business. It must correspond to the spirit of advertising, the image that is to be formed or maintained.

2. There is no need to get carried away with individual forms and methods of advertising or measures to promote a product on the market. The main thing is that they have some kind of single, unifying idea.

3. Having determined the main idea (concept) of the image, it is necessary to strictly follow it in advertising and promoting the product on the market. You can change individual advertising solutions, but not to the detriment of the overall idea. People need to get used to your company's image. The table shows the advantages and disadvantages of the main methods of promoting a product on the market.

Assessing the advantages and disadvantages of advertising marketing methods for sales promotion

When communicating with a dealer or reseller, the “language of money” continues to be the most understandable and accessible. In other words, it is important to economically interest the dealer in selling your products, in increasing attention to the brand of your company. To do this, you need to identify opportunities to share part of your profits with them. Other methods include price concessions when order volumes increase, joint advertising, and the manufacturer’s participation in financing part of the dealer’s local advertising costs.

As for new products, the best methods of advertising marketing are to provide dealers, certain groups of consumers with the opportunity to use free of charge, demonstrate the product, its capabilities, provide incentives and discounts on the price in case of using certain sources of advertising, information messages (coupons, discount notice sheets, guaranteed refund in case of customer dissatisfaction, lifetime warranty on the product, etc.).

In case of promotion of previously produced products on the market, the attention of consumers can be attracted by providing discounts on a new model (modification) of the product to those who purchased a previously produced model. The terms of settlements with dealers may also be important. For example, extending the terms and increasing the size of trade credit to a dealer can stimulate sales growth. However, when providing products for sale, the price in inflation conditions should be higher than with prepayment.

Many foreign manufacturers rely on two-stage marketing, when dealers or the entire sales network are involved in promoting the product on the market and in the advertising campaign. With this approach, part of the product marketing effort is entrusted to the reseller. But finding the right dealer is not easy. One type of two-stage marketing is a system of pre-announced return of part of the money to consumers under certain conditions.

The task of marketing is precisely to select such a display of the product in front of potential buyers, which, on the one hand, will best confirm all its advantages that were discussed in the advertisement, and on the other hand, will make it accessible and therefore more desirable for consumer. Some of the basic guidelines to follow when serving your products directly to the consumer and to negotiate with retailers include:

the display should always complement the product itself, first of all, demonstrate to the buyer its practical application as clearly as possible; the product must immediately attract attention, be something attractive among many other products. The form in which the product is presented must necessarily evoke a positive reaction from the consumer. Artificial, fantastic calls and motivations that are offensive from the point of view of the rules of good manners are unacceptable; the display should emphasize the unique, specific properties of the product, its inimitable features and advantages in comparison with analogues. If, for example, a distinctive feature of your company’s product is lower weight, then this should be somehow emphasized when placing the product in front of the consumer; the information supplied with the product laid out in front of the consumer must be as accessible as possible for the consumer to understand. If it is too verbose, you can be sure that most buyers will not pay attention to it; The product offered to the consumer should be as accessible as possible. The consumer must be able to pick it up or touch it, and examine it carefully; It is best to take care of the form in which the product will be presented to the consumer in advance; the manufacturer and the seller will work on how your products should be laid out in front of customers. The ability to stand out also requires an appropriate approach to developing packaging for your products.

Another two-step marketing option is to use a brand or coupon system. With their help, the consumer can receive a certain discount in case of repeated purchase of the same product or some bonus or gift of another kind. Buyers present these coupons to retailers, who then present them to manufacturers for reimbursement. Thus, the manufacturing enterprise has the opportunity to feel the reaction of consumers to its products and receive from resellers the information necessary to develop the correct sales policy. Remember that there is no limit to improving the forms and methods of promoting products on the market. You need to take care of this constantly, since what was good and justified yesterday becomes redundant and unnecessary today.