Sales Promotions 2

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Information about Sales Promotions 2

Published on April 18, 2008

Author: stephan

Source: slideshare.net

Implementation, accountability, control, evaluation - and the legal framework of sales promotion campaigns

At the end of this session you should be able to: Estimate a budget for a campaign (esp. calculate OTA, estimate redemption) Know about a structured approach to implement a campaign Know about ASA & possible pitfalls of a campaign Know about the key legal aspects of SPCs outside the UK

At the end of this session you should be able to:

Estimate a budget for a campaign (esp. calculate OTA, estimate redemption)

Know about a structured approach to implement a campaign

Know about ASA & possible pitfalls of a campaign

Know about the key legal aspects of SPCs outside the UK

Whatever was spent last year + inflation % of turnover same as competitor amount required to meet objective same as last year - savings for cost cutting! The Budget

Whatever was spent last year + inflation

% of turnover

same as competitor

amount required to meet objective

same as last year - savings for cost cutting!

WKS Survey Most spent the same as last year (real term cut) Spending is on the same media/tools (not optimal, ignoring new ops) Value for money not a major target in ongoing campaign (but suddenly important when “change” looms)

Most spent the same as last year (real term cut)

Spending is on the same media/tools (not optimal, ignoring new ops)

Value for money not a major target in ongoing campaign (but suddenly important when “change” looms)

Budgeting The basic factors: Packs (per period) Proofs of purchase Opportunities to Apply (OTA) Redemption Rate Cost Getting it wrong is a risky business!

The basic factors:

Packs (per period)

Proofs of purchase

Opportunities to Apply (OTA)

Redemption Rate

Cost

Getting it wrong is a risky business!

Packs/period x The number of packs usually sold over the period of time that the campaign will last + adjustment for impact of campaign Campaign for 1 month 220.000 monthly volume + roughly 10% impact = roughly 250.000 packs required

The number of packs usually sold over the period of time that the campaign will last + adjustment for impact of campaign

Campaign for 1 month 220.000 monthly volume + roughly 10% impact = roughly 250.000 packs required

Proofs of Purchase How many will you ask for? Too low = regular customers have no incentive to buy more Too high = less regular customers will not participate (may be disappointed) Good rule: average level of purchase of the category (N.B.: NOT your brand!)

How many will you ask for?

Too low = regular customers have no incentive to buy more Too high = less regular customers will not participate (may be disappointed)

Good rule: average level of purchase of the category (N.B.: NOT your brand!)

OTA (Opportunity to Apply) Promotional Packs / Number of proofs, e.g. equal to a 100% redemption rate highest possible risk factor (for the insurance, you know...) OTA = 250.000 / 5 = 50.000

Promotional Packs / Number of proofs, e.g. equal to a 100% redemption rate

highest possible risk factor (for the insurance, you know...)

OTA = 250.000 / 5 = 50.000

Redemption Level A bit tricky: Attractiveness of premium Ratio proof/purchase frequency Support given to promotion (e.g. other MC) Strength of your brand Redemption Rate * OTA = Redemption Level 50,000 OTA x 0.06 (6%) RR = 3,000 RL

A bit tricky: Attractiveness of premium Ratio proof/purchase frequency Support given to promotion (e.g. other MC) Strength of your brand

Redemption Rate * OTA = Redemption Level

50,000 OTA x 0.06 (6%) RR = 3,000 RL

Cost everything.... Cost of Gift 1.10 Handling 0.90 Total Cost for Gift: 2.00 x RL (3,000) 6,000 + Art work, printing, support 6,000 Total for campaign: 12,000

Cost/pack Total cost per pack sold: £12,000 / 250,000 packs = 4.8p/pack Is 4.8p enough to warrant the 10% increase in turn over (provided you get there!?) How many extra packs do you need to sell to break even?

Total cost per pack sold:

£12,000 / 250,000 packs = 4.8p/pack

Is 4.8p enough to warrant the 10% increase in turn over (provided you get there!?)

How many extra packs do you need to sell to break even?

NB Same principle applies for all promotions: Coupons are simply calculated as PP = 1 N.B.: for newspapers OTA = circulation (not readership!) however, higher readership = increased RL

Same principle applies for all promotions:

Coupons are simply calculated as PP = 1

N.B.: for newspapers OTA = circulation (not readership!) however, higher readership = increased RL

Timing When is impact needed? How long will promotion last? What is the relation to the purchase frequency of your product/service intermediary lead times required print/merchandise delivery

When is impact needed?

How long will promotion last?

What is the relation to the purchase frequency of your product/service

intermediary lead times required

print/merchandise delivery

Communication On pack (e.g.: wrapping) Leaflet in/with the product Separate leaflet Adverts to support campaign Sponsored shows / events Posters, stickers, other support material Sales aids Mailshots

On pack (e.g.: wrapping)

Leaflet in/with the product

Separate leaflet

Adverts to support campaign

Sponsored shows / events

Posters, stickers, other support material

Sales aids

Mailshots

KISS! Keep concepts simple and convincing: Win a free meal! Itsu salmon in a rushdie spectacular! Use help: ISP/DMA website for wordings etc, Royal Mail for mailing etc.

Keep concepts simple and convincing: Win a free meal! Itsu salmon in a rushdie spectacular!

Use help: ISP/DMA website for wordings etc, Royal Mail for mailing etc.

Logistics Often underestimated,.... but it’s problematic to carry 45 “dealer loaders” in the form of a deck chair in a normal car!

Often underestimated,.... but it’s problematic to carry 45 “dealer loaders” in the form of a deck chair in a normal car!

Planning Planning is important!!!! Usually structured (SOSTAC helps)

Planning is important!!!!

Usually structured (SOSTAC helps)

Read the brief Set KPIs / Define success Think how you will get there/ Possible solutions Write outline of the campaign Write operational plan

Read the brief

Set KPIs / Define success

Think how you will get there/ Possible solutions

Write outline of the campaign

Write operational plan

Three stages to your plan: Feasibility Checking Implementation

Three stages to your plan:

Feasibility

Checking

Implementation

Brief Possible Concepts Budget Timing Communication Logistics Legal check against shortlist and check against objectives Stage 1 : Feasibility

Shortl. Concepts Budget Timing Communication Logistics Legal Outline Plans (visual and copy) check back which is best (vs. brief/objectives) Top Plan Define Success (KPI) Stage 2 : Checking

Shortl. Concepts Copy & Design Final admin Final Communication Final material Evaluat. Criteria Recheck Legalities ! detailed Operational Plan Run the Promotion Evaluate (KPI, brief)

Legal aspects Code of Advertising Practice (CAP) Advertising Standards Authority (ASA) Codes available from ISP, ASA, CAP, DMA

Code of Advertising Practice (CAP)

Advertising Standards Authority (ASA)

Codes available from ISP, ASA, CAP, DMA

Fundamentals legal, decent, honest and truthful conducted equitably, promptly and efficiently seen to deal fairly and honorably with consumers in line with accepted principles of fair competition in line with the spirit as well as the letter of the rules not bringing the industry in disrepute

legal, decent, honest and truthful

conducted equitably, promptly and efficiently

seen to deal fairly and honorably with consumers

in line with accepted principles of fair competition

in line with the spirit as well as the letter of the rules

not bringing the industry in disrepute

Subject to availability Nice sentence.... but... Demand should be estimated in advance You must have plans to meet unexpected demand You must offer an item of equivalent value if all fails All limitations and cost must be clearly stated You must dispatch goods in 30 days

Nice sentence.... but...

Demand should be estimated in advance

You must have plans to meet unexpected demand

You must offer an item of equivalent value if all fails

All limitations and cost must be clearly stated

You must dispatch goods in 30 days

Children no unfair advantage not encourage purchase of too expensive items not cause conflict between children and parents Parental permission often required!

no unfair advantage

not encourage purchase of too expensive items

not cause conflict between children and parents

Parental permission often required!

Free means FREE! Anything else than actual postage is NOT allowed no premium telephone lines no purchase can be required

Anything else than actual postage is NOT allowed

no premium telephone lines

no purchase can be required

beyond the UK In the EU: massive restrictions Currently some deadlock on legislation in the EU Roughly: Greece, Spain, Italy fairly liberal, Germany and BeNeLux very restrictive

In the EU: massive restrictions

Currently some deadlock on legislation in the EU

Roughly: Greece, Spain, Italy fairly liberal, Germany and BeNeLux very restrictive

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