Sales Promotion Week

1
Sales Promotion - Week 4Retail Sales Promotion

• Review To Whom am I Selling?
• Retail Sales Promotion
• Quiz on Chapter 3
• Present Target Profiles and Features Benefits
  to Class
• Meet one-on-one, continue working on projects

2
Understanding Consumers Demographics

• Hard data such as
• Age
• Gender
• Race
• Level of Education
• Income
• Marital status

3
Understanding Consumers Psychographics

• Emotional, stylistic, opinions
• Activities (hobbies, sports, etc.)
• Price consciousness
• Lifestyles
• Patterns of usage (how much/how often do you buy?)

4
Consumer Groups

• Catch-all groups that represent average sets of
  demographics and psychographics
• Example Young Contemporary
• Fashion emulation, not leadership
• Clothes as self-expression
• Quality not important
• Shop til they drop
• Demographics and psychographics of the Young
  Contemporary group?

5
Target Profiles Positioning Statement

• Detailed profiles of your typical consumers.
• (Sample) Natural Products Consumer
• Age 35
• Sex Female
• Household Income 80K
• Married Yes
• Typical stores Whole Foods, Trader Joes
• Status Rising
• Price conscious Somewhat
• Magazines Martha Stewart
• Consumer Group Classic

6
Retail Sales Promotion

• Why Promote?
• Awareness
• Interest
• Desire
• Action
• External Factors
• Seasons
• Holidays
• Events
• Sales Cycle
• Competition

• Other Factors
• Historical Factors
• Sales Goals
• Flavor of the Week

7
Benefits of Promotion

• Control and anticipate
• Sales
• Expenses
• Control inventory
• Project image

8
Considerations Desired Image

• Name
• Logo
• Style
• Features and Benefits
• Product
• Store
• Price Points

9
Considerations Reach and Cost

• Reach
• Who will see it
• Cost
• What it will cost
• CPM Cost per thousand
• Examples
• Superbowl 2.4-2.5 Million for 2006 30-sec.

10
Other considerations

• Coordination
• The story of this course
• All elements must support each other!
• Creativity
• Deliver the message in an engaging way
• Must stand out
• We see thousands of messages every day

11
Budgeting

• Sales Promotion Appropriation
• The amount of money spent on sales promotion
• Typically 1.5 - 6 of net sales
• Top-to-Bottom Method
• Overall budget is created and allocated to
  various divisions
• Bottom-to-Top Method
• Promotional funding is determined by each
  division
• All-you-can-afford
• Based on other limitations/needs
• Todays Reality A combination

12
Other Promotional Costs

• Payroll
• Supplies
• Postage Printing
• Travel
• Miscellaneous

13
Planning the Calendar

• Promotion Schedule

14
Planning the Calendar Needs

• A list of national holidays local events
• Last years calendar
• Historical sales and promotion expenses

15
Planning the Calendar Create the Budget

• Monthly sales goals
• Use last years sales as guide
• Needed promotion
• As percentage of Sales Goals
• Other factors
• Reserve budget
• 10-20
• Allocation
• Divided among various activities
• Dont forget other expenses

16
Planning the Calendar The Calendar!

• Use the allocation to determine
• Media buys
• Displays
• Events
• Etc.
• Create daily plan

17
Case Study Country Junction

• Furniture
• Gifts
• Home Decor
• Building Materials
• Lawn Garden
• Seasonal

• Hardware Tools
• Pets Pet Supplies
• Flooring
• Rental Equipment
• Kitchen Bath
• Paint Center

18
Country Junction 2002 Calendar of Events

• January 5-20 Storewide Sidewalk Sale
• March 2324 Pictures with the Easter Bunny
• March 23 Free Easter Egg Hunt
• March 29 30 Free Easter Egg Hunts, Pictures
  with the Easter Bunny
• May 4 Flea Market Open Sat Sun through Sept.
  14
• May 22 Lobster Feast (private party by
  invitation only for top 500 customers)
• May 27 Happy Memorial Day! OPEN 9-5
• July 4 Happy Independence Day! OPEN 9-5
• September 2 Happy Labor Day! OPEN 9-5
• September 15 Annual Yard sale
• September 22 Car Show

• Sept 28-Oct 31 The Great Pocono Pumpkin Festival
• September 28 Fright Night
• October 45 Fright Night
• October 1112 Fright Night
• October 1819 Fright Night
• October 2526 Fright Night
• November 9 Annual Public Auction
• November 23 Santa Claus Arrives! Pictures with
  Santa 11-4
• Nov. 2324 Pictures with Santa 11-4
• Nov 2930 Pictures with Santa 11-4
• Dec 1,7,8,15,16 Pictures with Santa 11-4
• Dec 22 23 Pictures with Santa 11-4
• December 24 Christmas Eve Close at 3pm

19
Drawbacks of Promotion

• Variability is painful!
• Inconsistent ordering/production
• Train customers to wait for sales
• Extra expenses (e.g. overtime) can be high
• Customers may go to competition
• Retail Promotion is a Slippery Slope!

20
Solution EDLP

• Every Day Low Price
• Walmart
• Trader Joes
• Warehouse Clubs
• Reduce Variability
• Train customers
• Shop anytime
• Build trust

21
Price Protection

• Same item advertised at lower price
• Within 30 days
• Bring in ad
• Receive difference
• Often with a 10 bonus
• Retailers can cheat!
• Similar models with different numbers

22
Automatic Price Protection

• They look for other ads
• Automatically send you a check!

23
APP Followup

• Tweeter was committed to APP
• In 2002, reconsidered
• They had reimbursed 780,000
• 5 of consumers used regular PP (RPP)
• Under RPP, would have reimbursed 48,000!
• Plus, many people didnt understand APP
• Or care?!
• Ended APP program
• Used same money for other promotion

24
Break
25
Video Buy-ology
26
Product Presentations

• Product Name/Description
• Market Positioning
• Target Profiles
• Features vs. Benefits

27
HOMEWORK

• Read Chapter 4 (Advertising Department)
• Refine
• Product concept/description.
• Product Name
• Positioning statement
• 3-5 Target Profiles
• Features vs. Benefits
• Logo References
• Finish Logo

28
Preview of Next Week

• Project Review
• Show me what youve done
• Must be up to date
• See previous slide
• Packaging