Marketing Communications

CONSUMER PROMOTIONS 379

For existing products, it is useful to keep the trade channel motivated to sell the brand.

Trade promotions are aimed at maintaining shelf space or at inducing the retailer to promote

the product by means of retailer promotions. One way to motivate the trade channel to push

the product is by increasing its stock. Full warehouses induce the trade to pay more attention

to selling the products in stock, i.e. to give them more shelf space and to promote the prod-

ucts actively themselves. On the other hand, trade promotions can be used to decrease the

stock of a product in the trade channel rapidly, e.g. when a new product launch is being

prepared. In a more general sense, trade promotions are used to keep the distribution channel

loyal to a product (category). Much as in the case of ‘rewarding’ the consumer for loyalty to

a brand by means of consumer promotions, the distribution channel may be rewarded for its

loyalty in giving shelf space to a product by means of trade promotions.

Th e sales force are an integral part of the distribution eff ort, since they are the fi rst link in

the distribution channel. As a result, off ering them incentives to market the product well is a

vital fi rst step in any marketing strategy. Th e most important objectives of sales force promo-

tion are to induce the sales force to approach new customers, more specifi cally members of

the trade channel, to try the product, or to increase the volume purchased by existing cus-

tomers. In industrial marketing situations, new fi nal customers can be the target. Th e sales

force can also be encouraged to push new or existing brands as part of an integrated short-

term sales promotions eff ort, or in support of an advertising campaign. As in consumer

promotions, a synergetic eff ect between sales force promotions and other communications

tools, such as advertising, can be established. Finally, the sales force can be motivated to help

the distribution channel to improve exposure of the brand, by giving it more and better shelf

space, keeping the shelves fi lled, checking stocks, and pushing and improving the use of dis-

plays and other in-store communications material.

Depending on the objective of the promotions, a number of specifi c tools can be used. An

overview of consumer and trade promotion techniques is given in the following sections.

Consumer promotions

Depending on the type of incentive, we distinguish three categories of consumer promotions:

monetary incentives, product promotions and the chance to win a prize ( Table 12.1 ).

Monetary incentives

Diff erent types of monetary incentives can be used, but they all lead to an improved price/

quality perception by the consumer by lowering the price of the product ( Photo 12.1 ).

Th e most direct and simple monetary incentive is the price cut on the shelf in which the

consumer gets an immediate discount when buying the product. It can be used to generate

trial, stimulate repeat purchase behaviour and for ‘basket-fi lling’ purposes. Th e advantage for

Table 12.1 Consumer promotion tools

Monetary incentives Chance to win a prize Product promotions

z Price cut on the shelf

z Coupons

z Cash refunds

z Savings cards

z Contests

z Sweepstakes and lotteries

z Sampling

z Extra volume

z Free in mail

z Premiums

z Self-liquidators

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