01-11-2013

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Trade Promotions
Pull Strategy
Pull Strategy &
Push Strategy
Push Strategy
Manufacturer builds strong
consumer demand for a
product to force members
to automatically promote
the manufacturers product
because it is in their obvious
self-interest to do so.
Manufacturer builds strong
consumer demand for a
product to force members
to automatically promote
the manufacturers product
because it is in their obvious
self-interest to do so.
Manufacturer develops mutual effort &
cooperation in the development &
implementation of
promotional strategies by working directly with
members to develop strong & viable
promotional support.
Manufacturer develops mutual effort &
cooperation in the development &
implementation of
promotional strategies by working directly with
members to develop strong & viable
promotional support.
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Unit Sales
Time
Period of
Promotion
Unit Sales
Time
Period of
Promotion
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Unit Sales
Time
Period of
Promotion
Consumer & Trade Promotions
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Consumer
Promotions
Encouraging Purchase of
larger-sized units
Building Trial Among
non-users
Attracting Switchers
away from competitors
brands
Trade Promotions
Persuade retailers/ wholesalers to
carry the brand
Persuade retailers/
wholesalers to carry more
units of the brand
Induce Retailers to promote the
brand by featuring display, and
price reductions
To stimulate retailers & their
sales clerk to push the
products
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Sales Promotion Tactics
Consumer-directed
Samples
Coupons
Cash refund offers
Price offs
Prizes
Patronage rewards
Free trials
Tie-in promotions
Trade-directed
Price offs
Allowances
Free goods
Sales contests
Spiffs
Trade shows
I
M
P
A
C
T
Promotions +Ads +POS Support
Promotions +Ads
Promotions
Only
Selecting Consumer Promo Tools
Type of market, Sales promo objectives, Competitive
conditions & cost-effectiveness
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Basic Push Promotional
Strategies
1. Cooperative Advertising
2. Promotional Allowances
3. Slotting Fees
4. Displays & Selling Aids
5. In-store Promotions
6. Contests & Incentives
7. Special Promotional Deals & Merchandising
Campaigns
Cooperative Advertising
Typical
Strategy:
A sharing in the cost on a 5050
basis up to some percentage of
the retailers purchases from
the manufacturer
Administration:
1. Effective administration by
manufacturer is necessary to
avoid abuses & to help secure
cooperation from channel members
2. Channel manager must be sensitive
to channel members primary concern
about this strategy
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Promotional Allowances
Typical
Strategy:
Manufacturer offers channel member
a direct cash payment or a certain
percentage of the purchases on
particular products
Administration:
Manufacturer should conduct
research to determine whether it
is getting its moneys worth in
terms of retailer cooperation and
follow-through
Slotting Fees
Typical
Strategy:
Payments by manufacturers to
persuade channel members, especially
retailers, to stock, display, and
support new products
Administration:
J oint sponsorship of research
between retailers and manufacturers
on effects of slotting fees on various
topics could help alleviate conflict
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Displays & Selling Aids
Typical
Strategy:
Include point-of-purchase (POP)
displays, dealer identification signs,
promotional kits, special in-store
displays, & mailing pieces
Administration:
Channel manager should make the
effort to see whether the firms
selling aids and displays are serving
any useful purpose
In-Store Promotions
Typical
Strategy:
Short-term events designed to create
added interest and excitement
for the manufacturers products
Administration:
The planning of a successful
in-store promotion should always
include considerations of the
potential benefits for the
retailers involved.
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Contests & Incentives
Typical
Strategy:
Techniques that manufacturers use
to stimulate channel member sales
efforts for their products
Administration:
Manufacturer should put much effort
into determining the view of
channel members
toward this form of promotion
Special Promotional Deals &
Merchandising Campaigns
Typical
Strategy:
Include a variety of push-type
promotional deals such as discounts
to channel members to encourage
them to order more products
Administration:
Manufacturers need to develop
carefully planned strategies that are
based on knowledge of channel
member needs and that take a
long-term perspective on promotion
through the marketing channel
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Kinder & Gentler
Push Promotion
Training Programs
Quota Specification
Missionary Selling
Trade Shows
Group 7 SDM (Re ckit t Be nckiser)
Abhishek| Aritra| Prabit| Shubham| Shishir| Yogesh
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W HOLESALER LOYALTY PROGRAM
AWARD PROGRAM S
Qualification Criteria
Calculation
Rewards
By invitation only
Valid for one half yearly cycle
Minimumaverage RB business of Rs. 15,000 per month
If no points are earned for two consecutive months, the
member ship stands cancelled
Total Points Earned =Base points +Consistency Bonus points
Base Points 2 points on every purchase of Rs.2000
Consistency Points 10%of the total quarterly points, on
purchase of at least Rs. 15,000 per month
HDFCgift cards
UDAAN SILVER CLUB
W HOLESALER LOYALTY PROGRAM
AWARD PROGRAM S
Qualification Criteria
Calculation
Rewards
By invitation only
Valid for one half yearly cycle
Minimum average RB business of Rs. 45,000 per month
If no points are earned for two consecutive months, the member
ship stands cancelled
Total Points Earned =Base points +Consistency Bonus points
Base Points 3 points on every purchase of Rs.3000
Consistency Points 15%of the total quarterly points, on purchase
of at least Rs. 15,000 per month
Quarterly Targets, SKU Bonus
HDFCgift cards
Gold coins
UDAAN GOLD CLUB
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W HOLESALER LOYALTY PROGRAM
AWARD PROGRAM S
Qualification Criteria
Calculation
Rewards
By invitation only
Valid for 1 yearly cycle
Minimumaverage RB business of Rs. 1,50,000 per month
If no points are earned for two consecutive months, the member ship
stands cancelled
Minimumof 1950 points to retain membership
Total Points Earned =Base points +Consistency Bonus points
Base Points 5 points on every purchase of Rs.5000
Consistency Points 20%of the total quarterly points, on
purchase of at least Rs. 15,000 per month
Quarterly Targets, SKU Bonus
HDFCgift cards
Gold coins
UDAAN Platinum CLUB
Company StoreType IncentiveOffered
HUL All kinds of stores
4% on invoice +3% on targets +cash
amounts in range of Rs. 800-1500 for
additional temporary displays
P&G All Kinds of stores
4% of invoice for two permanent displays
+Fixed amounts in range of 500 1500
for additional temporary (new products/
seasonal) displays
GSK All kinds of stores
Rs. 600 - 1500/ Month / window
Vary accordingto store sales throughput
Johnson &Johnson
High Throughput
stores
Rs.300-1000/ month / window
Vary accordingto store sales throughput
Nestle Al kinds of stores
Rs. 300/ month/ window for low
throughput stores
Rs. 600 - 1000/ month / window for high
throughput stores
Himalaya
High Throughput
Stores
Rs.500-800 per month / window
dependingon store sales
Reckitt Benckiser Udaan Stores
4% (2% of invoice +2% on reaching
targets for 1 display
(seasonal/ temporary)
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Group 9:
Pranita Gautam PGP28009
Kruttika Nadkarni PGP28032
Ipsa Kalra PGP28351
Sharvin Bhatt PGP28381
Amiya Ashirwad PGP28383
TRADE PROMOTIONS FOLLOWED BY MARICO
PRICE BASED PROMOTION: Retailer Loyalty Program
Product Scheme
Name
Scheme Description Rationale
All products MERAScheme Valid for A class of retailers
Displaywindow hired at the outlet for
11 months
INR 350 per month allowance +1%
discount upon crossing sales target
Displayof
products
One time activity
MostlyParachute
range
UNNATI Mostly for Chemist retailers
4%discount on next bill upon
exceeding 110%mark
Drivingsales
volume
SaffolaEdible oil Bandhan Duration is 11 months
17 retailers in Lucknow
Cash-cum-voucher incentive structure
Incentive on the basis of slabs; 3
months sales performance
Cash based incentive like
80p/Re.1/Rs.2/Rs.3 per liter or
Accumulated points redeemed in
exchange of silver/gold coins
Ensures strong
relationship with
the retailer
Drives sales
volume
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PRICEBASED PROMOTION: QUANTITY BASED DISCOUNT
Product Scheme Description Rationale
Set Wet
Deodorants
Saffolaoil
Discounts on thebasis of slabs i.e.
36 pieces/72 pieces/100 pieces
Based on number of cartons
procured;
5 cartonRs.150 discount
10 carton Rs.350 discount
Maximizingsales
volume enabling
retailer to stock more
than expected
TRADE PROMOTIONS FOLLOWED BY MARICO
NON-PRICE BASED : POINTOF PURCHASE DISPLAYS
Product Scheme Description Rationale
Parachute
After-
Shower
Crme
Parachute
Therapie
Marico provides the
followingdisplay units
at retailers-
Displayboards, Stick-
ons
Racks
Dispenser units
Increase the
product visibility
Integrates
consumer sales
promotions along
with trade
promotions
TRADE PROMOTIONS FOLLOWED BY MARICO
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NON-PRICE BASED : SLOTTINGALLOWANCE
Product Scheme Description Rationale
Jasminehair oil,
Parachute hair oil
Basedon: size of retailer, new product
launches, push for existing products
Variable slotting allowance
Changed on monthly basis
The allowance varies from Rs.500 to
Rs.2000 per month.
Balances the
risk of new
product failure
between
Marico and its
retailer
NON-PRICEBASED : SALESINCENTIVE
Product Scheme Description Rationale
Set Wet
Deodorants
Incentives basedon: Overall target
reached, Product line volumes etc.
Salespersons are provided Re.1 share of
profit on per piece sold.
Actsas a
motivation for
sales force
thereby,
capturing a new
channel
TRADE PROMOTIONS FOLLOWED BY MARICO
TRADE PROMOTIONS FOLLOWED BY ITC
PRICE BASED PROMOTION: Retailer Loyalty Program
Product Scheme Name Scheme Description Rationale
Entire ITC range
of products
First Club
loyalty
program
Enrolment criteria-performance for
three months
Redeemable points for gifts and
discounts allotted depending on price
& volume of products stocked
Develop a
relationship
with the
retailers
QUANTITYBASED PROMOTION: Retailer Loyalty Program
Product
Scheme
Name
Scheme Description Rationale
Mangaldeep
Agarbattis
Sigma Scheme Festive season(15
th
Jul 15
th
Nov)
Quantity slabs have been provided for
retailers, for e.g.
2000+,3000+,5000+,10000+,20000+
Based on this invoice discounts are
offered in the range of 2%, 2.5%, 3%,
4%and so on.
Exploit the
timing
possibility
Volume
based
incentives
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NON-PRICE BASED : SLOTTINGALLOWANCE
Product Scheme Description Rationale
All products Allowance for shelf space on the basis
of retailer location, volume of the
outlet, in-shop parameters etc.
Amount may range from INR 300 per
month to INR 2000 per month
Dedicatedshelf
space for ITC
Balances the risk
of new product
failure between
ITC and its retailer
TRADE PROMOTIONS FOLLOWED BY ITC
NON-PRICE BASED : POINTOF PURCHASE DISPLAYS
Product Scheme Description Rationale
Bingo! Snacks
FiamaDi Wills
ITC provides thefollowingdisplay units at
retailers-
Displayboards, Stick-ons, Product Labels
Racks
Increase the
product visibility
Used to create
the urge of
"impulse" buying
and selling the
product on the
spot
NON-PRICE BASED : SALES-FORCEINCENTIVE
Product Scheme Description Rationale
New products (Bingo!
Yumitos)
On thebasis of Target achieved,
Product Line volumes
Incentive providedfor higher %
sale of Yumitosto sale of Bingo!
Snacks
Cross-selling with Bingo! Tedhe
Medhe
New brand, hence
requires more push
Challenge the
competitors (Lays)
market share
Leverage the high sales
of Bingo! TedheMedhe
in the Lucknowregion
TRADE PROMOTIONS FOLLOWED BY ITC
NON-PRICEBASED : TRADE CONTESTS
Product Scheme Description Rationale
Entire ITC range Retailers classified according to their volume
carrying capacity, area served-receive price-
based and non-price based incentives, along
with other gamefiedincentives such as lucky
draws
Induces
competition
among the
retailers