Your Sales Promotion strategy will need to vary with the Life Cycle of your product. For instance, Trade Shows and Sales Force training will be important a new product launch, bur progressively less so as the product ages. Your existing product will be in the Mature phase of its life cycle for your first Sales Promotion decision (Sales Promotion decisions are available after the 1st rollover).
It is important that you get your Sales Promotion Mix right, because it helps boost your distribution coverage and distribution index. In addition, some segments are particularly sensitive to Distribution, such as the Music Segment.
There are 6 types of Sales Promotion activities available to you to promote your products and support your distributors:
- Trade Shows
- Salesforce Training
- Premiums (Gifts)
- Website/Social Media
- Point of Purchase Displays
- Rebates
So, how do I choose a Sales Promotion Mix for my products?
Remember that each of your products will progress through the Product Life Cycle starting in the Growth phase for new products and then gradually progressing through to the Decline stage over the next six rollovers.
Say we launch a new Fitness product this period. This new product will start in the Growth phase of the Product Life Cycle (See Market Information Report > Sales Promotion). Then from looking at the tables below, we can see that our Ideal Sales Promotion Mix for a new Fitness product is:
That was a simple example, but what happens in the second year that we sell this Fitness product? The product will be moved from the “Growth” phase to “Growth – Starting to Mature.” So the optimal Sales Promotion mix will be 1/3 of the way between the ideal Growth and Mature figures in the Sales Promotion Table. That would give us an optimal Sales Promotion mix something like:
- Trade Shows – 10% (Ideal Growth = 15%, Ideal Mature= 5%)
- Sales Force Training – 17.5% (Ideal Growth = 25%, Ideal Mature= 10%)
- Premiums (Gifts) – 15% (Ideal Growth = 5%, Ideal Mature= 25%)
- Website and Social Media – 22.5% (Ideal Growth = 25%, Ideal Mature= 20%)
- Point of Purchase Displays – 25% (Ideal Growth = 25%, Ideal Mature= 25%)
- Rebates – 10% (Ideal Growth = 5%, Ideal Mature= 15%)
Total = 100%
*Since the simulation only allows whole numbers, you may adjust the percentages by rounding as needed.
You should buy the Sales Promotion Analysis report for detailed information on how effectively each firm has targeted their Sales Promotion for every product on the market.