While advertising explains the logic behind buying, sales promotion offers us an incentive to do so. It is like turning a brand into a commodity, and sells it on price sensitivity. Additional value covers – money, e.g., reduced prices, free sample, extra value. Today, sales promotion is attracting more and more of the promotional budget. Incentives are something of financial value added to an offer to encourage some obvious behavioural response. “Working in sales” can refer to a number of different types of sales roles; you may be surprised by the variety of options available. 5. The two types of sales promotion tools consumer are as follows: A. Sales promotion is designed to be used as a short-term tactic to boost sales – it is rarely suitable as a method of building long-term customer loyalty. It also builds a top-of-the-mind awareness. Promotion is not only addressed to consumers but also to dealers. Promos should be integrated to products and advertising. Event management covers product launches, theme parties, promo for liquor and cigarette brands, music driven events, beauty pageants, etc. 6. When a competitor takes a non-promotional route, the promotion led brand is vulnerable. These schemes are intended to motivate sales people to put in more efforts to increase sales, increase distribution, promote new or seasonal products, sell more deals to resellers, book more orders, develop prospects lists and build up morale and enthusiasm. John Paul Jones in his seminal work “What’s in a brand”? It is also known as a push strategy, which is directed at the dealer network so that they push the brand to the consumers by giving priority over other competitor brands. Advertising agencies accord low status to sales promotions and usually employ junior staff for sales promotion so that they may be trained for more creative jobs. Marketers must be on the lookout for ways to rise above the clutter. For example- The Confederation of Indian Industry (CII) organises several business and trade fairs on specific industries. To illustrate, National offers Rs.500 off on its grinder mixer if a consumer brings his own old grinder mixer. 9. (a) When established brands have a declining market. Marketers should also know the brand does not need any promo. Thus, they will get the benefit of additional business. Sales Promotion: Concept, Objectives, Types, Tools, Techniques, Advantages and Disadvantages. Once the marketing strategy assigns promotion-mix the role of using “pull-push” in case of sales promotion and only “pull” in case of advertising, the promotion objectives have consumer as well as trade orientation, and the sales promotion strategies focus on different consumer promotions and trade deals. It also affects the brand equity. Promotion can be launched directed at consumer or trade. The maximum and minimum discount must be stated. The contest is called ‘the world’s greatest salesperson’. Samples help consumers verify the quality of the product. Promos have limited reach and cannot change brand perceptions across the entire spectrum of customer uni­verse, even if supported by the company. to promote the sale of an established product, to stimulate customers to switch brands; and. Sales Promotion – Options of Promotion Objectives, The company made Ogilvy writes a manual for other salesmen. Options of Promotion Objectives 9. The Basis of Consideration in Trade Promotion are: (a) The capabilities of the parties. Developing the Sales-Promotion Programme, 4. The final step is to evaluate the results of the programme in order to determine the effectiveness of the programme. (e) When we decide to embark upon aggressive sale campaign. Premium may be of several kinds — direct premium, reusable container free in mail premium, a self liquidating premium, trading stamps, etc. There was a joint concert of Nescafe and Samsung. Agencies like Trikaya-Grey, Ad Avenues and Maa Bozell have set up separate divisions to handle events. Sales promotion objectives could be either pro-active or reactive. Sales Promotion – Why Use Sales Promotion? Planting the gold (sell more profitable product mix). These rewards can be given for individual performances and for special achievements. The same holds true for markets. 8. Explain how sales promotion campaigns are developed and implemented. Promos support mainline advertising. Sales Promotion Objectives: Increase in Sales Volume, Encourage Repeat Purchase and To Block Competitor Moves Sales Promotion Objectives – Top 7 Objectives: Launch New Products and Increase Trail, Encourage Dealers to Participate in Display and a Few Other Objectives. This structure can lead to problems if a single l arge customer buys many different company products. 2. The retailers are poor in administration of complete schemes, whereas the wholesal­ers are poor at generating the primary demand. On the contrary, such promotion delays further repurchases. Contest is not an intelligence test, and so should be absolutely clear. Short purchase cycles mean short-term effects. A free automatic camera is given free with every Samsung refrigerator, a portable colour Akai TV free with a 21-inch Akai TV, etc. The marketer has to determine the size of the incentive, conditions for participation, duration of promotion, the distribution vehicle and timing of promotion, total sales-promotion budget and the incentive cost in order to arrive at a full programme. Those who look at SP tools in a store setting are very good prospects, or else they would not have been in-store in the first place. Promos need mainstream advertising support if they are expected to change brand perception. (xi) Point-of-purchase (POP) display and demonstrations. Sales Promotion is an important instrument in marketing to lubricate the marketing efforts. The trade promotions help build customer traffic at the retail outlet. Samples help consumers verify the quality of the product. Increase sales on average per account. The earliest redemptions are incremental sales. The product manager type organisational structure in which product managers are constantly goaded to sell more has given a boost to SP. 5. In a recent Tata group contest, the participants had to select the ‘Pride of India’, complete a slogan, and send the entry with an empty packet of any Tata tea or coffee, and one could win a Mercedes Benz or a Tata Sumo Deluxe car. Point-of-purchase displays give a real payoff, sales rising by 25 to 50 % or even more. Uploader Agreement. A coupon with a sample is twice as effective as a coupon alone. The company’s marketing objectives and strategies influence the development of sales promotion objectives and strategies. Couponing works betters for premium products because price-offs give genuine value to the customers. It can arouse enthusiasm, create a buying mood or spark an immediate reaction from consumers, dealers and the firm’s salesperson. Designing of the Sales Force. Not only does it give profit but it also serves other purposes such as provision of information, creation of demand, repeat buyers, sales stabilisation and quick inventory turnover. Too many sales promotions may affect adversely the brand image, suggesting its lack of popularity or overstocking by a company. The nature of promotional offers has changed. 20,000 on the car would have smacked of an inferior quality. Couponing is used as a tool to penetrate the markets. Consumer level sales promotional tools are: (d) Self-liquidating premium (item sold below its normal retail price). The managerial considerations are discussed along with sales contests. Copyright 10. In case, they are not linked to purchase, the construct becomes complex. Major Sales Promotion Techniques Companies use various sales promotion techniques to promote their products. Some agencies working in this field in India are Glea Public Relations of Shri Nair, Wiz.Com (a division of Wizcraft) of Timmins, Joseph and Sarkari and Fountain-head of Murry and D’Souza and Tellis. This involves offering products to consumers at discounted or reduced prices by a certain percentage from the regular price of the product. What constitutes a new order? Promotions must tie- in well with the brand’s message. (ii) The trade is motivated to carry a larger inventory. (2) Dealer Promotion- Activities to increase the interest and enthusiasm of dealers and distributors. It induces trials and generates loyalty. One maxim is, do promote, but not at the cost of brand equity. SP got a little share. Sales promotion, in other words, is a marketing activity that adds to the basic value of the product or services for a limited period of time and directly stimulates purchasing by the target audience. To clear unsold stocks of an old product. 2. They have seldom reuse values. We'll cover promotions to increase sales, to encourage repeat business, and to boost brand awareness. Calling attention to new products and product improvements. In-pack premiums are separately given, where the retailer has to extend cooperation. They introduce new product by asking the prospects to state the reasons for the purchase of the product. Pre-testing ascertains cost-effectiveness of various alternatives. But because it pays rich dividends, sellers have accepted it as an important item in the marketing-mix. The present contest will earn the winner a fellowship during which the winner will help Ogilvy write a guide to selling in the 21, Sales Promotion – Sales Representative Level Promotion, 1. In other words, buy back allowances are given for new purchases, based on the quantity of goods bought previously. It requires a substantial media budget over and above the freebies. Briefly review how the main tools of sales promotion (e.g., sampling and couponing) can be used in global markets. Representative level promotion must have an element of excitement and also should be capable of entertaining the participants. (b) Competitors arise up their sales promotion. Same prizes for each contest are to be avoided. They may be distributed door to door, by mail or they may be inserted in packages. Many sales promotion campaigns involve the use of incentives. Sales promotions are short-term incentives to buy products. Advertising to promotional ratio in the early 90s was 70:30, but it is just the reverse today. 4. 5. Sales promotion is generally defined as those marketing activities that provide extra values or incentives to the sales force, the distributors, or the ultimate consumer and can stimulate immediate sales. a highly fragile, perishable or bulky product. Why Use Sales Promotion? Novel themes – the focus is on recreation and fun linked with the current sales scenarios. Perhaps, there is no effect of advertising now. In a contest, individuals should not be pitted against each other. Promotions differ from advertising in that advertising offers reasons to buy, while promotions offer incentives to buy. Report a Violation 11. (ii) Allowances like advertising allowance or display allowance. Indeed the contest is brickmanship! Samples. Customer Sales Force Structure: The sales force is organized along customer or industry lines. The annual expenditure for sales promotion is rising rapidly. Large sales force with a hierarchical order calls for contests for different groups, and eligibility criteria restrict the participation to each group. There is no consumer empathy with the brand. This holds true even for the Indian market. Producers can organise competitions or contests among salespersons to encourage them to generate more sales from new customers. Tools 11. To stimulate replacement demand, a company gives a certain amount of the price of a new product in exchange of the old product. In TV market, the introduction of S-band and hyper-band sets led to the replacement of old 12-channel sets, thus giving rise to exchange offers. The consumers become addicted to promotional offers and do not consider the brand unless there is a freebie. 5. Demonstrations are provided free of cost. Promos should be designed keeping in mind the brand objectives and consumer behaviour. 3. A freebie is allowed only when the company bears its cost. Plagiarism Prevention 5. They are also sent by mail or given to customers in the retail store itself. 3. Similarly, Videocon offered Rs.7,000 off on its No-frost model of refrigerator against an old fridge. Pre-testing is done by panel method, or by mail survey or by a field-study. Timely interven­tion in the form of reminder ads, additional deployment of sales force, additional POP material, etc., may sometimes be necessary. Sales promotion serves to fill the gap between advertising and personal selling by coordination and supplementation of the efforts in these two areas. The themes could be creatively chosen. The bonus is paid on achieving this sales quota. Promotion and Promos 14. All concepts of brand management are thrown to the wind. Companies usually, therefore, pay additional handling charges to the retailers per coupon handled. 3. To develop favourable consumer experience with the product. Say, a cheap ice cream cone offered at McDonald’s attracts people inside and then they can try the other items on the menu. 2. These samples may be distributed door-to-door (through personal selling) or retail stores. There are three kinds of sales promotion. Moreover, distributing samples to customers also involves expenditure. Specific marketing objectives – If these objectives are spelled out clearly, an effective solution can be conceived. Consumer promotions are directed towards the consumer and are strongly prevalent in the FMCG category. ADVERTISEMENTS: In this article we will discuss about sales promotion. Sales promotion is increasingly being used to accomplish an ever-expanding list of marketing objectives. Couponing gets a boost in a competitive environment. The market is to be assessed soon after the scheme begins. A push promotional strategy makes use of*a company’s sales force and trade promotion activities to create consumer demand for a product. Con­sumers take promos for granted. Trading stamps are given by the seller to consumers. (i) The trade is motivated to carry the brand. Direct themes could be obtaining new accounts or improving the market share. Huge Collection of Essays, Research Papers and Articles on Business Management shared by visitors and users like you. Temporary – What length of time would qualify for being temporary? Consumer promotion can be offered either by a manufacturer or a retailer. Producers / retailers may promise free service to consumers for a specified period of time after sales. Point-of-purchase displays give a real payoff, sales rising by 25 to 50 per cent or even more. Marketing, Products, Promotion, Techniques, Sales Promotion. Eight significant differences between personal selling and sales promotion are described in this article. move to levy excise duty on the maximum retail price of consumer durables may affect the discounts and promotional schemes. These are cost-effective motivators and improve representative’s productivity. In a dynamic and rapidly changing marketing environment, unfavourable conditions may appear with little or no warning. of the total promotional budget. Communication of the team of judges, and criteria of judging. Mostly in-house journals, circular letters, personal letters motivational letters and reminders are used to promote the contests. Terms of Service 7. Even price-off may tell upon the quality, because the manufacturer is likely to cut corners somewhere. Techniques 12. Types of Consumer Sales Promotion tools 1. Therefore, it is necessary to classify sales promotions into two broad categories – sales promotions aimed at consumers and sales promotions aimed at distribution channels (which is more commonly referred to … Sales-promotion involves a lot of expenditure. 8. Advertising is salesmanship in print, but has moved too far from it. In-pack premium has a con­straint. Everything must be specific. Allowances are granted to buyers on the basis of their previous purchases. Binaca used to give those animal replicas. Sales promotion refers to temporary incentives offered by an organization to either their customers or their resellers, with the intention of increasing the sales of their products. Advertising expenses so far accounted for more than 60 p.c. The details of the promo must be worked out carefully. Consumer promotion takes care of the strong competitive brand. To add extra value to the product and develop brand franchise. The contest will be held on a branded channel on Youtube and will use other social media like Facebook and Twitter. (i) Price-offs or off-invoice or off-list. There are tools like Sales Meetings, Sales manuals , sales contests, incentives and many more. Learn about:- 1. (b) When there are no product improvements. A company will select their philosophy by deciding on how to harness their internal strengths to reach their consumers. But with companies becoming more market oriented, a customer-focused sales force also works to produce both customer satisfaction and company profit. Consumer promotion helps to penetrate the market. Opel users are invited to an evening of entertainment, extending interaction beyond purchase. Such co-promotions create tremendous awareness for the new en­trant. SP is to be measured by pre-testing it, monitoring it during implementation and by post-testing. There are three types of sales promotion strategies’. To effect sales of a specific pack size (Vicks large size bottle) or in a specific market(s). Thus, sales-promotion is used at the time of introducing a new consumer product, to secure maximum dealer stocking, display space and attention of consumers. Here, proper forecasting and sourcing are important. Increasing, usage rate by present customers. For example, it is easy to measure the impact of discount offer on sales, but it is very difficult to measure the impact of premium on the perceived value of the promoted brand. The most common objectives under pro-active category are: 1. There is no ‘fair’ or ‘just’ contest. Healthy customers, Healthy sales (more profits per customer), etc. Rebate is a partial refund to someone who has paid more or extra on purchase of a specified quantity or value of goods within a specified period. Studies on SP give us the following guidelines: 1. A rebate of Rs. These are redeemable at the stamp redemption centres. Sales volume can also be increased through effective mobilization and encouragement to the sales-force. Success of couponing exercise is based upon retailer cooperation. Premium products are sold on pull factor, and a promo works on a push factor. What part of their arsenal will they use? Sales promotion is the process of persuading a potential customer to buy the product. A panel of judges selects the best and buyers are given prizes. Salesforce promotion techniques are used to motivate salespeople to put in more efforts to increase sales, increase distribution, promote new or seasonal products and build up morale and enthusiasm of Salesforce. One has to communicate with the consumer through advertisements and POPs at the retail level. The retailers were formerly reluctant to handle coupons because passing coupons to distributors, who in turn passed them on to the company, and receiving pay­ments thereafter took a lot of time. However, sales force is expensive and companies are looking forward to managing them in an efficient and effective manner. Consumer-oriented Promotion Tools B. Trade-oriented Sales Promotion. Sales promotions are only supplementary devices to supplement selling efforts of other promotion tools. 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