Sales promotion

Meaning
Sales promotion refers to many kind of incentives and techniques that are directed
towards consumers and traders with the intension to produce primarily immediate
or short term sales effect.
It is an important and powerful tool of marketing. the aim of sales promotion is
goal-oriented to achieve sales/marketing objectives which are short-term and
immediate.
!enerally sales promotion is not used to generate long-term results or sales in the
future but rather to generate sales results now.
"he range of tools and techniques of sales promotion includes
discountscouponsfree samplescontestgamesspecial
packsallowancesdemonstrationse#change offers and many others.Sales
promotion add value to the product or service
Identifying the sales promotion $
%hen you are identifying possible sales promotions make sure that everyone
involved including the customer benefits.
"he benefits might be$
&ccess to communications channels such as lists clients or advertising.
the 'feel good' factor the association creates for clients or customers
reinforcement of the company's image
provision of rewards to clients or audiences
stimulation from working and learning from each other
increased sales
better seats priority booking private viewings cheaper prices learning
opportunities and so on
"hey are involved in a broad range of marketing service.
&ccounts handlers are heavily involved in the creative process.
( )ole of promotion
* "o facilitate e#changes directly or indirectly by informing individuals
groups or organi+ations and influencing them to accept a firm,s products
or to have more positive feelings about the firm
( -onvey product and service information directly to target market
segments
( .rovide information to interest groups regulatory agencies
investors and the general public
* "o maintain positive relationships between a company and various groups
in the marketing environment
Information /lows Into and 0ut of an 0rgani+ation
( & promotional activity,s effectiveness depends on the information available to
marketers
"he .romotion Mi#
( "he particular combination of promotion methods a firm uses to reach a target
market
* &dvertising
( & paid nonpersonal message communicated to a select audience
through a mass medium
* .ersonal selling
( .ersonal communication aimed at informing customers and
persuading them to buy a firm,s products
* Sales promotion
( "he use of activities or materials as direct inducements to
customers or salespersons
* .ublic relations
( -ommunication activities used to create and maintain favorable
relations between an organi+ation and various public groups both
internal and e#ternal
.ossible Ingredients for an 0rgani+ation,s .romotion Mi#
Sales .romotion -ampaign .lanning
( .romotional campaign
* & plan for combining and using the four promotional methods1
advertising personal selling sales promotion and public relations1in a
particular promotion mi# to achieve one or more marketing goals
( %hat will be the role of promotion in the overall marketing mi#2
( "o what e#tent will each promotional method be used in the
promotion mi#2
.romotion and Marketing 0bjectives
( .roviding product information to target markets
( Increasing market share by convincing new customers to purchase
( .ositioning the product relative to the images customers have of competing
products
( Stabili+ing sales by increasing sales during slack periods or for products that are
declining
3eveloping the .romotion Mi#
( Marketers may use several promotion mi#es at the same time for different
products
( "he promotion mi# ingredients depend on
* 0rgani+ational resources and objectives
* "arget market characteristics
* .roduct characteristics
* "he cost and availability of promotional methods
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-onsumer sales promotion techniques
.rice deal$ & temporary reduction in the price.
6oyal )eward .rogram$ -onsumers collect points miles or credits for purchases
and redeem them for rewards. e#amples are .epsi Stuff .
-ents-off deal$ 0ffers a brand at a lower price. .rice reduction may be a
percentage marked on the package.
.rice-pack deal$ "he packaging offers a consumer a certain percentage more of
the product for the same price :for e#ample ;< percent e#tra=.
-oupons$ coupons have become a standard mechanism for sales promotions.
6oss leader$ the price of a popular product is temporarily reduced in order to
stimulate other profitable sales
/ree-standing insert :/SI=$ & coupon booklet is inserted into the local newspaper
for delivery.
0n-shelf couponing$ -oupons are present at the shelf where the product is
available.
-heckout dispensers$ 0n checkout the customer is given a coupon based on
products purchased.
0n-line couponing$ -oupons are available on line.-onsumers print them out and
take them to the store.
Mobile couponing$ -oupons are available on a mobile phone. -onsumers show
the offer on a mobile phone to a salesperson for redemption.
0nline interactive promotion game$ -onsumers play an interactive game
associated with the promoted product. See an e#ample of the InteractiveInternet
&d for tomato ketchup.
)ebates$ -onsumers are offered money back if the receipt and barcode are mailed
to the producer.
-ontests/sweepstakes/games$ "he consumer is automatically entered into the
event by purchasing the product.
.oint-of-sale displays$
&isle interrupter$ & sign the juts into the aisle from the shelf.
3angler$ & sign that sways when a consumer walks by it.
3ump bin$ & bin full of products dumped inside.
!lorifier$ & small stage that elevates a product above other
products.
%obbler$ & sign that jiggles.
6ipstick >oard$ & board on which messages are written in
crayon.
4ecker$ & coupon placed on the 'neck' of a bottle.
?7S unit$ @your e#tra salesperson@ is a pull-out fact sheet.
"rade sales promotion techniques
"rade allowances$ short term incentive offered to induce a retailer
to stock up on a product.
3ealer loader$ &n incentive given to induce a retailer to purchase
and display a product.
"rade contest$ & contest to reward retailers that sell the most
product.
.oint-of-purchase displays$ 7#tra sales tools given to retailers to
boost sales.
"raining programs$ dealer employees are trained in selling the
product.
.ush money$ also known as @spiffs@. &n e#tra commission paid to
retail employees to push .roducts.
"rade discounts :also called functional discounts=$ "hese are
payments to distribution channel members for performing some
function .
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Many of the biggest and most high profile promotion are developed and
implemented.
"hey are often called BconsultanciesC because unlike advertising and insurance
agencies.
"hey derive much of their income from fees rather than commission.
Sales promotion firms also derive a proportion of their income from selling
artwork merchandise print and other services. which is normally practiced
among consultancies.
how they work$
they charge for creative and conceptual work on a fee basis that reflects their time
input.
"hey are normally equipped to supply design art work premium sourcing and a
host of other services that are promotionally happens.
"hey are involved in a broad range of marketing service.
&ccounts handlers are heavily involved in the creative process.
< key attributed that a company normally look for a campaign is$
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o 3ealers aim at obtaining ma#imum cooperation from distribution channels
such as wholesalers semi-wholesalers and retailers who form the vital
links in the distribution chain.
o Manufacturers want preferred store locations and special displays. "hey
want the product to be displayed in those retail outlets where it is possible
to attract the ma#imum number of consumers.
o "rade deals are sales *promotion devices aimed at obtaining e#tended or
more focused distribution of a product or more attractive presentation of
the product at the point of sale.
"ypes of deals
3ealers loaders:
"he marketers have to keep the dealers properly supplied with stocks
continuously. Incentives given in this connection are known as Ddealer
loaders,.
Such an incentive scheme may be designed to correct seasonal slumps
increase volume in specific areas counteract competition or sometimes
just meet the annual sales targets.
"ypes of dealer loaders$
Merchandise deals$
%hen the marketer aims at building dealer inventories by offering e#tra
quantities of the product as incentive the technique is described as a
merchandise deal. In merchandise deals two non-competitive
manufacturers agree to offer each others product as merchandise deals.
.rice deals$
9nder price deals special discounts are offered to the retailer over and
above the regular discount.
.rice discount is more advantageous from the dealers point of view
because under merchandise deals the dealers has to convert merchandise
into cash.
!ifts to dealers$
& company may give like watches clocks or transistor radios to dealers
according to the volume of orders placed. "his may serve as a useful
reminder of the dealers link with the company.
&dvertising Incentives$
"hese allowances are used to induce wholesalers and retailers to promote
a product through advertising displays.
&dvertising incentives have three categories$
1. Merchandise allowance$
"his is a short-term contractual agreement through which a manufacturer
compensates wholesalers or retailers for advertising or in-store display of the products.
2. -ooperative &dvertising$
"he manufacturer makes a long-term contract to pay an allowances to retailers in
relation to the quantity of products purchased by them.
3. 3ealer-listing promotions$
3ealer-listing promotions are very popular among the two general classes of
trade deals concerning advertising because they are directed almost equally at retailers
and consumers.
"he names and addresses of retailers who stock the product or who are
cooperating in the promotion are publici+ed through the press and other appropriate
media.
"hey aim at announcing a product introduction or a promotion to consumers
and also inform them where the product can be purchased.
.oint-of *.urchase .romotion$
( "he majority of all sales-promotional activity fulfills its direct objective of
promoting sales. Most sales-promotion programmes are geared to encouraging the
dealers to stock display and promote a manufacturers products. .oint of purchase
is another important area of dealer incentive.
.oint of .urchase types$
( 3isplay contests$
3isplay contests are more of an advertising medium rather than a dealer incentive
offer. 3isplay contests carry pri+es in order to induce the dealer to take active part in the
sales-promotion programme.
( .0. 3isplays$
"here are many kinds of retail displays like shop signs window displays counter
pieces enlarged reprints of press advertisements mounted on cardboard and displayed on
counters or store windows display racks and other easily noticed places in a shop.
Manufacturers use the retail-display form of sales promotion to remind consumers of
their products at the point of purchase as well as aid their being quickly spotted by
prospective buyers.
( "rading Stamps and 3ealer coupons $
3evices that attract consumers to particular store such as trading stamps
and dealer coupons help build consumer loyalty to the store as well as increase
the volume of business for retailers.Such devices also remind consumers about the
product and may prompt them into buying them.
( "rading stamps$
"rading stamps are a premium given to consumers for purchase from a particular
retail outlet. "he number and value of stamps that the buyer receives depends on the
value of the purchase.
( 3ealer coupons$
3ealer coupons are similar to consumer coupons and are useful in building brand
loyalty among dealers.
)etail 3emonstrations$
)etail demonstrations are an important means of attracting attention to a product.
3emonstrators attempt to make the consumers buy a product either by giving a sample
of the product or showing prospective buyers the method of using the product.
online sales promotion$
E. 7ncourage impulse buys. /ast food restaurants understand this concept.
( Suggest related products. &n online shopper searches for a particular book and
clicks to view the details and reviews. "he detail page offers the book at a special
price if the customer buys it together with a book on a related topic or by the same
author
( &ssociate linked products. If a customer buys a video game ask if he'd also like
to buy some batteries games or other peripherals. "hose are items the customer
may forget to purchase or might not reali+e are available.
( 6imited time offerF & visitor is more likely to take advantage of a special offer if
she knows there's a time limit. @0nly ; days leftF@ >ut don't get carried away. &n
advertised limited time offer really needs to e#pire. 0therwise you lose the trust
of your customers.
;. 0ffer online-only specials. Many %eb users prefer to gather information about
products online. "hey visit a few sites to get an idea of what's available and at
what cost. >ut they don't complete the sale online.
( Instead many log off and head directly for nearest brick and mortar store to make
their actual purchase.
( -ombat this tendency by providing an incentive to buy online. &dvertise an offer
that's only available at your %eb site and you give your visitors added incentive to
become a customer. )emember though$ most users are quite well educated about
what's available. "hey'll know if your offer is really a special deal.
G. Ship larger orders for free. It doesn't take much more time and effort to pack and ship
< items than to pack and ship E item. It's more efficient for you to pack more
items in each order so give customers an incentive to purchase more at one time .
H. >e honest about pricing. .eople want to know the total price before they start filling
out a shopping cart order form. Most users will leave a site without completing
their purchase if the site doesn't show total cost * including shipping - before
asking for personal information.
<. .rovide great customer service. ?ou don't want one-time customersF It takes far more
effort to attract new customers than it does to keep e#isting ones. $ "hat simple c
oncept seems to be forgotten in these days of anonymous email and the torture of
automated phone systems.
I. -reate compelling %eb site copy. %eb site design is an important component of %eb
site credibility but design only takes you so far. Aisitors quickly note the design
but then look for content. /ormat your content to reflect how people read online
and consult "he -opywriter's 5andbook for instructions on how to write
persuasive convincing online copy.
( /ormat your content to reflect how people read online and consult "he
-opywriter's 5andbook for instructions on how to write persuasive convincing
online copy.
J. 5ave complete product information and photos. .eople want to see what they're
buying and they want to know a lot about it. >ut consider overall page si+e and
download time when you're adding this information.
K. Informational pages. ?ou accomplish two goals when you create informational pages.
.ages loaded with useful information attract human visitors and search engine
spiders. !ood information turns your site into an authority site on the %eb so
customers feel more comfortable buying from you.
( L. -reate thumbnail images and link them to full-si+e photos of the product. 7ven if you
can post life-si+e images of your product from several viewpoints don't place
them on the main informational page. Instead create thumbnail images the link to
the larger photos. Aisitors with slow dial-up connections will thank youF
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( Integrate marketing communications means the firm must develop on overall
global IM- program. 7ach country or each region requires some fle#ibility in
order to adapt marketing activities including consumer promotions to fit local
needs.
( &lthough the desire may be to centrali+e global consumer promotions program
this process can be difficult. -ustoms laws and views toward various type of
sales promotions differ throughout the world. 7ven within 7urope the laws
governing consumer promotions are not consistent. /or e#ample in /rance and
7ngland contests offering free pri+es are legalM in !ermany the 4etherlands and
the >elgium they are illegal. -oupons which are common in the 9nited States
are legal in all 7urope countries e#cept !ermany.
( -oupons are not as prevalent in the 9nited States. -ulturally coupon redemption
is associated with being underprivileged in 7ngland. -ustomers fear that using
coupons will causes the cashier to judge them to be poor and needy. Still coupon
redemption rates are higher in 7urope than they are in the 9nited States.
( -ontests and sweepstakes are successful in many countries. Marketers must be
careful to research the laws regulations and most importantly consumer attitudes
toward contests and sweepstakes. & cultural assimilator helps the company assets
the potential impact of local attitudes toward the contest.
( In order to manage the consumer promotion function within a global market
successfully a company needs an e#perienced international sales promotion
coordinator are$
( .romoting the transfer of successful consumer promotion Ideas among the
company,s brands from one country to another.
( .roposing and soliciting ideas for consumer promotion within and across each
region or country.
( 3eveloping and presenting training on consumer promotion planning to each local
region that is responsible for developing them.
( !athering performance data on each sales promotion program and making the
information available to each regional sales promotion manager.
( 3eveloping methods for measuring the effectiveness and efficiency of the various
consumer promotions.
( -oordinating relationships with all sales promotion agencies that are being used.