SALES PROMOTION

SALES PROMOTION

Advertising gives reasons to buy

Sales promotion gives the incentive to buy

Sales

promotion is an important part of the marketing mix

Sales promotion, also termed as a below the line activity,

aims at achieving the sales target

It is a promotional method that usually includes the

temporary offer of a material reward to customers by way of
a discount, a coupon, an additional product, a holiday
package, or a meeting with a celebrity, among various other

schemes.

SCOPE AND ROLE OF SALES

PROMOTION

A great spurt in sales promotion activities of various

players, both in the FMCG sector and White Goods.
In a fiercely competitive world, non-expanding markets,
and, above all, the increasing power of the large retail
chains
marketers have to shell out incentives for retailers
promotional schemes for buyers before retailers
to sell their merchandise.

and
agree

Consumers are attracted through sales promotion offers

Retailers also stock more products as they earn extra
commission in the bargain.

The success of a scheme depends on a number of factors

that include:
novelty of the scheme,

the arousal of interest in the prospect,

the value it offers to the consumer,

FACTORS FOR SUCCESS OF SALES PROMOTION

convenience and simplicity of required response, etc.

SALES PROMOTIONS
Strategic considerations for decision making
When does one need advertising or sales promotion are
issues of strategic considerations.
Why marketers opt for sales promotion?
Growing

Power of Retailer

Declining

Brand Loyalty

GROWING POWER OF RETAILER

Retailers

have become more knowledgeable due to

greater access to technology and database.
They

have a finger on the customers pulse,

- knowing on a day-to-day basis what kinds of

people are buying what kinds of products, and
- which products get picked up faster than
others.

DECLINING BRAND LOYALTY

The trends indicate that price, value, and

convenience have adversely affected brand loyalty.
Brand proliferation and difficulties in perceiving
attribute differentials: An average buyer goes for
products she/he perceives as value for money.
With the fragmentation of markets and mass media
becoming less popular due to clutter and increasing
tariffs, companies look for accountability and
immediate results.

SALES PROMOTION AIMED AT

TRADERS
The main goals of promotional activities aimed at
traders include the following:
to

encourage storing manufacturers merchandize in

the store
to ensure a higher level of visibility of the
merchandize vis--vis other similar products

to enthuse the trader to push particular

merchandize at the cost of competitive products

to create excitement to reach target sales among

traders

to build loyalty for manufacturers, in case of stiff

competition

VARIOUS FORMS OF SALES

PROMOTIONS

TRADE DEALS
Manufacturers offer
discounts,
free goods (for instance, if traders stock ten cases of a
product, two may be given free),
incentives of higher commissions if a target is reached,
gifts in kind,
holidays in exotic places,
better credit facilities to traders to push products

COOPERATIVE ADVERTISING TIEUP

Cooperative advertising tie-up aims at encouraging

traders to advertise manufacturers products locally
to attract area-specific customers.
Many companies, especially in the consumer durables
category, encourage such tie-ups.

Retailers, as part of various sales promotion schemes,

regularly promote popular brands.

PARTICIPATION IN TRADE FAIRS & TRADE

SHOWS

Traders form the backbone of a companys supply

chain.

In order to educate them about the latest techniques

and displays, many manufacturers take their traders
to trade fairs, seminars, and workshops.
This helps manufacturers to provide them with the
right exposure, besides building a rapport with them.

DIRECT STIMULATION BY TRADERS SALES

TEAM

In this scheme, the sales team of a retailer is encouraged

to push the brand of a particular manufacturer amidst
many competing brands. Companies provide special
incentives to such people.

At other times, retailers allow a salesperson from a

company to work along with their retail team. This helps
the company to ensure that its representative will push the
particular product harder.

POINT OF PURCHASE
Point of Purchase, commonly known as POP, forms a very
significant part of sales promotion schemes.

POP

material is referred by experts as an extension of the

advertising campaign. It connects with the customer and
helps to reinforce the brand message.
POP materials include banners, signs, dispensers, racks,
display cartons, price cards, etc.

Push money

Also known as spiffs is a monetary benefit paid to a retail

outlet based on the units sold over a period of time

Dealer Loader

This is a premium given by a manufacturer to a dealer for

buying a certain quantity of merchandize

Industry tie-ups

Tie-ups between and among business partners are organized

to promote certain products.
For example, a customer could buy a fridge of a particular
brand and get an iron of another brand as a gift.

SALES PROMOTION AIMED AT END-USER

The

goal of sales promotion aimed at the end-user, i.e.

consumer, is to excite him/her about the brand and the value
it brings.
An

attractive sales promotion scheme is able to pull the

consumer to the retail outlet and make him/her buy a
product which he/she may not necessarily need at that point
of time..

PRICE DEALS

Price Discounts Or Price-off Deals

These normally include some money off on a product.
Colgate

fresh energy ice blue gel (Colgate India) 50 gm pack, Rs. 5.50
off on normal price, now available at Rs. 26.50 only

PRICE DEALS
Price Pack Deals- Bonus Pack
In

case of a bonus pack, an additional quantity of the same

product is offered free when the standard pack size of the
product is purchased at the regular price.

Sunsilk shampoo (HUL) 400ml bottle gives 33% more free.

Dettol shaving cream gives 40% extra free.
Bisleri 20% extra free (Bada Bottle, Same price)

PRICE DEALS
Price Pack Deals- Banded Pack
The

Banded pack is when the marketer develops special packs of the

product containing more quantity but the price is proportionately low. This
is a method to load the consumer up with the product.
This

technique is often used to introduce a new large size of the product or

to encourage continued usage and also to increase consumption.
When

2 or more units of the products are sold at a reduced price compared

to the regular price, that offer is also termed as banded pack.
Another

variation of this technique is buy 1 get 1 free or some similar

offer, it could be same for less or more for the same, in terms of units.
Example: Fairglow soap buy 3 get 1 free

COUPONS
A coupon entitles a buyer to a designated reduction in price for
a product or service.
Coupons are the oldest and most widely used form of sales
promotions.
Coupons bear an expiry date and cannot be redeemed after the
cut off date.
The main advantages of coupons are:
1.Encourage brand switching
2.Stimulate trial for a product
3.Take off the attention from price
Fair and Lovely dark circle removal cream to create more product trials had
coupons in the newspapers and magazines which availed consumers of Rs.10/off on a 40 gm pack

Contests and Sweepstakes

Contest: I like the product because and the best one win prizes
These schemes offer a chance for participants to get
something for nothing, based on some sort of skill or
ability.
e.g. Lays, Kurkure, Maggi, Airtel

Sweepstake: A sweepstake is a promotion in which winners

are determined purely by chance.
Consumers need only to enter their names in the
sweepstakes as a criterion for winning. Some popular
types of sweepstakes also use scratch-off cards.
e.g. Britannia khao world cup jao campaign
Under the offer one could collect points available on Britannia biscuit packets and
exchange 100 points for a scratch card, which had various gifts and the 100 world
cup tickets

Refunds and Rebates

Refund offers 100% money back/refund in case of
dissatisfaction after a purchase.
Taj mahal Tea guaranteed its taste by openly telling the public of its
offer that agar chai pasand nahi aaie, toh pure paise vaapas!

Rebate could be a coupon issued for the next purchase.

This ensures that the shopper returns for the second
purchase to avail of the rebate. Fast food giants use these
schemes often.

Premium offers
These schemes tie up an attractive gift with a product.

New products are given free with established brands to

stimulate trial of the new brand
Ponds

free.

Buy Ponds cold cream 100ml and get a Ponds body lotion 50ml pack

Pepsodent
Buy

toothpaste buy 100gm and get 4 Clinic Plus sachets free.

a Fairglow fairness cream and get a mirror free.

Many

other kids products are influenced a lot by specialties especially liked

by the kids like tattoos, masks, cricket bats, etc.

Specialty Items

Many companies present specialty items to its patrons on

festive occasions, either free of cost or at a reasonable
price.

Continuity Programs

These call for continuous purchase of a product or use of a

service. Many airline companies have frequent flyer
schemes that include seat upgrades, free companion tickets,
etc. These schemes are generally based on points generated
on mileage.
Shoppers stop started the First Citizens Club and enrolled customers as
members of the shoppers club by charging a fee of Rs.150. The
customers were entitled to a variety of benefits by collecting points.

Consumer Sampling

This scheme allows consumers to try or sample a product

before he/she makes up his/her mind to purchase the
product.
Sometimes, companies sell new products at a discount,
generally referred to as an initial offer to allow more people
to try the product

EXCHANGE OFFERS

Consumer durables market is the one where exchange

offers are used the most. Almost all the TVs,
Refrigerators, Washing Machines, etc. have exchange
offers.
On exchanging old refrigerator for a new Samsung refrigerator, upto Rs.
8000 off.

A FEW EXAMPLES

Gillette