Sales promotion is a key factor
& strategy for marketers within the promotional mix. Sales promotion refers
to many kinds of incentives & techniques directed towards consumers &
traders with the intention to produce immediate or short term
effects. Sales promotion helps in stimulating trial or purchase by final
customers or others in the channel. A marketer can increase the value of its
Product/ Service by offering an extra incentive to purchase a Product/ Service
or brand. A few definitions are quoted below:-
Institute of sales promotion, U.K. – “Sales
promotion comprises that range of techniques used to attain sales/marketing
objectives a cost effective manner adding value to a Product/ Service or
service either to intermediate or end users, normally but not exclusively
within a definite time period”.
Sales promotions have 3 distinct
characteristics –
(a) Communication – They gain
attention & usually provide information that may lead the consumer to the
Product/ Service.
(b) Incentive – They give certain
concession, inducement or contribution that gives value to the consumer.
(c) Invitation – They invite a
distinct invitation to engage in the tre.
Nature of sales promotion:-
1. Irregular / non recurring
activity- Sales promotion is an irregular & non recurring activity to
increase the sales & this technique is used for specific situations only
such as decline in demand, fall in profit, acute competition in the market or
during the introduction of new Product/ Service in the market.
2. Target- The target for producer’s
sales promotion may be middleman, end users, household or business users or the
producer’s own sales force. Middleman sales promotion at their sales people or
prospects further down the channel of distribution.
3. Motivation & extra incentive-
Sales promotion involves some type of incentives that offer a reason to buy.
This incentive is usually the key element in a promotional program & is an
effort by which consumers, traders and sales force are motivated towards maximum
sales.
4. Acceleration tool- sales
promotion is designed to speed up the selling process & maximize sales
volume.
5. Immediate impact- Sales promotion
can be implemented quickly & gets sales results sooner than advertising
sales promotions offers an incentive to buy now.
6. Objective- The objective of sales
promotion is to establish a link & coordination between the activities like
advertising, personal selling, publicity etc. sales promotion bridges a gap
between advertising and personal selling.
7. Non media activity- Sales
promotion is referred to as a non media activity as sales promotion is
differentiated from advertising & publicity & also includes them as
part of the overall promotions mix.
8. Strategic role- Because of the
immediate nature of the impact, sales promotion have been thought of as merely
this view is changing and the strategic role of sales promotion and their
integral role in the promotional mix are being recognized.
9. Planned activity- The fact that
sales promotion can be effective throughout the life of a brand shows their
strategic role. Sales promotion activities should be planned well to stimulate
sale.
10. Versatile- Sales promotion is
extremely versatile. The different forms of sales promotion are capable of
being used with various groups & designed to achieve different effects.
Sales promotion can be useful throughout the Product/ Service life cycle.
11. Means of marketing
communication- It is an important means of communication by which views &
ideas of consumers about the Product/ Services & services are exchanged
with the producers regularly.
12. An element of promotion mix-
Sales promotion is one of the important elements of promotion mix, other than
advertising, personal selling and publicity.
13. Universal activity- It is a
universal activity adopted by all the economies of the world in their sales
efforts.
Role of sales promotion:-
1. To popularize goods and services
of the producer among the potential consumers & to motivate them towards
larger purchases.
2. To motivate the existing
customers for maximum purchase.
3. To maintain the sales up to
normal level even during seasonal vacations & during the declining stage of
PLC.
4. To increase goodwill of the firm.
5. To educate customers/dealers
& salesmen about the techniques of sales promotion.
6. To simplify the efforts of sales
force & motivate them for larger purchase.
7. To stimulate maximum sales on
special occasions such as Diwali, religious festivals & other such
occasions.
8. To search for a new market &
to introduce new Product/ Services in to the market.
9. To counteract competition.
10. To facilitate coordination &
proper link between advertising and personal selling.
11. To promote larger sales in
certain specified segments of market.
12. To present a counter promotional
program against the competitoBDT
13. To develop patronage habits
among customeBDT
14. To prove the Product/ Service
better in quality & useBDT
Importance of sales promotion:-
Sales promotion is an important
component of the marketing program . It can be a specific tool of the
promotion. Quality sales promotion provides advantages to the various groups
described below:-
1. Importance to consumers
2. Importance to produceBDT
3. Importance to middlemen.
4. Importance to society &
nation.
1. Importance to consumers:-
(i) Availability of new Product/
Services- It is easy to sell new Product/ Services with the help of sales
promotional tools. Hence the producers are encouraged to bring new Product/
Services.
(ii) Various rebates & free
discounts- Sales promotions offers various incentives like rebates & free
discounts, free samples which helps to stimulates sales & purchase.
(iii) Thrill in life- The various
incentives contents samples, demonstrations, fair and exhibitions create thrill
and joy in consumer’s life and the relish these beneficial offeBDT
(iv) Low price- Sales promotion
increases sales volume and reduce the unit cost of Product/ Serviceion &
thus the prices reduce & it benefits consumeBDT
(v) Increase knowledge- Sales
promotion increases the knowledge of the consumers with regard to the uses,
operation & maintenance of the
Product/ Service.
(vi) Provide higher standard of
living.
(vii) Buying confidence- Sales
promotion tools provide the consumers an opportunity to understand the Product/
Service. This creates a buying confidence among consumeBDT They may take better
buying decisions which ultimately increases their satisfaction level.
(viii) Minimize exploitation- The
promotional plan creates a better knowledge about the Product/ Services, their
uses & quality. As a result, the seller can’t exploit the consumeBDT
2. Importance to producers:-
(i) Increase in sales- Sales
promotion attract consumers & stimulate them to make larger purchaser.
(ii) Improve effectiveness of Media
Activities- the sales promotions plans make the advertisement & other media
activities more effective to achieve the sales largest these give pulling power
to ads.
(iii) Help personal selling- sales
promotions supports personal selling process the salespersons can use
demonstrations , distributions to free samples , contest methods to push the
sales. Sales promotion aimed at company’s own sales force might motivate
salesmen to get new costumers, selling a Product/ Service.
(iv) Able to capture new market.
(v) Increase regular sales &
seasonal Product/ Services.
(vi) It helps in increasing goodwill
of the firm.
(vii) The various promotional
incentives offered to the dealers help to achieve cooperation from them to sale
the Product/ Services & to maintain maximum stock with them.
(viii) It is an effective step to
face the competition.
(ix) It helps in increasing the
demand of new Product/ Services.
(x) It helps in maintaining existing
customeBDT
(xi) It creates a trusting attitude
among customeBDT Free sample & functional demonstrations creates a faith in
the use of merchandise which results in longer sales.
Importance to middlemen / dealers:-
(i) Facilitates longer sale.
(ii) By operating various sales
promotional plans, manufacturers provide various type of helps such as rebates,
trade discounts, gifts, rewards to dealers & reselleBDT
(iii) A direct relationship between
the dealers & the customers are established through the sales promotion
techniques which will continue for a long term.
(iv) As the cost of each deal is
reduced the profits of dealers are also increased.