Sales Promotion

Sales Promotion


Introduction

Sales promotion is a key element of the promotion mix that refers to short-term incentives and techniques aimed at stimulating immediate sales or demand for a product or service.

  • American Marketing Association (AMA):
    "Sales promotion includes all marketing activities—other than personal selling, advertising, and publicity—that stimulate consumer purchasing and dealer effectiveness."
  • Philip Kotler:
    "Sales promotion consists of short-term incentives to encourage the purchase or sale of a product or service."

Objectives of Sales Promotion

A. Objectives Toward Consumers

B. Objectives Toward Intermediaries (Dealers, Wholesalers, Retailers)

C. Objectives Toward Sales Force

Major Decisions in Sales Promotion

1. Setting Objectives

  • What is the company trying to achieve?
  • Examples: boost short-term sales, launch a new product, clear old stock, increase brand awareness.

2. Selecting Tools

  • Decide which sales promotion tools suit the target group: coupons, samples, contests, trade allowances, price packs etc.

3. Developing the Programme

  • Determine the incentive size (discount %, free quantity, reward value).
  • Set conditions of participation (purchase requirement, eligibility).
  • Decide duration and timing (seasonal, festival, off-peak).
  • Plan distribution method (in-store, online, direct mail, digital apps).

4. Pre-testing the Scheme

  • Small-scale testing ensures that the chosen tool appeals to the audience and is cost-effective.

5. Implementing the Programme

  • Involves coordination between marketing, distribution, advertising, and sales teams.

6. Evaluating Effectiveness

  • Measure results through sales data, customer response rate, redemption of coupons, dealer participation, and ROI.

Consumer Sales Promotion Tools

1. Samples

  • Free trial of a product in small quantity.
  • Effective for new product launches (e.g., shampoo sachets, food tasting).

2. Coupons

  • Certificates offering price reduction or special deals.
  • Can be distributed via newspapers, packaging, online, or apps.

3. Price Packs (Discounts)

  • Temporary reduction in price (e.g., “₹20 off” or “Buy 1 Get 1 Free”).
  • Encourages immediate buying and larger volume purchases.

4. Premiums (Free Gifts)

  • Articles offered free or at a low cost with purchase (e.g., toys with cereal, mugs with coffee).

5. Contests, Sweepstakes, and Games

  • Competitions where customers participate and win prizes.
  • Encourage brand interaction and engagement.

6. Point-of-Purchase (POP) Displays

  • In-store promotional material (posters, banners, digital screens, end-aisle displays).
  • Attract attention at the buying stage.

7. Demonstrations

  • Live demos in malls, supermarkets, exhibitions, or online to show product usage.

8. Rebates (Cash Refunds)

  • Partial refund offered after purchase, usually on big-ticket items (e.g., electronics, appliances).

9. Loyalty Programs

  • Reward systems like points, discounts, or gifts for repeat purchases (e.g., airline miles, grocery cards).

10. Free Trials

  • Allow consumers to use a product for a limited period before buying (common in software, fitness apps, subscription services).

11. Event Sponsorships and Tie-ins

  • Linking brand promotions with events, festivals, or cross-branding.

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