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
- To
stimulate immediate buying and trial of new products.
- To
encourage brand switching by offering temporary value.
- To
increase product usage (e.g., larger packs, multiple-unit offers).
- To
create urgency and quick purchase (limited-time offers).
B. Objectives Toward Intermediaries
(Dealers, Wholesalers, Retailers)
- To
encourage stocking and display of company products.
- To
increase shelf space and visibility.
- To
motivate retailers to promote the product actively.
- To
strengthen trade relations and loyalty.
C. Objectives Toward Sales Force
- To
boost morale and motivation through contests and incentives.
- To
encourage achievement of sales targets.
- To
introduce new products effectively to customers.
- To
improve coordination between marketing and sales teams.
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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