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Conventionally, the glamour in promotion is stolen by advertising. Point-of-purchase displays give a real payoff, sales rising by 25 to 50 per cent or even more. Trade-oriented sales promotion programs are directed at the dealer network of the company to motivate them to sell more of the company’s brand than other brands. There is an effort to integrate promotion with the core brand values. Specific marketing objectives – If these objectives are spelled out clearly, an effective solution can be conceived. But healthy promos will strengthen the brand. Personal meeting with the executives are arranged. To help launch a new product (say Cello instead of Hello on telephone and get the gift, identify independent personality and get the Alphonso mangoes). Since late 2000, there has been a conscious attempt to curtail the promo expenditure and use the funds to build the brands. Sales promotion, in other words, is a marketing activity that adds to the basic value of the product or services for a limited period of time and directly stimulates purchasing by the target audience. It consists of mostly collection of those short-term incentive tools, which are designed to stimulate purchase of a particular product or service. This involves offering products to consumers at discounted or reduced prices by a certain percentage from the regular price of the product. The marketer has to determine the size of the incentive, conditions for participation, duration of promotion, the distribution vehicle and timing of promotion, total sales-promotion budget and the incentive cost in order to arrive at a full programme. The themes could be creatively chosen. We can use cost-sales ratio to evaluate a promo. Promos can become strategic if they are supported by other elements of the marketing mix. Some sales promotions are aimed at consumers. SP designed to suit local market conditions is more effective. Sales promotion activities include special offers, displays, demonstrations, and other nonrecurring selling efforts that aren’t part of the ordinary routine. 4. Direct themes could be obtaining new accounts or improving the market share. If you can sell it, probably you can sell anything. Promos magnify brand value continuously. Let’s hunt for the hidden treasure (find new customers). The intention is to increase sales, make a large customer base, encourage trial, encourage repeat purchases to stimulate consumers' purchase. 9 Types of Consumer Sales Promotion Tools, Aggressive Selling | Meaning | Aggressive vs Defensive | Circumstance | Methods, Different Approaches to study of Marketing, Terms of Sale | Different types of Quotations in International Trade, Factors to be considered in export packaging design, Top 10 Differences between Wholesalers and Retailers, Chain Stores | Meaning | Advantages | Disadvantages, Weaknesses of Trade Union Movement in India and Suggestion to Strengthen, Audit Planning & Developing an Active Audit Plan – Considerations, Advantages, Good and evil effects of Inflation on Economy, Vouching of Cash Receipts | General Guidelines to Auditors, Audit of Clubs, Hotels & Cinemas in India | Guidelines to Auditors, Depreciation – Meaning, Characteristics, Causes, Objectives, Factors Affecting Depreciation Calculation, Inequality of Income – Causes, Evils or Consequences, Accountlearning | Contents for Management Studies |, a product that is not superior in some way to competing products, a product with a narrow margin of profit, or. 5. The manufacturer of Sensodyne has been reaching out to local dentists of Mumbai who have been distributing free samples of these toothpastes to create awareness among their patients. It is not an expenditure, it is an investment which can pay rich dividends. The nature of promos changed. The annual expenditure for sales promotion is rising rapidly. They are non-recurring in their use. The mix between sales promotion and advertising is a matter of strategy. Retailers have to exert more to handle promos. These tools are unique in their way and directed differently to these three groups. This involves planning, designing and modifying programme, etc. Consumer level sales promotional tools are: (d) Self-liquidating premium (item sold below its normal retail price). All these sales promotion schemes work on the principle that few people can resist a free gift, price reduction or special offer. Promos have certain limitations. Lakme uses couponing for its premium Orchid range. Many of you must be confused about promotion and sales promotion. The Sales Promotion tools are directed towards Consumers (Consumer promotion tools), Dealers or middlemen (Trade promotion tools), and Sales force. It is an additional financial reward to sales force (or salesmen) for achieving sales beyond a pre-determined level. 5. Premium is generally offered for consumer goods such as soap, toothpaste, etc. What about sales returns after the contest period? The No. The company made Ogilvy writes a manual for other salesmen. The seller determines the number of installments in which the price of the product will be recovered from the customer. Such salesman are sales-force. 2. Apart from inducing trials, coupons are used to retain the existing customers. We can get access to a new segment in which customers buy our product, in combination with the product they normally use. 3. There is no consumer empathy with the brand. (ii) Allowances like advertising allowance or display allowance. Cash refund offers are rebates allowed from the price of the product. A sweepstakes calls for consumers to submit their names for a draw. At the level of sales representatives, SP tools are incentive programmes and sales contests of representatives. (b) The terms / schemes should discourage unscrupulous trade practices on the part of trade. It also builds a top-of-the-mind awareness. The result of an effective total marketing programme is sales success, which entirely depends on positive customer reaction and an intense, well organised selling effort by resellers and salespersons. (c) Scheme should be properly communicated. Sales promotion is thus a part of promotion, and is restricted to direct inducements on a short-term basis given to consumers or trade so as to stimulate purchases of products and services. Samples help consumers verify the quality of the product. Allowances are granted to buyers on the basis of their previous purchases. What issues and problems can arise in different country markets? The accountability of redemption of coupons or refunds and rebates should be properly fixed. Customer Sales Force Structure: The sales force is organized along customer or industry lines. Product Sales Force Structure: The sales force sells along product lines. The big three advertising groups are WPP, Interpublic and Omnicom who put together, account for 43.7 per cent of global advertising and marketing services. 1. Demonstration is required when products are complex and of a technical nature. Contests are the promotion events that give consumers the chance to win something such as cash, trips or goods. Sales promotion refers to temporary incentives offered by an organization to either their customers or their resellers, with the intention of increasing the sales of their products. 5. The Govt. Therefore, it is necessary to classify sales promotions into two broad categories – sales promotions aimed at consumers and sales promotions aimed at distribution channels (which is more commonly referred to … While advertising explains the logic behind buying, sales promotion offers us an incentive to do so. Sales promotion strategies can be divided into three broad types. A trade promotion can be easily managed through a company scheme mailer / circular and a one-to-one presentation by the sales force to the distributor and dealers. (iii) Free goods on a certain quantity, push money and free speciality advertising items. (ii) The trade is motivated to carry a larger inventory. “Working in sales” can refer to a number of different types of sales roles; you may be surprised by the variety of options available. To develop favourable consumer experience with the product. There were magazine samples, internet promos, contests and coupons in consumer durables. We should pre-empt competition in using the promos. a highly fragile, perishable or bulky product. It covers those marketing activities other than advertising, publicity, and personal selling that stimulate consumer purchasing and dealer effectiveness. These are – Pull Strategy – The pull strategy attempts to get the customers to ‘pull’ the products from the company. Why Use Sales Promotion? Akai, Daewoo, Philips, Samsung, Rayban, Van Heusen and Maruti have come out with exchange offers. Contests are conducted to attract new customers. Examples of promotions … 7. For example- sales up to Rs. (a) When established brands have a declining market. Promos can be evaluated by comparing sale volume across 3 time periods – pre-promo, during the promo, post-promo. At the point of purchase, the only promotional device is SP. Surprisingly, a wide range of below-the-line activities account for a large share of the total promotional mix all over the world. Learn about:- 1. One maxim is, do promote, but not at the cost of brand equity. Briefly review how the main tools of sales promotion (e.g., sampling and couponing) can be used in global markets. Phoenix International, the Delhi-based shoe company has been offering four pair of shoes with every purchase of Rs.1,500 and two pairs with a purchase of Rs.800. (i) To examine the sales data, before, during and after a promotion, (ii) To examine the consumer-panel data which would reveal the kinds of people who responded to the promotion, and. Free in mail premium means a premium item will be sent by mail to consumers who present proof of purchase to the manufacturer. Sales force is linking between companies and customer. The brand which is constantly on sales promotion is vulnerable to a better offer. Soon, thereafter, further activities are planned to avoid dipping sales later after the closure of the contest. Advertising messages may promote the adoption of goods, services, persons, or ideas. Luich and Ziegler define sales promotion as ‘a direct inducement which offers an extra value and incentive for the product to the sales force, distributors, or the ultimate consumers’. (f) The gifts should be of good quality and useful. There is a risk of brand devaluation if SP is done in excess. It can arouse enthusiasm, create a buying mood or spark an immediate reaction from consumers, dealers and the firm’s salesperson. Cash refunded offer is stated on the package. Intangible benefits, e.g., charity or personality associations. Consumer promotion takes care of the strong competitive brand. Rewards may be in cash or in kind or a mix of the two. 1. An ongoing promotion, e.g., low prices everyday becomes a part of the brand property or normal trade practice. 1. The scheme must be novel and innovative. Each position has different parameters for success, skill requirements, experience requirements, and other distinctions. Studies on SP give us the following guidelines: 1. 2. Advertising agencies accord low status to sales promotions and usually employ junior staff for sales promotion so that they may be trained for more creative jobs. How does a company choose their sales and marketing philosophy? Sales promos are now related to brand building, keeping additional sales volumes just incidental. 6. Direct marketing is used to send coupons to a selected list of users. Pre-testing is done by panel method, or by mail survey or by a field-study. Samples are one of the most important tools of sales promotion. Samples. It gives extra incentive to the customer to make a purchase. Contest prizes are becoming attractive. 6. Without reducing the retail price, a marketer provides consumer promotion when raw material prices are reduced. A reusable container can be reused after the product is reused. In short, sales promotion is a bridge or a connecting link between advertising and personal salesmanship, the two wings of promotion. To increase sales of any product, producers adopt different measures like distributing samples, gifts, coupons, bonus, etc. Designing of the Sales Force. Sometimes, samples are attached to another product. Producers can organise competitions or contests among salespersons to encourage them to generate more sales from new customers. Samples should be correctly targeted, or else they go waste. 6. These samples may be distributed door-to-door (through personal selling) or retail stores. The types of sales promotion techniques used by the company depend upon the sales promotion objectives set by the company. Many sales promotion campaigns involve the use of incentives. It also affects the brand equity. They should be small enough to fit in the package. Those tools which carry a selling message from one category, e.g., free samples, coupons, gifts related to the product, form one category. When the decision is to discontinue a product, or close down the business. Incremental sales are difficult to obtain for brands having a large market share. Sales pro­motion is generally broken into two major … Establishing the Sales-Promotion Objectives, 3. They are to be used at the right time in the right measure. Novel themes – the focus is on recreation and fun linked with the current sales scenarios. The quality must be specified. (h) POP material and its display need supervision. With more and more brands flooding the market, the pressure to occupy display space at retail outlets is more. 5. Additional value covers – money, e.g., reduced prices, free sample, extra value. It is an integral part of the marketing effort. To gain additional market share or additional revenue. 8. Pre-testing ascertains cost-effectiveness of various alternatives. Consumer promotions are directed towards the consumer and are strongly prevalent in the FMCG category. Techniques 12. An important area that concerns sales promotion objectives is directly related to the specific promotional techniques to be used. Coupons are used for consumer convenience goods. By themselves, they cannot build brand perception. It is to be seen that where a contest does not contravene the MRTP Act, and does not come under the unfair trade practices. This can be done by asking the consumers to rate or rank different possible or trial tests that can be run in limited geographical areas. In the mid-90s, promos were just some trivial giveaways. The contest will be held on a branded channel on Youtube and will use other social media like Facebook and Twitter. Brand expectations are built by Ford by asking participants to identify celebrities inside the car, and to win a foreign trip. The details of the promo must be worked out carefully. Same prizes for each contest are to be avoided. Sales promotion is defined by the Institute of Sales Promotion (ISP) as “comprising a range of tactical marketing techniques within a strategic marketing framework to add value to a product or service in order to achieve specific sales and marketing objectives”. Sampling is likely to result in actual trial of the product in global markets. 2. It may dilute the carefully cultivated brand equity. (e) Booking of shelf-space of prominent dealers must be done sufficiently in advance. When new products are launched, the ads may carry coupons of price-offs to induce trials. To increase buying response by ultimate consumer, and 2. Sales Promotions is one of the important elements of the marketing promotion mix or the integrated marketing communication. There was a joint concert of Nescafe and Samsung. Some pitfalls which management must guard against: 2. 25 per cent budget is dedicated to BTL. The direct inducements cover a whole package of coupons, price-offs, premiums, larger quantity trading stamps, free gifts, displays, shows, expositions and demonstrations. The first difference is Personal Selling is an element of promotional mix, where salesman visits the customer and displays the goods in order to initiate purchase. IFB is offering a gas stove and a gas lighter on two of its washing machine models. Sales promotion is that “something extra” (2 + 2 = 5). 8. To stimulate replacement demand, a company gives a certain amount of the price of a new product in exchange of the old product. This activity aims at attracting consumers to other or newer brands, seasonal and unseasonal goods. Timely interven­tion in the form of reminder ads, additional deployment of sales force, additional POP material, etc., may sometimes be necessary. In a contest, individuals should not be pitted against each other. Clients also expect the agencies to offer them BTL without paying for these services, but just as value-add-ons. Too much of it affects the long-term brand equity. Sales promotions are a marketing communication tool for stimulating revenue or providing incentives or extra value to distributers, sales staff, or customers over a short time period. Competitive pressure also calls for the use of SP. Sales Promotion Objectives: Increase in Sales Volume, Encourage Repeat Purchase and To Block Competitor Moves Sales Promotion Objectives – Top 7 Objectives: Launch New Products and Increase Trail, Encourage Dealers to Participate in Display and a Few Other Objectives. One has to communicate with the consumer through advertisements and POPs at the retail level. Need and Importance 5. The original price and the bargain price must be stated. Salesforce promotion techniques are used to motivate salespeople to put in more efforts to increase sales, increase distribution, promote new or seasonal products and build up morale and enthusiasm of Salesforce. Producers / retailers may promise free service to consumers for a specified period of time after sales. Options of Promotion Objectives 9. The most prominent reason is an emphasis on quarterly results expected of senior management. Personal selling is an integral part of the firm’s communication mix which is made up of non personal communication tools. Premium products are sold on pull factor, and a promo works on a push factor. For example- The Confederation of Indian Industry (CII) organises several business and trade fairs on specific industries. Free samples are small and packaged portion of the (main) merchandise distributed for free. Instant gratification is what the users of FMCG brands seek from promo. Many sales promotion campaigns involve the use of incentives. These rewards can be given for individual performances and for special achievements. Promotions differ from advertising in that advertising offers reasons to buy, while promotions offer incentives to buy. Types of Programs 7. (3) Business Promotion- Through exhibitions, trade fairs and conventions. Meaning and Definitions of Sales Promotion: Sales promotion is said to be a key ingredient in the international marketing campaign. Advertising is salesmanship in print, but has moved too far from it. To get you started with this worthwhile strategy, here are 15 sales promotion ideas, accompanied by real examples, and categorized by the business goals they can help you achieve. Planting the gold (sell more profitable product mix). 4. Mostly, either it is a price related scheme or bundling of a package. On the contrary, such promotion delays further repurchases. Copyright 10. “Marketing Management” Sales Force and Promotion Prepared by: Jonah C. Pardillo 2. User 6. (b) When there are no product improvements. Another reason for the rise in BTL is the lead given by the market leader such as HUL who would like to battle the slowdown of their top-line. In using sales promotion, a company must establish the objectives, select the tools, develop the programme, pre-test the programme, implement and control it, and evaluate the results. Huge Collection of Essays, Research Papers and Articles on Business Management shared by visitors and users like you. Contest is not an intelligence test, and so should be absolutely clear. Make your customer fat (sell more to the existing customer). For the sales force, objectives include encouraging support of a new product or model, encouraging more prospecting, and stimulating off-season sales. Marketing managers use sales promotions to stimulate buying and increase consumer interest in a product. Trade incentive could be price off, free goods and allowances. A shorter definition could be- “The practice of offering a temporary additional value to a brand in order to reach specific marketing objectives”. 3. The market price of the product should not be increased before the promo so as to include the cost of the gift. move to levy excise duty on the maximum retail price of consumer durables may affect the discounts and promotional schemes. Components 4. Being a competitive world, most companies use a combination of various sales promotional methods to defeat competitors, attract and retain customers and most importantly, to increase the sale of their products … Sales promotion is often thought as special aggressive selling efforts to accelerate sales. Sales promotion tries to complement the other means of promotion given above. 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