Free in mail premium means a premium item will be sent by mail to consumers who present proof of purchase to the manufacturer. One study suggested the following reasons for undertaking actively all forms of sales promotion: 1. Sales promotions have temporary and short life not exceeding three months. Sales Promotion Schemes. 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. Sales promotion directed towards the sales people is referred to as sales force promotions. It should not be easily capable. Promotion can be launched directed at consumer or trade. But with companies becoming more market oriented, a customer-focused sales force also works to produce both customer satisfaction and company profit. Creating talking points for salespersons. There are three kinds of sales promotion. This structure can lead to problems if a single l arge customer buys many different company products. In the Colgate-Pepsodent war, recently both Colgate and HLL offered coupons for a free tube of toothpaste. Meaning 4. 3. A premium may be inside the package, outside it or received through mail. Contests are conducted to attract new customers. The types of sales promotion techniques used by the company depend upon the sales promotion objectives set by the company. Briefly review how the main tools of sales promotion (e.g., sampling and couponing) can be used in global markets. It is not the BTL that weakens the brand, but below-the-belt does, e.g., price promotion where two pieces are offered for the price of one. To clear unsold stocks of an old product. Agencies of late have set up BTL divisions, but these lack depth. Essays, Research Papers and Articles on Business Management, Sales Promotion: Objectives, Importance, Techniques, Examples, Methods, Types and Tools, Top 8 Tools of Sales Promotion (With Advantages and Disadvantages), Sales Promotion: Meaning, Merits, Limitations and Methods, Advantages and Disadvantages of Franchising. What would be the role of promotion-mix depends directly on the marketing strategy, and on the marketing objectives. 3. Concept of Sales Promotion 2. In this age of intense competition, where the bottom line is quick sales, marketers are beginning to rely more and more on short term tactics to win the battle for consumer’s minds and wallets. The present contest will earn the winner a fellowship during which the winner will help Ogilvy write a guide to selling in the 21, Sales Promotion – Sales Representative Level Promotion, 1. There was a joint concert of Nescafe and Samsung. Upgrade existing accounts to high ticket products. Sales promotion is generally defined as those marketing activities that provide extra values or incentives to the sales force, the distributors, or the ultimate consumer and can stimulate immediate sales. They have seldom reuse values. Before uploading and sharing your knowledge on this site, please read the following pages: 1. Sales Promotion in International Marketing! To add extra value to the product and develop brand franchise. 3. So basically, these are different tools with purpose of encouraging consumers, dealers as well as the company’s sales force. They build-up buyer-seller relationship. In the mid-90s, promos were just some trivial giveaways. 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’. All these sales promotion schemes work on the principle that few people can resist a free gift, price reduction or special offer. 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. Content Guidelines 2. “Marketing Management” Sales Force and Promotion Prepared by: Jonah C. Pardillo 2. Sales promotion has to be selectively used like steroids, because though beneficial in the short-term, there will be damage to the health of the brand in future. The type of objectives will vary with the target market. Because the sales message is disseminated through the mass media–as opposed to personal selling–it is viewed as a much cheaper way of reaching … Akai, Daewoo, Philips, Samsung, Rayban, Van Heusen and Maruti have come out with exchange offers. Channel pilferage is very common here. Above are all the different types of sales promotions. The product to be sold is a common, everyday red brick. Marketers must be on the lookout for ways to rise above the clutter. Coupons are generally issued along with the product. Sales promotion tools used to boost short-term customer buying and engagement or enhance long-term customer relationships. Copyright 10. Sales reps need to close more sales, and they will more readily accept and execute sales strategies that they feel are designed to help them get lead after lead, and meet and exceed sales quotas and goals. Only consumers postpone their purchases till an off-season price-off is announced. (a) When established brands have a declining market. Of late, consumer durables are being sold in India on sales promotion. Promotion is tactical and short-term. The company can use sales promotion to achieve many objectives. Secondly, the premiums advertised must be readily available at retail points during the entire period of scheme. (j) MRTP provisions must be respected. The contest is called ‘the world’s greatest salesperson’. There are certain inherent conflicts. But used improperly, they demoralise the representatives. Direct themes could be obtaining new accounts or improving the market share. Demonstration of products induces customers to buy. (ii) The trade is motivated to carry a larger inventory. For example- Big Bazaar issues coupons for selected items in their weekly flyers that are distributed via mail or along with newspapers. Plagiarism Prevention 5. In this article we will discuss Sales Promotion:-. Unscrupulous traders and transportation bottlenecks may hamper the scheme. Sales-force promotion Manufacturers appoint salespersons to sell or distribute their products. (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. The seller determines the number of installments in which the price of the product will be recovered from the customer. Terms of Service 7. A push promotional strategy makes use of*a company’s sales force and trade promotion activities to create consumer demand for a product. 7. Definition of Sales Promotion 3. 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. (e) Booking of shelf-space of prominent dealers must be done sufficiently in advance. Reactive sales promotion objectives are developed in response to some unfavourable market situation, or where the objectives are essentially short-term, such as the following-. Implementing and Controlling the Sales-Promotion Programmes, 6. 1. The most common objectives under pro-active category are: 1. They entitle the holder to either a specified saving on a product or a cash refund. In TV market, the introduction of S-band and hyper-band sets led to the replacement of old 12-channel sets, thus giving rise to exchange offers. Sales promotion serves to fill the gap between advertising and personal selling by coordination and supplementation of the efforts in these two areas. Sometimes, coupons may be part of magazine or newspaper advertisements. Free samples are given to consumers to generate their interest in the product. 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. A free automatic camera is given free with every Samsung refrigerator, a portable colour Akai TV free with a 21-inch Akai TV, etc. 10. A reusable container can be reused after the product is reused. Meaning and Definitions of Sales Promotion: Sales promotion is said to be a key ingredient in the international marketing campaign. Mostly, the schemes are purchase- linked. (b) When there are no product improvements. Novel themes – the focus is on recreation and fun linked with the current sales scenarios. Types 10. Premium may be of several kinds — direct premium, reusable container free in mail premium, a self liquidating premium, trading stamps, etc. Salesforce promotion techniques. Couponing is useful to promote a new concept. Consumer promotions are directed towards the consumer and are strongly prevalent in the FMCG category. A contest is to be held by Ogilvy one Worldwide to test how well one understands people and one’s creativity. Sales Promotion – Why Use Sales Promotion? The campaign should be directed to the consumers for whom it is meant. 2. In case, they are not linked to purchase, the construct becomes complex. Pre-testing ascertains cost-effectiveness of various alternatives. 4. Perhaps, there is no effect of advertising now. (b) Competitors arise up their sales promotion. Product Sales Force Structure: The sales force sells along product lines. Some goals are easier for accomplishment than others (e.g., territory potential may be different and hence, high potential leads to easy accomplishment of goals.). There are motivational tools linked to sales that achieve a certain level or cross that level. This involves offering products to consumers at discounted or reduced prices by a certain percentage from the regular price of the product. Sales Promotion is an important instrument in marketing to lubricate the marketing efforts. The company’s marketing objectives and strategies influence the development of sales promotion objectives and strategies. Each position has different parameters for success, skill requirements, experience requirements, and other distinctions. of the total promotional budget. Promos should be integrated to products and advertising. Sales promotion is increasingly being used to accomplish an ever-expanding list of marketing objectives. Techniques 8. Producers of new brands or innovative products are introduced by holding fairs and exhibitions. Moreover, distributing samples to customers also involves expenditure. It consists of mostly collection of those short-term incentive tools, which are designed to stimulate purchase of a particular product or service. Even mass media coupons can help advertisers to know the effect by considering the redemption rate. Hence, sales promotion aims at stimulating the purchasing at the point of sale and dealers’ effectiveness at the retail channel of distribution. Sales promotions are only supplementary devices to supplement selling efforts of other promotion tools. The basic aim is to increase consumption and usage. Consumer promotion helps to penetrate the market. Conventionally, the glamour in promotion is stolen by advertising. They are to be used at the right time in the right measure. Pre-testing is done by panel method, or by mail survey or by a field-study. Promos have limited reach and cannot change brand perceptions across the entire spectrum of customer universe, even if supported by the company. Premium refers to goods offered either free or at low cost as an incentive to buy a product. Mostly in-house journals, circular letters, personal letters motivational letters and reminders are used to promote the contests. 4. If you can sell it, probably you can sell anything. 5. We'll cover promotions to increase sales, to encourage repeat business, and to boost brand awareness. Goods are sold at reduced prices during slump season. Tropicana’s brand awareness was increased by a phone-in contest by Pepsi. Customer Sales Force Structure: The sales force is organized along customer or industry lines. Consumer promotion can be offered either by a manufacturer or a retailer. Studies on SP give us the following guidelines: 1. Sales promotion alone cannot build up brand loyalty. Contests are the promotion events that give consumers the chance to win something such as cash, trips or goods. Options of Promotion Objectives 9. Promos can become strategic if they are supported by other elements of the marketing mix. Sales Representative Level Promotion 13. Promo should be timed perfectly. The time also determines the success. 4. The common problems are non-availability of premium/differing quality of premium item. Success of couponing exercise is based upon retailer cooperation. The question that needs consideration is whether exchange offers ensure loyalty. Many were aggrieved when they did not get Madonna’s audio cassette on Pepsi Drink’s Crowns. If we guess the total number of such packets correctly and write a good slogan, we could be winning a Samsung refrigerator worth Rs.70,000. Says that the sales gain would have to be large enough to compensate for the reduction in revenue necessary to fund the promotion. These rewards can be given for individual performances and for special achievements. Marico is concentrating on hair dressers and beauty parlours to reposition Parachute hair oil as a hair-styler. a highly fragile, perishable or bulky product. What constitutes a new order? Retailers have to exert more to handle promos. In short, sales promotion is a bridge or a connecting link between advertising and personal salesmanship, the two wings of promotion. All concepts of brand management are thrown to the wind. The distribution channel is offered sales inducements to motivate them to support a brand by providing it a more than their usual push. These coupons are either advertised by producers/retailers in newspapers or distributed in weekly flyers via mail across households. But because it pays rich dividends, sellers have accepted it as an important item in the marketing-mix. 5. Promotion is not only addressed to consumers but also to dealers. Companies can offer a car or consumer durables for generating certain percentage of sales in a particular month or quarter. The four philosophies are production, sales, marketing and societal marketing orientations. These schemes are intended to motivate sales people to put in more efforts to increase sales, increase distribution, promote new or seasonal products, sell more deals to resellers, book more orders, develop prospects lists and build up morale and enthusiasm. The value of a freebie should not exceed the value of the product itself. It is one of the most important part of trade promotion activities followed by various companies. Marketers must be on the lookout for ways to rise above the clutter. 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. 3. But BTL generates sales at high costs and is not sustainable. They may be distributed door to door, by mail or they may be inserted in packages. 5. Each and every business is different and therefore, the type of sales promotion used by each business needs to be different. When promos are on par amongst the brands, they tend to pick the brand on the basis of offer. The salesforce should know its role and be motivated to do its best. There is no ‘fair’ or ‘just’ contest. Even price-off may tell upon the quality, because the manufacturer is likely to cut corners somewhere. Sales turnover of special packs or self-liquidators. Contents: Concept and Nature of Sales Promotion Objectives of […] Reduction in prices stimulates sale of goods. Samples are one of the most important tools of sales promotion. 5. Cash refund offers are rebates allowed from the price of the product. Marketers should also know the brand does not need any promo. They experience a larger decline in revenue from advertising. It has flexibility and it can be used at any stage of a new product introduction. 2 brand uses couponing to challenge the market leader. He may have a good sales force. John Paul Jones in his seminal work “What’s in a brand”? They improve sales / profitability. The brand which is constantly on sales promotion is vulnerable to a better offer. Large sales force with a hierarchical order calls for contests for different groups, and eligibility criteria restrict the participation to each group. Binaca used to give those animal replicas. Contest is not an intelligence test, and so should be absolutely clear. Report a Violation 11. To reduce post-purchase dissonance, promos can be used. The consumers become addicted to promotional offers and do not consider the brand unless there is a freebie. 6. They should be carried out in small bursts and phased out. What succeeds for one product may not succeed for other products. It also has difficulties. Advertising messages may promote the adoption of goods, services, persons, or ideas. Samples. 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. One maxim is, do promote, but not at the cost of brand equity. It gives direct inducement to take immediate action now rather than later. Without reducing the retail price, a marketer provides consumer promotion when raw material prices are reduced. Sales promotion is designed to be used as a short-term tactic to boost sales – it is rarely suitable as a method of building long-term customer loyalty. Short purchase cycles mean short-term effects. Some agencies working in this field in India are Glea Public Relations of Shri Nair, Wiz.Com (a division of Wizcraft) of Timmins, Joseph and Sarkari and Fountain-head of Murry and D’Souza and Tellis. In direct marketing, couponing also helps to evaluate the effectiveness of the campaign based upon the response rate. Each programme should have its individual implementation and control. When the decision is to discontinue a product, or close down the business. 1. Advertising has reached the target audience when they were away from the store. Consumer level sales promotional tools are: (i) Consumer contests with prizes (ii) Price-off deals (iii) Purchase price refunds (iv) Coupons (v) Samples (vi) Premiums or gifts – (a) With-pack premium (b) Reusable container (c) Fre… (2) Dealer Promotion- Activities to increase the interest and enthusiasm of dealers and distributors. Objectives of Sales Promotion 3. The nature of promos changed. Marketers employ a remarkable variety of sales promotion tools in marketing. Demonstration is required when products are complex and of a technical nature. The most prominent reason is an emphasis on quarterly results expected of senior management. 6. Sales promotion activities include special offers, displays, demonstrations, and other nonrecurring selling efforts that aren’t part of the ordinary routine. IFB is offering a gas stove and a gas lighter on two of its washing machine models. In-pack premium has a constraint. Event management covers product launches, theme parties, promo for liquor and cigarette brands, music driven events, beauty pageants, etc. In a contest, individuals should not be pitted against each other. Those tools which carry a selling message from one category, e.g., free samples, coupons, gifts related to the product, form one category. The whole purpose of such promotion is lost. Retailers thus demand more S.P efforts from their suppliers. 8. Results of promo should be lessons in marketing. Point-of-purchase displays give a real payoff, sales rising by 25 to 50 % or even more. Promos support mainline advertising. The earliest redemptions are incremental sales. Say, a cheap ice cream cone offered at McDonald’s attracts people inside and then they can try the other items on the menu. Brand buying is just a transaction. To increase sales of any product, producers adopt different measures like distributing samples, gifts, coupons, bonus, etc. The No. (ii) Allowances like advertising allowance or display allowance. But healthy promos will strengthen the brand. Privacy Policy 9. It is also known as a push strategy, which is directed at the dealer network so that they push the brand to the consumers by giving priority over other competitor brands. Producers can organise competitions or contests among salespersons to encourage them to generate more sales from new customers. The contest will be held on a branded channel on Youtube and will use other social media like Facebook and Twitter. Retailers use promos to attract customers inside, and then encourage them to buy other products. SP got a little share. Increase units sold per representative. Premium is generally offered for consumer goods such as soap, toothpaste, etc. Just as there is advertising clutter because of a large number of advertising messages, we also have a promotion clutter on account of a large number of promotional tools used. A rebate of Rs. Discounting or promotion pricing has traditionally been a function of a competitive market that is in the process of evolving. (iii) At the level of salespersons, it is called sales force promotion, e.g., salesmen’s contests, bonus and sales rallies. It can be used as a stock clearance scheme. The rest forms another category, e.g., price-off packs, trade allowances, etc., gifts not related to product. It induces trials and generates loyalty. Couponing has the advantage over direct rebates in the sense that couponing does not make the ‘cheapness’ explicit. According to John Paul Jones, couponing as a method of promotion is better than other methods. Surprisingly, a wide range of below-the-line activities account for a large share of the total promotional mix all over the world. Every achievement must be rated in terms of points. The direct inducements cover a whole package of coupons, price-offs, premiums, larger quantity trading stamps, free gifts, displays, shows, expositions and demonstrations. This activity aims at attracting consumers to other or newer brands, seasonal and unseasonal goods. 5. Brand expectations are built by Ford by asking participants to identify celebrities inside the car, and to win a foreign trip. They should be small enough to fit in the package. A panel of judges selects the best and buyers are given prizes. Similarly, traders should be responsive in terms of performance. Marketing objectives and strategies are related to the marketing-mix of a company, while the promotion objectives and strategies related to the promotion-mix only. Benefits 10. A mobile phone which comes as a freebie with a car is, therefore, received as value addition. The annual expenditure for sales promotion is rising rapidly. Sometimes, samples are attached to another product. A visit to your nearby supermarket will reveal numerous sales promotion schemes of various products, simultaneously vying for our attention. User 6. Promotion is an incentive tool used to drive up short term sales. 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. Advertising is salesmanship in print, but has moved too far from it. Planting the gold (sell more profitable product mix). What issues and problems can arise in different country markets? In other words, buy back allowances are given for new purchases, based on the quantity of goods bought previously. Representative level promotion must have an element of excitement and also should be capable of entertaining the participants. 500. The parties should be clear about goals and role of one another. They introduce new product by asking the prospects to state the reasons for the purchase of the product. Opel users are invited to an evening of entertainment, extending interaction beyond purchase. (d) Regular supplies of products / gifts during the pendency of the scheme. The company must make sure that the benefit of the scheme should reach the consumers for whom the scheme is meant. Sales promotion ideas and examples to increase sales. Coupons are used for consumer convenience goods. Apart from inducing trials, coupons are used to retain the existing customers. A promo should remind the consumer the core values of the brand. Same prizes for each contest are to be avoided. A large globe contained a number of 15 gm Nescafe sachets. To increase selling efforts and intensity by dealers as well as by sales personnel. Sales force is linking between companies and customer. Price-offs in off-season fridge sales does not help much to stimulate off-season sales. Later, the announcement of a few more prizes, writing of reminders, etc., generate an air of expectancy. Themes must be measurable objectively and be relevant to the company’s sales curve. Securing additional shelf-space and added display. Free samples are developed for introducing new products. One has to communicate with the consumer through advertisements and POPs at the retail level. Though sampling is effective, producing numerous samples of a product is quite expensive. Consumer promotion takes care of the strong competitive brand. Promotional support is a must for any SP scheme. The Govt. 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. 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