Customers are educated as to how to make proper use of the product. Large sales force with a hierarchical order calls for contests for different groups, and eligibility criteria restrict the participation to each group. (c) Discounts offered during promotion period become the baseline for future promotions. 4. Free samples are given to consumers to generate their interest in the product. It is, therefore, crucial that these contests are handled properly. 5. Without reducing the retail price, a marketer provides consumer promotion when raw material prices are reduced. Representative level promotion must have an element of excitement and also should be capable of entertaining the participants. (b) When there are no product improvements. Sales promotion is often thought as special aggressive selling efforts to accelerate sales. The Indian consumer still has suspicions about cash rebate. 7. Reduction in prices stimulates sale of goods. 2,500 will be given a gift worth Rs. 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. To reduce post-purchase dissonance, promos can be used. The type of objectives will vary with the target market. Mostly, the schemes are purchase- linked. The market is to be assessed soon after the scheme begins. 3. 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. What constitutes a new order? 4. The brand which is constantly on sales promotion is vulnerable to a better offer. Goods are sold at reduced prices during slump season. However, sales force is expensive and companies are looking forward to managing them in an efficient and effective manner. In a bundle, one product works as an effective awareness builder and a trial inducer for the other product. Tropicana’s brand aware­ness was increased by a phone-in contest by Pepsi. They are non-recurring in their use. Concept of Sales Promotion 2. (e) When we decide to embark upon aggressive sale campaign. Premium is generally offered for consumer goods such as soap, toothpaste, etc. Securing additional shelf-space and added display. On the contrary, such promotion delays further repurchases. Sales promotion strategies can be divided into three broad types. The programme thus developed should be pretested in order to check the effectiveness of the programme. Types of Programs 7. 1. 7. 2. Before uploading and sharing your knowledge on this site, please read the following pages: 1. Studies on SP give us the following guidelines: 1. Mostly, either it is a price related scheme or bundling of a package. A variety of contests / a variety of prizes do help in this direction. The retailers are poor in administration of complete schemes, whereas the wholesal­ers are poor at generating the primary demand. Cash refund offers are rebates allowed from the price of the product. Many of these schemes are dealer loaders, e.g., merchandise deals, discounts, buying and selling allowance, premium or push money and POP materials. Sales pro­motion is generally broken into two major … Major Decisions and Other Details. Marketing, Products, Promotion, Techniques, Sales Promotion. Sometimes, samples are attached to another product. Zip Sip brand of flavoured milk? Not only does it give profit but it also serves other purposes such as provision of information, creation of demand, repeat buyers, sales stabilisation and quick inventory turnover. Therefore, companies have to be careful in designing and structuring sales force. There is a risk of brand devaluation if SP is done in excess. The consumers might get alienated from the superior benefit it actually offers. 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. Revenues from activities like direct marketing promotions, PR and research are on the rise. 2. Sales Promotion Tools and Techniques – 12 Commonly Used Tools: Coupons, Free Samples, Price-Off Offer, Fairs, Exhibition, Free Gifts, Competitions and a Few Others. When the decision is to discontinue a product, or close down the business. 2. Companies usually, therefore, pay additional handling charges to the retailers per coupon handled. What succeeds for one product may not succeed for other products. 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). Mass advertising has its limitations and a certain shift to direct marketing and promos is inevitable. Thus, sales-promotion is used at the time of introducing a new consumer product, to secure maximum dealer stocking, display space and attention of consumers. The two types of sales promotion tools consumer are as follows: A. 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. Price-offs in off-season fridge sales does not help much to stimulate off-season sales. 1. Account Disable 12. Promotion is not only addressed to consumers but also to dealers. So basically, these are different tools with purpose of encouraging consumers, dealers as well as the company’s sales force. Advertising expenses so far accounted for more than 60 p.c. Each position has different parameters for success, skill requirements, experience requirements, and other distinctions. The quality must be specified. The company made Ogilvy writes a manual for other salesmen. To increase selling efforts and intensity by dealers as well as by sales personnel. The reusable package itself serves as a premium. Sales volume can also be increased through effective mobilization and encouragement to the sales-force. 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. BPL has sought to build value around the brand by offering a package of product on low monthly installments. All these sales promotion schemes work on the principle that few people can resist a free gift, price reduction or special offer. Retailers have to exert more to handle promos. 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 just proving the maxim ‘there is no brand loyalty which two cents off can’t overtake’. Sales Promotion Schemes. To gain additional market share or additional revenue. Coupons have four advantages- (1) Regular buyers are limited to one reduced price pack, so that the subsidy to existing buyers is reduced, (2) Coupons do not dilute the brand value, (3) The customer tends to resist paying the normal price again with normal rebates. On the close of the contest, wide publicity is given to achievers and their photos are flashed. Cash refunded offer is stated on the package. Producers can organise competitions or contests among salespersons to encourage them to generate more sales from new customers. A visit to your nearby supermarket will reveal numerous sales promotion schemes of various products, simultaneously vying for our attention. Sales-promotion involves a lot of expenditure. What issues and problems can arise in different country markets? to promote the sale of an established product, to stimulate customers to switch brands; and. Those tools which carry a selling message from one category, e.g., free samples, coupons, gifts related to the product, form one category. It is not so with coupons and (4) Competition retaliation is not so sharp. Contests are conducted to attract new customers. Healthy customers, Healthy sales (more profits per customer), etc. Many sales promotion campaigns involve the use of incentives. A large globe contained a number of 15 gm Nescafe sachets. Names of consumers are included in a list of prize winning contest. A rebate of Rs. The time also determines the success. The sponsors, therefore, should carry-out these tasks. What constitutes a sale – whether an order, or a delivery or payment received? The trade promotions help build customer traffic at the retail outlet. Direct marketing is used to send coupons to a selected list of users. (1) Consumer Promotion- Activities intended to educate or inform the consumers and those intended to stimulate the consumers. Promotion is an incentive tool used to drive up short term sales. A contest is to be held by Ogilvy one Worldwide to test how well one understands people and one’s creativity. Sales promotion ideas and examples to increase sales. The earliest redemptions are incremental sales. One maxim is, do promote, but not at the cost of brand equity. Sales promotion alone cannot build up brand loyalty. 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. They have seldom reuse values. Today, sales promotion is attracting more and more of the promotional budget. 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. The present contest will earn the winner a fellowship during which the winner will help Ogilvy write a guide to selling in the 21st century. Premium products are sold on pull factor, and a promo works on a push factor. Similarly, Videocon offered Rs.7,000 off on its No-frost model of refrigerator against an old fridge. Let’s hunt for the hidden treasure (find new customers). Companies can offer a car or consumer durables for generating certain percentage of sales in a particular month or quarter. Promos have limited reach and cannot change brand perceptions across the entire spectrum of customer uni­verse, even if supported by the company. A marketing man today wants a short-term increase in sales of the current year, rather than waiting to build the brand over a period of five years, by which time he may or may not be in the organisation. Benefits 10. This monitoring covers brand / premium availability, brand visibility, movement of the brand at the retail outlets on day-to-day basis, competitor’s countermoves, etc. Advertising is salesmanship in print, but has moved too far from it. 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. Consumer-oriented Promotion Tools B. Trade-oriented Sales Promotion. The real thrust came in 1999. For consumers, the objectives may be to encourage purchases, building trial, etc. Coupons are used to attract new customers. Promos support mainline advertising. There is an effort to integrate promotion with the core brand values. 5. 3. Types of Consumer Sales Promotion tools 1. User 6. In other words, buy back allowances are given for new purchases, based on the quantity of goods bought previously. Creating talking points for salespersons. Entry forms are duly filled by the buyers. In business, there is a growing realization that promos have been stretched too much. of the total promotional budget. These rewards can be given for individual performances and for special achievements. They are also sent by mail or given to customers in the retail store itself. The final step is to evaluate the results of the programme in order to determine the effectiveness of the programme. It can arouse enthusiasm, create a buying mood or spark an immediate reaction from consumers, dealers and the firm’s sales­person. Consumer promotion can be offered either by a manufacturer or a retailer. Intangible benefits, e.g., charity or personality associations. To illustrate, National offers Rs.500 off on its grinder mixer if a consumer brings his own old grinder mixer. SP got a little share. Couponing is useful to promote a new concept. Only 15 per cent POP material that is supplied is displayed and that too for half of its useful life. Thus, they will get the benefit of additional business. Two products which are related or unrelated can be bundled together, and either product may induce a buyer to buy the product. In the mid-90s, promos were just some trivial giveaways. Different methods like bonus, sales-force contest and sales meetings can be applied as sales-force promotion. Coupons are generally issued along with the product. Examples of promotions … In sales promotion, the following arithmetic is taken into account: Cost of Promotion = Actual Price of the Gifts + Cost of Promoting and Promotion (Point of Purchase Material + Media ads, etc.,) < Additional Sales Revenue. Promos should be targeted properly to be effective. John Paul Jones in his seminal work “What’s in a brand”? If you can sell it, probably you can sell anything. Of late, consumer durables are being sold in India on sales promotion. 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… Everything must be specific. Sales promotion is the process of persuading a potential customer to buy the product. The maximum and minimum discount must be stated. For the sales force, objectives include encouraging support of a new product or model, encouraging more prospecting, and stimulating off-season sales. It is an offer to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer. It is chosen as it is ubiquitous and will not cost much when contestants buy it for their video submissions. Many were aggrieved when they did not get Madonna’s audio cassette on Pepsi Drink’s Crowns. 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. A panel of judges selects the best and buyers are given prizes. But it has now come to be used strategically also. Samples. As soon as the promo is advertised, there should be action in the marketplace. Both products reap the benefits of the promo. The discount period should not be less than 10 days. Promos should be integrated to products and advertising. Planning 6. Direct themes could be obtaining new accounts or improving the market share. Increase sales on average per account. Conventionally, the glamour in promotion is stolen by advertising. It covers those marketing activities other than advertising, publicity, and personal selling that stimulate consumer purchasing and dealer effectiveness. Tools and Programmes 9. Couponing is used as a tool to penetrate the markets. The campaign should be directed to the consumers for whom it is meant. (b) Competitors arise up their sales promotion. 4. 4. What part of their arsenal will they use? But food products do show category growth by such promotion, e.g., biscuits. One has to communicate with the consumer through advertisements and POPs at the retail level. (b) The terms / schemes should discourage unscrupulous trade practices on the part of trade. Content Guidelines 2. Instant gratification is what the users of FMCG brands seek from promo. All concepts of brand management are thrown to the wind. (h) POP material and its display need supervision. When new products are launched, the ads may carry coupons of price-offs to induce trials. To develop favourable consumer experience with the product. But healthy promos will strengthen the brand. (e) Booking of shelf-space of prominent dealers must be done sufficiently in advance. The schemes are all product specific. The retailers were formerly reluctant to handle coupons because passing coupons to distributors, who in turn passed them on to the company, and receiving pay­ments thereafter took a lot of time. Success of couponing exercise is based upon retailer cooperation. So, generally promos are not offered on premium products. 3. 3. Options of Promotion Objectives 9. Though sampling is effective, producing numerous samples of a product is quite expensive. To build goodwill by sharing the gay spirit. 4. 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. Additional value covers – money, e.g., reduced prices, free sample, extra value. Consumer promotions are directed towards the consumer and are strongly prevalent in the FMCG category. Agencies of late have set up BTL divisions, but these lack depth. Sales contest have goals to accomplish. Premium refers to goods offered either free or at low cost as an incentive to buy a product. Sales promotion activities include special offers, displays, demonstrations, and other nonrecurring selling efforts that aren’t part of the ordinary routine. Agencies like Trikaya-Grey, Ad Avenues and Maa Bozell have set up separate divisions to handle events. Developing the Sales-Promotion Programme, 4. Marketers employ a remarkable variety of sales promotion tools in marketing. Tools 11. Sales promotion and publicity, when combined with advertising and personal selling programmes, really add up to more than the sum of the parts. In particular, it enables the marketer to add time urgency and other behavioral influences to the promotion campaign. Apart from inducing trials, coupons are used to retain the existing customers. The company must make sure that the benefit of the scheme should reach the consumers for whom the scheme is meant. The product to be sold is a common, everyday red brick. The successful promotional effort has many ingredients such as personal selling, sales-promotion devices, advertising, public relations, and publicity. Couponing works betters for premium products because price-offs give genuine value to the customers. Short purchase cycles mean short-term effects. Sales promotion activities include special offers, displays, demonstrations, and other nonrecurring selling efforts that aren’t part of the ordinary routine. This is called a construct. Incremental sales are difficult to obtain for brands having a large market share. Sales promotion tools used to boost short-term customer buying and engagement or enhance long-term customer relationships. For example- The Confederation of Indian Industry (CII) organises several business and trade fairs on specific industries. Objectives of Sales Promotion 3. Customer Sales Force Structure: The sales force is organized along customer or industry lines. A shorter definition could be- “The practice of offering a temporary additional value to a brand in order to reach specific marketing objectives”. 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. The types of sales promotion techniques used by the company depend upon the sales promotion objectives set by the company. 5. Briefly review how the main tools of sales promotion (e.g., sampling and couponing) can be used in global markets. Sales-promotion objectives are derived from broader promotion objectives which, in turn, come from marketing objectives. Sometimes, staffers other than sales representatives should be included in the contest. The contest is called ‘the world’s greatest salesperson’. Free samples are given to consumers to generate their interest in the product. In a recent Tata group contest, the participants had to select the ‘Pride of India’, complete a slogan, and send the entry with an empty packet of any Tata tea or coffee, and one could win a Mercedes Benz or a Tata Sumo Deluxe car. Promotion is tactical and short-term. The techniques could be those where the measurement of results is straightforward, or difficult to measure. The most prominent reason is an emphasis on quarterly results expected of senior management. Number of entries received for the consumer contest, etc. (b) When we have to communicate a major improvement in our product. Demonstrations are provided free of cost. The No. A freebie is allowed only when the company bears its cost. Concept and Nature of Sales Promotion 2. The seller determines the number of installments in which the price of the product will be recovered from the customer. He may have a good sales force. 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