Sales Promotion is the final element in the marketing mix. After the nature of product is decided, its price fixed and the methods of distribution decided, the manufactures has to take effective steps in meeting the consumers in the markets. In the present consumer oriented markets it is the duty of manufacturers to know what is required by the consumer. It is also their duty to make the customers know where, when how and at what prices. The products would be available.
The term Sales promotion is the term and includes mainly three type of sales activity :
1. Mass impersonal selling methods (Advertising).
2. Face to face personal selling (Salesman ship).
3. Activities other than personal selling and advertising such as point of purchase display (P.O.P.) show and exhibitions, demonstrations and other non securing selling efforts. This form of activity is called ‘Sales Promotion’.
Promotion and Selling
The term promotion is very often used as a synonym for selling. But selling is a narrow term which includes only transfer of title or personal selling. Promotion on the other hand is broader in its outlook and includes a variety of activities used ultimately for increasing sales volume.
Promotion and Sales Promotion
Similarly the terms sales promotion can not be taken to mean what is commonly does. Sales promotion, is only a part of the promotion. Basically promotion is an "exercise" in information persecution and influence. Promotion has come to mean the over all co-ordination of advertising selling, publicity and public relations. Promotion is a helping function designed to make all other marketing activities more effective and efficient. But sales promotion as such helps only the selling activity still, there exit same difference of opinion on the real connection of the term sales promotion.
Acc. to A.H.R. Delons :-
"Sales promotion means any step that are taken for the purpose of obtaining or increasing sales".
Acc. to W.Q. Kelly Opines :-
"Muddled misused misunderstood that is sales promotion Acc. to him the field of sales promotion as a marketing activity is still vaguely defined and organized.
Sales Promotion and Advertising
There is no universally accepted distribution between these two terms. To same advertising includes all forms of mass media communication directed towards influencing the end consumer. Sales promotion on the other hand, includes the form of mass communication directed towards information and influencing the channel of distribution (e.g. distributors, retailers etc.). Hence a price of product literature distributed by retailers in sales promotion. These sales promotion merges on one side in to advertising and on the other in to personal salesman ship. It is concerned with the dissemination of information to whole salers, retailers, customers (both actual and potential, and to the salesman).
Sales promotion is concerned with the creation. Application and dissemination of material and techniques that supplement advertising and personal selling. Sales promotion makes use of direct mail, catalogues, trade shows, sales contests, premiums, samples, windows displays and other aids. Its purpose is to increase the desire of salesman, distributors and dealers to sell a certain brand to make consumers more eager to buy that brand. Personal selling and advertising do include prospects to make these decisions. Sale promotion provides an extra stimulus.
Objectives of Sales Promotion
1. To increase sales directly by publicity through media which are complementary to press and poster advertising.
2. To disseminate information through sales man dealers etc. So as to insure the product getting in to satisfactory use by the ultimate consumer.
3. To attract new consumer.
4. To face the competition effectively.
5. To help salesman in selling more to the retailers and consumers.
6. To check seasonal decline in sales. Generally speaking sales promotion involves rendering the following services:-
(a) Services to dealers.
(b) Services to own salesman.
(c) Special publicity.
Sales Promotional at different levels
1. Sales promotion at Dealers Level :-
It may include various schemes some of which are discussed here.
(i) Advertising Materials :-
The advertising material prepared by the company such as store signs, banners, shelf signs, board etc. are distributed to sub dealer for display purposes this is in fact a method of advertising.
(ii) Store Demonstration :-
In the promises of the whole saler or the retailer the products sales personnel will conduct special demonstration for the companies product. A personal demonstration is good to introduce a new product at its peculiar advantage can be high lightened and the consumer’s doubt clear. It can be used to restimulate an old product. A good demonstration with a great dealer of action will draw heavy crowds in to the store and will attract attention to the product.
(iii) Special Display and Shows :-
These are in seasonal in character but could be arranged in an elaborate manner and for all the products of an company. Usually these are arranged along with trade fair and exhibition. Besides effecting sales these shows impress the company’s name generally on the public.
Sales promotion at consumer’s level
The various schemes of sale promotion at Consumer’s Level may include.
1. Coupons (A Chit of Stated Value) :-
These are given directly to the consumer these coupons are in most cases kept inside the package. The consumers many receive a price reduction of the stated values of the coupon at the time of purchase. The retailer receives reimbursement for the value of the coupon form the manufacturer. Coupons act as a short run stimulus to the sale of the product, since they are directly tied with the purchase of the item. They encourage the retailer to stock the product.
What is important is that a coupon offer does not spoil the named price of the brand nor does it un pair the margin of the dealers. But it is not easy to measure the effectiveness of a coupon offer. One over knows how many customer would have bought the product without the incentive. It is also difficult to find out how many customers were held after the coupon offer expired.
2. Price-off-offer (Also known as bargain offer price packs) :-
This offer is intended to stimulate the sales during a slump season. In this method the customer is offered a reduction from the printed price list. It is also used when a substitute for competing product enters the market.
Many experts on sales promotion fed that ‘Off Schemes’ are among the weaker and less desirable methods of promotion. These can be trade resentment particularly when the retailer raises the price to retain his margin. Secondly that is not conductive to building up brand loyalty. Consumers may simply shift to the products that offer this scheme.
3. Samples :-
In the hope of converting a prospect into a customer a sample (Some quantity of the product) may be given. This helps the consumer to verify the real quality of the product. Various pair manufacturing companies offer this method. For developing brand loyalty this method is quite useful. Sampling is a fast method of demand creation because one knows the result as soon as the consumer has had time to use the sample and buy the brand.
Disadvantage of Sampler :-
Offering sample in quit expensive. There is the cost of producing samples. The distribution costs are also high. Sample have to be mailed to potential customers or to be distributed through retail shops. There are also problems when the real product does not resemble the sample supplied.
4. Money Refund Offer :-
An offer usually stated on the package is that manufacturers will return with in a stated period part or all of the purchaser’s money if he is not completely satisfied with the product.
5. Trading Stamps :-
A premium in the form of stamps is given by the sellers to consumers while selling goods. The number and value of stamp that the buyer receives depends on the values of the purchase. These stamps are redeemable through premium catalogues at the stamp redemption centres.
6. Buy-Back Allowance :
This an allowance following a previous trade deal not offer a certain amount of money for new purchases based on the quantity of purchases on the first trade deal. It extends the life of a trade deal and helps to prevent part deal sales decline. It greatly strengthens the buyer’s motivation to co-operate on the first deal.
7. Premium :-
There are various forms of premiums provided by the manufacturer as sales promotional devices :-
(a) Coupons are supplied for effecting price reductions.
(b) Factory in pack premium these are popular in the case of Body food and Tin food items, Spoons, Cups, Measuring, Glass etc. and such other items are packed with the product in the box itself. Factory in pack premium are particularly goods for product meant for children. The Binaca Toothpaste packs contain animal shape toys. These are very attractive and qutie popular among the children.
(c) Self Liquidating Premiums :-
The cost of the premium is collected from the buyer himself. But when the buyers pays for it he has to pay only a considerably low price for the premium. This is possible for the manufacturer purchases the items in bulk at a premium and his cost per unit as is substantially low.
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