We all wait for the summer/winter clearance sale to finally buy items we’ve spotted but couldn’t afford to buy during the season. These trade promotions are targeted to marketing intermediaries such as – wholesalers and retailers. Increasing usage rate by present customers. These coupons may be mailed directly to customers or by publishing ads in newspapers and magazines along with Re off coupon offer customers will get them. Sales promotions are marketing events or sales efforts—not including traditional advertising, personal selling, and public relations—that stimulate buying. In these conditions, sales promotion devices are started to counter the other sellers’ plans. One study suggested the following reasons for undertaking actively all forms of sales promotion: 1. Educating customers – Educating customers/dealers and salesmen simplifies the efforts of salesforce and motivate them for larger purchase. The goodwill can be created by schemes like continuity programmes or store cards. To Increase the Use By Present Customers 3. The promotion communicates what is required to be communicated to various sections of the trade i.e., customers, government, shareholders and dealers etc. Sales force promotion: It involves efforts targeted towards the sales force to boost the morale of salesmen. Generally these displayed items generate a higher sales volume. A free sample is generally welcome to almost all consumers and increases the probability of trial and, in some cases, purchase as well. Price-off coupons are printed on the pack or in store hand-outs, and the customers can use them to save substantial amounts on their next purchase of the brand. Menu. But it can also feel like our days are overrun with sales promotions. 60, making the effective price only Rs. They induce buyers to purchase a new product by distributing free samples in the market. This is due to managers need to increase sales (inte… Some products have a good market. Sales promotion has a capability to complement and supplement the advertising functions of the marketing. You might set a sales objective to improve your percentages of upsells. Frequent-flier offer by some airlines is one such scheme, where the customer is allotted certain number of points, and on collecting specified points, gets a free offer of value. An important objective of sales promotion is to encourage re-seller participation in displays and contests. To attract new customers and retain the existing ones iii. v. Enhancing advertising and marketing efforts. Though this work is alone by advertising but other promotional activities help achieve these objectives. The product should be such that it can be stocked without occupying much space. Offer Details: The basic purpose of sales promotion is to increase the sales of a product by creating demand. Sales promotion induces present customers to buy more of the product. Welcome to EconomicsDiscussion.net! Contests are used to motivate dealers. 10. Share Your Word File vii. Consumers develop a new reference price for the product and the increase does not appear to be as high as it was perceived earlier. He does not play any role in designing such activities. Marketers attempt to increase sales for an established brand in several ways, and sales promotion can play an important role in each. Small budget companies, who cannot afford sustained advertising expenditures to introduce new products, or match the competitive advertising blitz, find sales promotions to be more cost effective and helpful in generating sales volume. Sales promotion is a tool used to achieve most of the five major promotional objectives discussed in the Promotion Decisions Tutorial:. 12. This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. Introducing new products – To induce buyers to purchase a new product, free samples maybe distributed or money and merchandise allowance maybe offered to business to stock and sell the product. During Super Bowl weekend, Pepsi introduces a … The retailer is not actively involved in them. Basically, the customer provides some proof of purchase along with some money. The suppliers tend to associate the charisma associated with these personalities with their products. In the marketing mix marketing communication is as important as other elements. It improves the performance of middlemen and acts as a supplement to advertising and personal selling. Such schemes are popular in toiletries and drinks. Share Your PDF File To Stimulate Demand: It is the primary objective of market promotion. In Order to Generate Immediate Liquid Funds: In order to meet certain commitments or funding some other immediate projects, it may be necessary to generate some liquid funds in quick fashion, by an organisation. 24.3 Objectives of Sales Promotion You have learnt that the main objective of sales promotion is to increase sales. In these schemes, the customer has to write to the supplier for the gift enclosing empty packets, bottle crowns, etc. For example, a children’s product may use a person dressed as their logo (for example a teddy bear) in the store. Promotions, such as discount coupons, not only encourage existing consumers but may also stimulate purchase by infrequent buyers, or even new tries. To do that, you could look into your sales reps’ commission packages and provide a heightened incentive to achieve the objective. to the customers while introducing the product. Through the use of appropriate means of market promotion, such as advertising, sales promotion, personal selling, and so forth, the company can stimulate demand for the product. In the competitive market it is becoming obvious for the marketers to analyse the rationality of pricing of the particular product with its available features and attributes. It helps marketers to realize a variety of objectives. They develop or reinforce a favourable set of attitudes and influence their buying behaviour. Here two or more packs are attached and sold for a better and attractive price than the price of the items singly. (ii) To increase the stock-holding of retailers, or even consumers, before the introduction of a competing brand, or. Encourage Repeat Purchase: Encourage Dealers to Participate in Display and Sales Contests, Objective # 7. It is the basis to avoid the duplication of activities as the rights and duties of every salesman, sales department or branch office are clearly defined in advance. >> increase in sales promotion is motivated by marketing plans and reward systems geared to short-term performance and immediate generation of sales volume >> fixation on market share not only to introduce products >> view consumer and trade promotions as the most dependable way to generate short-term sales, particularly when they are price-related. The objectives of sales promotion may be analysed as follows: Objective # 1. Increase in Sales. If advertising is an indirect approach the sales promotion is a direct approach for persuading customers to buy. Such sales promotions are communicated to encourage existing consumers to forward-buy. For the constant sales-increase, it is better to determine the sales promotion programmes on the basis of changing policies and to implement them with new strategies. But small scale production is not possible only on the methods of promotional activities. Launch New Product and Increase Trial 3. In particular conditions an institution follows sales promotion policies so that the popularity of the institution may increase. In an average store, there may not be more than ten or fifteen items that get major display space at any given time. That is why we find discounts, off-season price reduction of such items in the market. Generally sales promotion techniques are designed to create interest in the mind of customer and customer is interested to take action for purchasing the product or service. Hasbro, a toy company, teamed with the retailer Toys R Us to create direct mail booklets offering discounts on Hasbro toys only at Toys R Us stores. Some common examples of sales promotion marketing communications include consumer coupons, rebates, prizes, and loss leaders (or items sold at cost or a discount in order to attract business). The final aim is to persuade customers to return again and again to the store trading on the goodwill and loyalty that previous purchases have, hopefully, instilled, e.g. These objectives are for both marketers and traders. 3. Objectives Of Sales Promotion. To Increase Sales Volume 2. This certainly pre-determines the scope of sales promotion. Some outdated brands may also be withdrawn from the regular market and may be disposed off, adopting different schemes, allowing the consumers to buy the products at a concessional rate. Sales force promotion: It involves efforts targeted towards the sales force to boost the morale of salesmen. To Introduce New Products: When the product is at the introductory stage of the product life-cycle, advertising alone cannot support the marketer to penetrate into the prospective market. To Induce Middlemen to Purchase More – The middlemen whole sellers and retailers are induced to purchase more stock by offering more facilities such as credit facilities, higher trade and cash discount and free gifts etc. Providing Information – The producer generally provides the information regarding the quality uses, different uses of the products and the price etc. Sales promotion secures the following objectives: A firm that feels threatened would like to protect its loyal customers from switching to the new competing brand. Sometimes demonstrators are used in this context. Such a threatened firm would plan to loan load consumers so that they are in no need to go shopping for that product category. The various objectives of sales promotion can be summed up as follows: Customers who are just passing by, with no intention of purchasing, would be encouraged to enter the store. Objectives of Sales Promotion. For example, shaving foam and after shave lotion. Sales objective type: Leads. To increase buying response by ultimate consumers and selling efforts and intensity by dealers as well as by sales personnel, and. Stock clearance of slow moving, non-moving, outdated, defective or inferior quality goods. And since the customer also sends in some amount of money, the purchase price is easily covered. The main purpose of sales promotion is to introduce a new product among customers. Reminder promotion is very active during the maturity stage of product life cycle. They develop or reinforce a favourable set for attitudes and influence their buying behaviour. The following are the sales promotion techniques: i. There could be a number of reasons for companies to go for short-term increase in sales volume. They supply comparative information on various products so that consumers may be willing to purchase the products promoted by them. Objectives of Sales Promotion. Hasbro, a toy company, teamed with the retailer Toys R Us to create direct mail booklets offering discounts on Hasbro toys only at Toys R Us stores. 8. Improving the Public Image of the Firm: Huge amounts are now being spent on determining appeals for arresting the attention of the prospect towards the product. Through this effort push and pull strategy may be effectively introduced. To Counteract the Moves of the Competitors: The fast growing markets and increased competitions, lead the marketers to give emphasis on sales promotion. Any doubts and questions that arise in the minds of the customers can be cleared then and there, thus overcoming the resistance. Or, you could inspect your sales playbooks and follow-up guidelines to see how you could introduce more upsells into a rep’s pitching script. Sales promotion objectives should be specific, measurable, clear and concise, practical and realistic, affordable and attainable. For example, people who buy spices rarely, or in small quantities, decide to buy more often or in larger volume if they received free recipes in return. Price discounts can take different forms ranging from straight price discou nts to buy- During four-month period (February-May 1990). However, they may vary with the type of target market and points of channel. 5. In this stage target market has general product awareness and some knowledge about the product how the product fulfil their wants. Everything about a contest, whether display or sales, should convey the idea that it is something special. Disclaimer Copyright, Share Your Knowledge As described by W. E. Myers in the competitive field, it is becoming necessary to differentiate its product or service from other competitors claim, through sales promotion devices. The purpose of sales promotion is to increase sales. (vii) To Help the Firm Remain Competitive: As all the companies conduct sales promotion activities, a company has to undertake sales promotion activities to remain competitive. The objective of sales promotion is to induce the consumer to purchase more and more products and thus demand for the product is created. The suppliers can initiate various sales promotion activities at their end. If Kwality walls want to improve the distribution of its ice cream, it can give 1 ice cream free for every ice cream sold. The most common objectives under proactive category are: i. Contests can help in attaining short-term objectives and improve the company-reseller relationship. The objectives are: Sales Promotion 117 i. Some of the objectives of sales promotion are:-. Having persuaded customers to enter the shop, they could now be encouraged to buy by presenting the merchandise in such a manner as to create the purchase instinct in the customer’s mind; e.g. The main objective of sales promotion is to increase sales volume. Although it is expensive sampling is generally considered the most effective way to generate trial. Henko detergent introduced scratch card scheme in which customers usually received discount coupons so that customers buy the same product (Henko detergent) again. 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. In the month of January 1983, “Nescafe’ announced a consumer contest. The manufacturer or marketer has a good product, reasonable price, attractive package, a good sales force. The basic goal of most consumer-oriented sales promotion programs is to induce purchase of a brand. A number of personal care products, such as shampoos, cosmetics, toilet soaps or laundry products, such as detergent powders and cakes etc., have been introduced successfully in the last few years. Therefore sales promotion activities are undertaken by the manufacturers to encourage dealers to have more stocks of goods. Usually, it is mentioned on the pack that a certain amount is off. To retain the present position and to gain new market share, different promotional strategies may be applied. Some companies offer a free pack with purchase of a product like free soap with purchase of detergent. However, they may vary with the type of target market and points of channel. The following are the main in-store promotional activities: The product is sold at a reduced price from its normal selling price. To Counter a Competitor’s Sales Promotion Device. i. The objectives for retailers may be to carry new items, encourage off-season buying, and offset competitive promotions, build brand loyalty, and so on. An important objective of sales promotion is to encourage re-seller participation in displays and contests. He has to take attractive and effective steps in meeting the consumer in the market after taking decision relating to the nature of products, its price and its distribution system. The producer generally provides information regarding the quality, uses, different uses of the products and the price, etc. Therefore, no company can escape from sales promotion activities. To overcome the seasonal fluctuation of products. 2. store ‘club’ cards, or continuity programmes such as collecting a dinner service. It helps marketers to realize a variety of objectives. 5. To add extra value to the product and develop brand franchise. The answer to the question what is sales promotion? To supplement and co-ordinate efforts of Advertising/Personal Selling. These samples aim at inducing trial of the product. However, they may vary with the type of target market and points of channel. of the product plus some money. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. Objectives of Sales Promotion. Marketers can develop appropriate sales promotion to accomplish the objective of reducing the negative impact on sales. The various objectives of sales promotion can be summed up as follows:-, 1. This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. Premiums (Gifts) – A premium is an offer of an item of merchandise or services either free or at a low price that is an extra incentive for purchasers. Promotion Objectives. For examples, it is easy to measure the impact of discount offer on sales, but it is difficult to measure the impact of premium on the perceived value of the promoted brand. For this purpose, sales promotion plans are started. For this purpose, it provides suitable knowledge for recollection. 5. New product launches by competing companies are backed up by aggressive advertising and sales promotion campaigns. Increase in Sales – The main purpose of all promotional activities is to increase the sales of the products of the company. Consumer’s dissatisfaction about a particular brand can be removed by aggressive sales promotion programmes. The types of sales promotion techniques used by the company depend upon the sales promotion objectives set by the company. Promotional activities increase or help increase the sale by making effective upward change in the elasticity of demand of the product or service through various techniques i.e., by distributing samples, free gifts, purchase premium, discounts etc. The various objectives of sales promotion are as follows: 1. The purpose of advertising is to improve dispositions towards a brand, while the objective of sales promotion is to translate favourable attitudes into actual purchase. Objective # 2. 3. It shall attempt to generate a bondage between the awareness and perception of the consumers and the personality of the brand and its features. Price increase can often have a negative effect on sales. Thus, the price per unit of the product is reduced for the customer. To Increase Sales in Off-Seasons 14. Content Guidelines 2. Sales promotion forms all the promotion activities other than personal selling, advertising, direct selling, and public relations. 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