Importance Of Sales Promotion
We can deduce from the availed information that the hypothesis was; the sales promotion tool, competition, represents a growing phenomenon in the service industry. Results found services account for fractionally more than 7 percent (188 out of 2646 intentions) of all competitions in the survey, which leaves them rather underrepresented when considered in light of its importance in the total economy.
Financial services are the largest sector in the usage of competitions as sales promotion techniques.
Sales promotion: meaning, definition, objectives, and importance of sales promotion!.
Sales promotion acts as a bridge between advertising and personal selling. Due to the diversity of the market, the importance of sales promotion has increased tremendously. Sales promotion helps to remove the consumer’s dissatisfaction with a particular product and manufacturer. It creates a brand image in the mind of consumers and users. Sales promotional devices are the only promotional devices available at the point of purchase. The sales promotional devices at the point of purchase stimulate the customers to make purchases promptly on the spot.
Sales promotion tools vary in their specific objectives. A free sample stimulates consumer trial, while a free management advisory service cements a long-term relationship with a retailer. From the marketer’s perspective, sales promotion serves three essential roles it informs, persuades, and reminds prospective and current customers and other selected audiences about a company and its products. The relative importance of those roles varies according to the circumstances faced by a firm.
Some of the frequently asked exam questions on sales promotion and management are as follows:
“Salesmen are born. They are not made. ” discuss. Ans. In India, sales management has been gaining importance only in recent years. This apathy is due to the ‘production-oriented’ marketing policy adopted by the business firms. The conditions are changing and the marketing-guided sales management has come to play.
Sales promotion acts as a bridge between advertising and personal selling. Due to the adversity of markets, the importance of sales promotion has increased tremendously. Sales promotion helps remove the consumer’s dissatisfaction with, a particular product, manufacturer, and create brand-image in the minds of the consumers and the users.
Objectives Of Sales Promotion
The most important tool used in promotion is sales promotion. Most consumers relate ideas of marketing to the use of sales promotion techniques. The other main forms are advertising, and personal selling. The following section deals with sales promotion in detail. Image: sales promotion – meaning, definition, objectives.
everything you need to know about the meaning of sales promotion. Sales promotion has been defined as – “a direct inducement that offers an extra value or incentive for the product to the sales force, distribution, or the ultimate consumer with the primary objectives of creating an immediate sale. ”.
The answer to the question what is sales promotion? also gives a hint to sales promotion objectives, the main objective being lifting the sales temporarily. Other objectives include but are not limited to –.
Of the four ps of marketing – product, price, promotion, and place – the three goals of promotion are to inform, persuade, and remind consumers of products. Let’s look at how sales promotion can be combined with these objectives to produce results. When doc’s tomato sauce came out with a resealable package, they wanted to let consumers know. For ages, consumers had been frustrated when they had to open a can of tomato sauce, use a small amount, then rummage for a container to store the rest. Doc’s needed to inform consumers of the new packaging.
different sales promotion policies are directed towards achieving certain objectives like maintaining sales during the off-season, to increase sales during a festive season, to combat competition, to clear stocks, to improve image, to promote new products, etc.
2. Short term approach:
sales promotion tools are short term strategies to attain high sales volume immediately. Different sales promotion offers are meant for a short term purpose. Companies make special selling efforts for the specific time period by offering short-term incentives and schemes at the consumer level, dealer level, or at the salesmen level.
Sales promotions can have multiple objectives. These
can be classified under the following heads:-
Sales promotion definition is a tool used to achieve most of the five major promotional objectives discussed in the promotion decisions tutorial :
building product awareness – several sales promotion techniques are highly effective in exposing customers to products for the first time and can serve as a key promotional component in the early stages of new product introduction. Additionally, as part of the effort to build product awareness, several sales promotion techniques possess the added advantage of capturing customer information at the time of exposure to the promotion. In this way, sales promotion can act as an effective customer information gathering tool (i. e., sales lead generation), which can then be used as part of follow-up marketing efforts.
With a wide array of incentives, pricing, informational capabilities, sales promotion has the flexibility to contribute to several marketing objectives. A company can target buyers, intermediaries, and salespeople and measure the sales response of the promotion to determine their effectiveness. For example, the company can track its coupon redemption or rebate success. Many of the incentives and price promotion techniques trigger the purchase of other products.
Types Of Sales Promotions
Financing is ingenious amongst the various types of sales promotions. It is a combination of various factors. Companies which have huge resources generally act as financers. They allow customers to purchase a product on EMI or on different financing options. All this happens for a minor processing fee and less interest.
Sales promotion – rationale, types – consumer and trade promotions – sales promotion strategies and practices, cross-promotions, surrogate selling, bait, and switch advertising issues. Brand equity – concepts and criteria, building, measuring, and managing brand equity, linking advertising and sales promotion to achieve ‘brand-standing’ – leveraging brand values for business and non-business contexts.
There are many different types of sales promotion activities you can pursue. Unlike advertising, sales promotions don’t necessarily present upfront costs. Sales promotion activities are common in both consumer and business-to-business markets and can help your customers in their decision-making process. Here are some sales promotion examples for your reference:.
After reading this article you will learn about sales promotions:- 1. Meaning of sales promotion 2. Types of sales promotion.
The following are examples of sales promotions that are not classified into types just mentioned:
When we do tastings of our products so that consumers can try before they buy
when we do exhibitions or demonstrations of our products so that consumers can appreciate its operation.
Marketing managers have several options when creating a promotional campaign, and various types of sales promotions can be combined to maximize the effect of the promotions. For example, a coupon and a contest might encourage different types of consumers to buy the same product. Decisions must be made about the geographical scope and duration of the promotion. Contests and rebates need set conditions. Many states have laws governing promotions, especially contests. Marketing managers must also create and conform to a total sales promotion budget.
Before we get to the sales promotion examples, let’s take a quick look at some of the different types of sales promotions you can have. Sales promotions can be an excellent short term tactic for boosting sales revenue. They’re also a great way to persuade customers who are wavering that it’s time to buy.
Advertising, sales promotions, public relations, digital marketing, content marketing are only a few examples of marketing communications tools. In this lecture specifically, we will learn about sales promotions. Sales promotions provide incentives to the distribution channel, to the company’s own salespeople, or to the consumers. In this lecture, we will focus on the sales promotions designed specifically for consumers.
Consumer promotions encourage customers to take the final step and make a purchase. They intend to acquire and retain consumers, boost sales in short-run, clear inventory, increase awareness, differentiate from competitors, and encourage brand switching. Generating sales is a short term objective, whereas building a brand is a long term goal. In order not to harm the brand image and positioning in the long run, we need to make sure that consumer promotions are carefully designed to support them.
Holding promotions too frequently will habituate customers to buy only while the promotions are in effect. Avoiding promotions altogether will let competitors draw customers away. Both advertising and sales promotions provide consumers with reasons to buy a product or service. The difference between them is that sales promotions provide consumers with reasons to buy now, urgently. It’s also important to consider the target audience and the types of promotions to which they would be more responsive. For example, promotion-prone consumers respond to deals and will more easily switch to a brand when it is offered on a deal.
That means a competitor can offer a deal and the promotion-prone consumer will switch. Price sensitive consumers do not care about the brand name. They just want the cheapest product. Sales promotions will boost sales for promotion-prone and price-sensitive consumers. However, neither of them is loyal, and as a result, not attractive in the long run. Brand loyal consumers usually do not need a promotion to make a purchase. If they are loyal to a competing brand, a promotion is not going to convince them to switch. The best group to pursue is brand-preference consumers.
These consumers usually have a small set of brands that they prefer. Deals on one of those brands will modify their purchase behavior, and can even enhance their loyalty in the long run. There are many types of consumer promotions. We will talk about price-offs, coupons, premiums, contests and sweepstakes, and sampling activities. Price-offs are temporary reductions in the sales price of a product. Price-off promotions intend to stimulate sales, increase store traffic by attracting more consumers to enter the store, entice new consumers by reducing the financial risk of a trial, and hence encourage brand switching.
Despite the effectiveness of price-offs on stimulating sales, we should always be aware that such promotions increase sales, but not the profits. That’s why they work better with higher-margin products. Price has a signaling value. A price discount may cause consumers to perceive the product lower quality, company being in a bad situation, and even trying to liquidate stocks, and may have a negative effect on brand image. Additionally, price-offs increase consumers’ price sensitivity.
Consumers may become reluctant to pay the full price for the product. Most consumers are quite familiar with coupons. They offer consumers price savings or other incentives when the coupon is redeemed at the time of purchase. Coupons are short term in nature since most of them carry an expiration date. Coupons require consumer involvement. In most cases, involvement consists of consumers making an effort to obtain the coupon, for example, a clip from a newspaper, and then presenting it at the time of purchase. Consumers’ conscious effort to clip or redeem the coupon helps create brand awareness and engagement. Coupons are usually sent out by print media, direct mail, in or on a product package, in-store, or via internet.
To Create Market For New Products
The typical goal of marketing is to generate interest in the product and create leads or prospects. Marketing activities include:
consumer research to identify the needs of the customers
product development – designing innovative products to meet existing or latent needs
advertising the products to raise awareness and build the brand.
Sales focuses on selling prospects and growing revenue among current customers, while marketing departments typically develop materials and create lead generation programs. Marketing teams frequently work to support sales teams. Depending on the organization, sales and marketing may make up one department. They are the arm of the company that works to drive profits and revenue for the organization by selling products or services.
Increased market segmentation, information technologies, and digital communications have created new ways of promoting products across different media. Today, organizations can create online banner advertisements, social networking websites, blogs, and search engine optimization campaigns to promote their products and services. However, traditional promotional tools such as special events, celebrity endorsements, in-store coupons, and newspapers are also employed to entice customers to purchase goods. For example, retailers often use promotional tactics including discounts, store rebates, free items, contests, and other special offers to drive new sales and repeat purchases.
Consumer-to-business marketing or c2b marketing is a business model where the end consumers create products and services which are consumed by businesses and organizations. It is diametrically opposed to the popular concept of b2c or business- to- consumer where the companies make goods and services available to the end consumers.
Customer journeys are the sum of individual personalized experiences with your brand. With marketing automation, you can tailor every interaction based on customer data to create ongoing, seamless journeys through every brand touchpoint. Marketing automation creates relevant content and messaging at scale across many channels. Send email messages with dynamic content that personalizes far beyond sticking a customer’s first name in the subject line. Integrate mobile messaging with your email and social campaigns through SMS/MMS, push notifications, and group messaging. Generate digital ads that appear for the right person at the right time. Plus, recommend the right products on your website for each individual user — automatically.
To Take Products To New Markets
Marketers study the market to determine the demand for a new product and identify target markets so products can be marketed more effectively to the right type of customers. One of the most common mistakes made by first-time entrepreneurs is that they assume their product or service will appeal to everybody, but that’s never the case. There will always be customer types and demographics that your offering will appeal to more than others, and focusing your attention on appealing to these people is always the most cost-effective way to find success.
The point of purchase promotions refers to any promotions that take place within a store. Examples of point of purchase promotions would be an in-store demonstrations or trial of product. Often supermarkets will offer in-store trials of products. In the case of free trials within a supermarket, an organization may use this form of promotion because the customer feels a sense of obligation to purchase the product after the free trial.
Many businesspersons usually think of foreign markets vaguely, like they want to shift to Asia or they want to increase their growth by offering their products to Europe. It is problematic to take things too simply. Europe can mean the European Union, western Europe, eastern Europe, and so on and so forth. Consumers always identify themselves at the local level and marketing teams have to remember that each country has its own norms, laws, payment types, and particular business practices.
Sales Promotion Techniques Targeted To Consumers
In business-to-business (b2b) marketing, sales promotions are typically called trade promotions because they are targeted to channel members who conduct business or “trade” with consumers. Trade promotions include trade shows, conventions, event marketing, trade allowances, training, and special incentives given to retailers to market particular products and services, such as extra money, in-store displays, and prizes.
Of all the different promotion techniques marketers can use to educate, persuade, or remind consumers and retailers of their products, they often spend the most on sales promotion. Sales promotion is promotional activities that give some type of incentive to intermediaries or consumers to encourage immediate sales.
A trade sales promotion is targeted at resellers—wholesalers and retailers—who distribute manufacturers’ products to the ultimate consumers. The objectives of sales promotions aimed at the trade are different from those directed at consumers. In general, trade sales promotions hope to accomplish four goals:
1) develop in-store merchandising support, as strong support at the retail store level is the key to closing the loop between the customer and the sale.
2) control inventory by increasing or depleting inventory levels, thus helping to eliminate seasonal peaks and valleys.
3) expand or improve distribution by opening up new sales areas (trade promotions are also sometimes used to distribute a new size of the product).
4) generate excitement about the product among those responsible for selling it. Some of the more common forms of trade promotions—profiled below—include point-of-purchase displays, trade shows, sales meetings, sales contests, push money, deal loaders, and promotional allowances.
Meaning of Sales Promotion
While advertising presents a reason to buy a product, sales promotion offers a short-term incentive to purchase. Sales promotions often attract brand switchers (those who are not loyal to a specific brand) who are looking primarily for a low price and good value. Thus, especially in markets where brands are highly similar, sales promotions can cause a short-term increase in sales but little permanent gain in market share. Alternatively, in markets where brands are quite dissimilar, sales promotions can alter market shares more permanently.
The use of promotions rose considerably during the late 20th century. This was due to a number of factors within companies, including an increased sophistication in sales promotion techniques and greater pressure to increase sales. Several market factors also fostered this increase, including a rise in the number of brands (especially similar ones) and a decrease in the efficiency of traditional advertising due to increasingly fractionated consumer markets.