Meaning, Importance& Methods of Sales Promotion

Meaning of Sales Promotion

Sales promotion is defined as activities which include advertising and publicity aimed at stimulating consumer purchasing and effective selling by dealers. Sales promotion includes free samples, a premium on sale and dealer incentive, contests, fairs and exhibitions, public relations activities, etc. Sales promotions are those activities, other than advertising and personal selling that stimulate market demand for a product. The basic purpose is to stimulate on the spot buying by potential customers through short-term incentives. These incentives are essentially temporary and non-recurring nature.

According to American Marketing Association, “Those marketing activities, other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness, such as displays, show and exhibitions, demonstration and various non-recurrent selling efforts not in an ordinary routine.”

According to W.J. Stanton, “Sales promotion defined as demand stimulating devices to supplement advertising and facilitate personal selling.”

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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 about a particular product and manufacturer. It creates a brand image in the mind of the consumers and the 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 purchase promptly on the spot.

The importance of sales promotion in business organization can be briefly shown below:

• Spreads information:

The first function sales promotion is to spread the important information about the availability, characteristics and uses of a particular product. Spreading the information about the product helps to do the marketing activities easily. It is important to provide the information about the product in the market.

• Stimulates demand:

Sales promotion helps in stimulating the demand for the product in the market. Sales promotion activities are designed to create interest in new products and to persuade people to buy them.

• Customer satisfaction:

Sales promotion helps in satisfying the consumers. In the promotion of selling activities, the new product is available in the market. The consumer has the desire to have a new product. If they consume the new product, they will get satisfied in it. The new product in the market provides satisfaction to the customer.

• Stabilization of sales volume:

Sales promotion helps to stabilize the sales volume. It is an important purpose of sales promotion to help in establishing sales volume by reassuring the customers about the quality and price of the product. It is possible that a customer using a particular brand may buy another because the another brand is promoted in an effective manner.

• Performance appraisal or marketing control:

Sales promotion helps in the marketing control too. It is important to have market control about the performance of the situation of the market.Performance in the market helps to raise the condition of the market which is approved by the customer.

Methods of Sales Promotion

The method of sales promotion can be clearly shown with the help of the following diagram:

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Consumer promotions are the consumer incentive plans to induce them to buy more. A consumer premium plan can be best described as an article of merchandise offered to the consumer as an incentive to buy more and more regularly over a short span. Premiums are intended to generate immediate purchase decisions. The method of consumer promotion can be shown briefly below:

• Samples:

Distribution of sample is one of the methods for promotion. Many marketers offer free samples of their product to the selected people in order to popularize their products. The sample may be delivered door to door, offered in retail stores or fairs. The sample is helpful for introducing new products such as soaps, drugs, cosmetic, perfumes, tea, etc. Since the distribution of sample is very costly but it is one of the best methods for the consumer promotion.

• Discount or price off:

The discount system is also another method of consumer promotion. Consumers are basically attracted towards the discount.In order to increase sale, many producers introduce price off offer to the consumers. Under this, the product is offered at a price lower than the normal price. For example, during off season, ceiling fans and refrigerators may be offered 30% to 40% off price.

• Coupons:

Coupon is also another method of consumer promotion. Coupon is a certificate that entitles its holder to a specified saving on the purchase of a specified product. It may be issued by the manufacturers either directly by mail or through the dealers. The holders of coupons can go to the retailers and get the product or service at a cheaper price. But many retailers do not use this method because it involves financial and accounting problems for them.

• Quantity deals:

Quantity deals are also the method for consumer promotion. Sometimes, salespersons device special package. They give an extra quantity of the product to the buyer at the same price. These deals come in the form of ‘buy three get one free’ offer for beauty soaps like Dettol and lux'

• Public relation:

Public relation is also the method for consumer promotion. The activities of public relationship strive for creating a good image of the enterprise in the eyes of the customers and the society. These activities are aimed at immediate demand creation.Space donated by the business houses in the published media in spreading some noble ideas is also an activity in public relation.

• Quiz contests:

It is also another method for consumer promotion. This type of activity is used for the consumer knowledge and attraction. There may be customers’ contest, salesmen contest, and dealers contest. Contests for salesmen and dealers are intended for inducing them to devote greater efforts for obtaining new sales ideas in the task of sales promotion. Contest for consumers is held on the subject of writing a slogan on the product.

• Trade fairs and exhibitions trade:

Fairs and exhibitions provide an important method of sales promotion to the businessmen. Businessmen can demonstrate their products explaining their special features and usefulness. They can also distribute free literature to introduce their firm and products to the public. This device of sales promotion has become very popular in Nepal and other developing nations as well.

• Display of products:

Display of goods is also a good method for the promotion of consumers. Goods can be displayed in artistically laid out windows at the shop fronts or at important busy centers like railways stations and bus stops. Large showrooms are organized by big manufacturers and wholesalers in the main markets to advertise their products and attend to the queries of the potential customers.

Methods of Trade Promotion

If the promotional activities are directed at trade partners or channel members, like distributors, wholesalers or retailers, it is known as trade promotion. The basic purpose of trade promotion is to build ‘push’ in the channels so that they sell the manufacturers products with great enthusiasm. It is carried out by the manufacturers by providing various incentives to trade partners to make them work for the success of their brands.

The method of trade promotion can be briefly shown below:

• Dealer premiums:

Dealer premium is one of the methods for trade promotion. In some cases, certain premiums are offered to the retailers. Certain units of the products are given free to the retailers for keeping large stocks of goods. In addition to dealer premiums, the other sales promotion activities may also be undertaken.

• Advertising material:

Advertising of products also helps in the promotion of trade. It is usual practice with many producers of goods to supply adverting material to their dealers, e.g. sign boards, banners, etc. seen mostly for Pepsi, coke, etc.

• Store demonstration:

Store demonstration also helps in the promotion of trade. Under it, sales personnel of the manufacturer carry out a special demonstration of their products for the benefit of dealers and consumers. Both dealers and consumers are involved in it. It helps to increase the trading activities in a rapid way.

• Special displays:

Special displays about the products also help in the promotion of trade activities. During trade fairs or exhibitions, special displays and shows of the company’s products may be arranged to popularize them.

• Special discounts:

Special discounts on the products also help in the promotion of trade system. During the promotion campaign, a manufacturer may offer special discounts on purchase made by the retailers.Special discounts increase the profit margin of the dealer who gets encouragement to push up the sales of the product.

• Push money:

Push money also helps in the trade promotion. The dealers may be given a specific amount of money to push the sales of the manufacturer’s products. A cash reward is given for pushing the product among the buyers when there is tough competition in the market.

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References:

Koirala, Dr. Kundan Dutta. Elementary Marketing. Kathmandu: Buddha Academic Publishers and Distributors Pvt. Ltd, 2014.

Thapa, Gopal, Dipendra K. Neupane and Dilli Raj Mishra. Introduction to Marketing. Kathmandu: Asmita Books Publishers and Distributors (P) Ltd., 2014.