A premium may be inside the package, outside it or received through mail. Sales promotion is that “something extra” (2 + 2 = 5). Say, a cheap ice cream cone offered at McDonald’s attracts people inside and then they can try the other items on the menu. Producers can organise competitions or contests among salespersons to encourage them to generate more sales from new customers. Techniques 8. The rest forms another category, e.g., price-off packs, trade allowances, etc., gifts not related to product. Briefly review how the main tools of sales promotion (e.g., sampling and couponing) can be used in global markets. To illustrate, in-pack premium is better to promote sales of a specific pack while price-off is better to clear unsold stocks. The same holds true for markets. 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. A coupon with a sample is twice as effective as a coupon alone. Samples should be correctly targeted, or else they go waste. 3. Sales-promotion objectives are derived from broader promotion objectives which, in turn, come from marketing objectives. Perhaps, the most difficult part in managing sales promotion is to decide which particular sales promotion tools should be used for achieving the specific objectives; which of these tools can be and should be combined to produce a synergistic effect, and how can these be delivered to the target audiences, that is, consumers, resellers, or the sales force. What about sales returns after the contest period? The distribution channel is offered sales inducements to motivate them to support a brand by providing it a more than their usual push. SP designed to suit local market conditions is more effective. To encourage trade to support the product. This activity aims at attracting consumers to other or newer brands, seasonal and unseasonal goods. It is just proving the maxim ‘there is no brand loyalty which two cents off can’t overtake’. The focus of advertising to create reason for purchase the focus of promotion is to create an incentive to buy. The programme thus developed should be pretested in order to check the effectiveness of the programme. Trading stamps are given by the seller to consumers. 5. However, sales force is expensive and companies are looking forward to managing them in an efficient and effective manner. The nature of promos changed. The market price of the product should not be increased before the promo so as to include the cost of the gift. Companies can offer a car or consumer durables for generating certain percentage of sales in a particular month or quarter. Promotion is tactical and short-term. Contests are the promotion events that give consumers the chance to win something such as cash, trips or goods. Promotion is a comprehensive term and covers the entire gamut of advertising, publicity, public relations, personal selling and sales promotions. 8. Free samples are given to consumers to generate their interest in the product. Sales volume should not be the only goal of each contest. 4. Cash refunded offer is stated on the package. It is also known as a push strategy, which is directed at the dealer network so that they push the brand to the consumers by giving priority over other competitor brands. Couponing is useful to promote a new concept. “Marketing Management” Sales Force and Promotion Prepared by: Jonah C. Pardillo 2. Privacy Policy 9. Sales promotions have temporary and short life not exceeding three months. In using sales promotion, a company must establish the objectives, select the tools, develop the programme, pre-test the programme, implement and control it, and evaluate the results. 5. Advertising is salesmanship in print, but has moved too far from it. Everything must be specific. Later, the announcement of a few more prizes, writing of reminders, etc., generate an air of expectancy. The constant promotion hinders a relationship between the brand and the consumer. 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. He has to attract prospective buyers, urge them and persuade them with the above factors to buy his product. SP got a little share. John Paul Jones in his seminal work “What’s in a brand”? The annual expenditure for sales promotion is rising rapidly. Same prizes for each contest are to be avoided. 3. The company’s marketing objectives and strategies influence the development of sales promotion objectives and strategies. To stimulate replacement demand, a company gives a certain amount of the price of a new product in exchange of the old product. Too much of it affects the long-term brand equity. Sales promotion has dual objectives; 1. This is called a construct. Copyright 10. Free in mail premium means a premium item will be sent by mail to consumers who present proof of purchase to the manufacturer. India suits this definition right now. 10. Pre-Testing the Sales-Promotion Programme, 5. Apart from inducing trials, coupons are used to retain the existing customers. 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. Pre-testing ascertains cost-effectiveness of various alternatives. At the level of sales representatives, SP tools are incentive programmes and sales contests of representatives. (ii) The trade is motivated to carry a larger inventory. Learn about:- 1. The marketer has to determine the size of the incentive, conditions for participation, duration of promotion, the distribution vehicle and timing of promotion, total sales-promotion budget and the incentive cost in order to arrive at a full programme. Since late 2000, there has been a conscious attempt to curtail the promo expenditure and use the funds to build the brands. The company must make sure that the benefit of the scheme should reach the consumers for whom the scheme is meant. This can be done by asking the consumers to rate or rank different possible or trial tests that can be run in limited geographical areas. Mostly, the schemes are purchase- linked. Promos magnify brand value continuously. 5. Sales promotion was so far treated just as a tactical tool. It can arouse enthusiasm, create a buying mood or spark an immediate reaction from consumers, dealers and the firm’s salesperson. Upgrade existing accounts to high ticket products. (iii) Free goods on a certain quantity, push money and free speciality advertising items. Some goals are easier for accomplish­ment than others (e.g., territory potential may be different and hence, high potential leads to easy accomplishment of goals.). It is an integral part of the marketing effort. Advertising has four characteristics: it is persuasive in nature; it is non-personal; it is paid for by an identified sponsor; and it is disseminated through mass channels of communication. (i) The trade is motivated to carry the brand. Contest is not an intelligence test, and so should be absolutely clear. Intangible benefits, e.g., charity or personality associations. But BTL generates sales at high costs and is not sustainable. There was a joint concert of Nescafe and Samsung. Between February 26th and 28th CII has organised the International Engineering & Technology Fair (IETF) for businesses in engineering and manufacturing industry to promote Business-2-Business (B2B) networking (CII, 2014). Marketers must be on the lookout for ways to rise above the clutter. 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. 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. Surprisingly, a wide range of below-the-line activities account for a large share of the total promotional mix all over the world. Companies usually, therefore, pay additional handling charges to the retailers per coupon handled. Techniques 12. Pro-Active or Reactive; 8. Consumer promotion helps to penetrate the market. The campaign should be directed to the consumers for whom it is meant. It also builds a top-of-the-mind awareness. The market is to be assessed soon after the scheme begins. Sales Promotion – Options of Promotion Objectives, The company made Ogilvy writes a manual for other salesmen. Names of consumers are included in a list of prize winning contest. Many of you must be confused about promotion and sales promotion. Every achievement must be rated in terms of points. The schemes are all product specific. 9. (1) Consumer Promotion- Activities intended to educate or inform the consumers and those intended to stimulate the consumers. He may have a good sales force. Prize on zonal basis. The Govt. It is to be seen that where a contest does not contravene the MRTP Act, and does not come under the unfair trade practices. a highly fragile, perishable or bulky product. (i) Retailers who launch their own scheme can be persuaded to provide a special support to the company’s products. They build-up buyer-seller relationship. Major Sales Promotion Techniques Companies use various sales promotion techniques to promote their products. What has succeeded may not necessarily succeed in future too. In business, there is a growing realization that promos have been stretched too much. 7. It is an additional financial reward to sales force (or salesmen) for achieving sales beyond a pre-determined level. However, every offer must start by being specific as to what objectives are intended to be achieved. Besides, promos occupy shelf-space. User 6. Though sampling is effective, producing numerous samples of a product is quite expensive. Sales promotion is often thought as special aggressive selling efforts to accelerate sales. Even price-off may tell upon the quality, because the manufacturer is likely to cut corners somewhere. 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. Different methods like bonus, sales-force contest and sales meetings can be applied as sales-force promotion. 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. An ongoing promotion, e.g., low prices everyday becomes a part of the brand property or normal trade practice. 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. The quality must be specified. The product manager type organisational structure in which product managers are constantly goaded to sell more has given a boost to SP. Brand buying is just a transaction. To increase sales of any product, producers adopt different measures like distributing samples, gifts, coupons, bonus, etc. Today, sales promotion is attracting more and more of the promotional budget. We have to use sales promotion sparingly. It is, therefore, crucial that these contests are handled properly. In this article we will discuss Sales Promotion:-. Similarly, Videocon offered Rs.7,000 off on its No-frost model of refrigerator against an old fridge. The contest will be held on a branded channel on Youtube and will use other social media like Facebook and Twitter. (b) Competitors arise up their sales promotion. There are three types of sales promotion strategies’. They are to be used at the right time in the right measure. Types 10. They have seldom reuse values. Producers of new brands or innovative products are introduced by holding fairs and exhibitions. 25 per cent budget is dedicated to BTL. For example, a 15 to 60 percent off on clothes before some festive season in retail shops are examples of sales or sales promotion. Number of entries received for the consumer contest, etc. The reusable package itself serves as a premium. The sponsors, therefore, should carry-out these tasks. Because the sales message is disseminated through the mass media–as opposed to personal selling–it is viewed as a much cheaper way of reaching … The most prominent reason is an emphasis on quarterly results expected of senior management. Personal meeting with the executives are arranged. But because it pays rich dividends, sellers have accepted it as an important item in the marketing-mix. So, generally promos are not offered on premium products. One has to communicate with the consumer through advertisements and POPs at the retail level. Sales promotion directed towards the sales people is referred to as sales force promotions. Instead of giving instant gratification, the consumers are made to wait to see whether they have won some coveted prize. The buyer purchases the product and submits the evidence of purchase with entry form for contest. (h) POP material and its display need supervision. Demonstrations are provided free of cost. With more and more brands flooding the market, the pressure to occupy display space at retail outlets is more. To effect sales of a specific pack size (Vicks large size bottle) or in a specific market(s). The company can use sales promotion to achieve many objectives. There are motivational tools linked to sales that achieve a certain level or cross that level. Mostly in-house journals, circular letters, personal letters motivational letters and reminders are used to promote the contests. They introduce new product by asking the prospects to state the reasons for the purchase of the product. Channel pilferage is very common here. Promos should be designed keeping in mind the brand objectives and consumer behaviour. Sales promotion is generally defined as those marketing activities that provide extra values or incentives to the sales force, the distributors, or the ultimate consumer and can stimulate immediate sales. In-pack premiums are separately given, where the retailer has to extend cooperation. There is no consumer empathy with the brand. Sales Representative Level Promotion 13. Goods are sold at reduced prices during slump season. The intention is to increase sales, make a large customer base, encourage trial, encourage repeat purchases to stimulate consumers' purchase. Sales promotion strategies can be divided into three broad types. The lots are drawn and the winners get prizes. (e) Booking of shelf-space of prominent dealers must be done sufficiently in advance. The consumers might get alienated from the superior benefit it actually offers. Competitive pressure also calls for the use of SP. These are redeemable at the stamp redemption centres. Advertising expenses so far accounted for more than 60 p.c. Sales promotion aimed at consumers is called ‘consumer sales promotion‘. In direct marketing, couponing also helps to evaluate the effectiveness of the campaign based upon the response rate. This involves offering products to consumers at discounted or reduced prices by a certain percentage from the regular price of the product. Therefore, companies have to be careful in designing and structuring sales force. Increase units sold per representative. The parties should be clear about goals and role of one another. Promos have certain limitations. Sales promos are now related to brand building, keeping additional sales volumes just incidental. It gives direct inducement to take immediate action now rather than later. Major Decisions and Other Details. Developing the Sales-Promotion Programme, 4. The techniques could be those where the measurement of results is straightforward, or difficult to measure. Overenthusiastic representatives may resort to dumping, overloading inventories, cheating and neglecting of customer service. Some activities like event associations do enhance the brands. 3. But used improperly, they demoralise the representatives. Large sales force with a hierarchical order calls for contests for different groups, and eligibility criteria restrict the participation to each group. Demonstration of products induces customers to buy. Marketing objectives and strategies are related to the marketing-mix of a company, while the promotion objectives and strategies related to the promotion-mix only. It aims at stimulating consumers. Two products which are related or unrelated can be bundled together, and either product may induce a buyer to buy the product. Sales-promotion involves a lot of expenditure. They are also sent by mail or given to customers in the retail store itself. Advertising messages may promote the adoption of goods, services, persons, or ideas. Agencies must sell a generic concept of BTL to clients. In a bundle, one product works as an effective awareness builder and a trial inducer for the other product. Free samples are given to consumers to generate their interest in the product. Premium may be of several kinds — direct premium, reusable container free in mail premium, a self liquidating premium, trading stamps, etc. (b) The terms / schemes should discourage unscrupulous trade practices on the part of trade. To gain additional market share or additional revenue. Sales promotion objectives could be either pro-active or reactive. Sales Promotion Tools and Techniques – 12 Commonly Used Tools: Coupons, Free Samples, Price-Off Offer, Fairs, Exhibition, Free Gifts, Competitions and a Few Others. The retailers have also realised that coupons attract customers to their shops, who are likely to buy other commodi­ties and brands as well. Hence, sales promotion aims at stimulating the purchasing at the point of sale and dealers’ effectiveness at the retail channel of distribution. So basically, these are different tools with purpose of encouraging consumers, dealers as well as the company’s sales force. Why Use Sales Promotion? The marketer must make further decisions to define the full promotion programme. 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. In-pack premium has a con­straint. Trade-oriented sales promotion programs are directed at the dealer network of the company to motivate them to sell more of the company’s brand than other brands. Sales promotion is designed to be used as a short-term tactic to boost sales – it is rarely suitable as a method of building long-term customer loyalty. SALES PROMOTION: - Consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade. Securing additional shelf-space and added display. These tools are unique in their way and directed differently to these three groups. One has to communicate with the consumer through advertisements and POPs at the retail level. 1. In the mid-90s, promos were just some trivial giveaways. The retailers are poor in administration of complete schemes, whereas the wholesal­ers are poor at generating the primary demand. Results of promo should be lessons in marketing. Trade incentive could be price off, free goods and allowances. Make your customer fat (sell more to the existing customer). Promotional support is a must for any SP scheme. Sales promotion refers to temporary incentives offered by an organization to either their customers or their resellers, with the intention of increasing the sales of their products. These rewards can be given for individual performances and for special achievements. Sales promotion is often thought as special selling effort to accelerate sales. The question that needs consideration is whether exchange offers ensure loyalty. Agencies of late have set up BTL divisions, but these lack depth. Sales promotion alone cannot build up brand loyalty. Benefits 10. Promos should be integrated to products and advertising. Sales promotion is the process of persuading a potential customer to buy the product. To improve a product’s visibility on the shelf. The present contest will earn the winner a fellowship during which the winner will help Ogilvy write a guide to selling in the 21, Sales Promotion – Sales Representative Level Promotion, 1. Rewarding just one person is to be avoided. Consumer level sales promotional tools are: (d) Self-liquidating premium (item sold below its normal retail price). Coupons are used to attract new customers. Sales promotion is that “something extra” (2+2=5). Sales promotion ideas and examples to increase sales. Retailers thus demand more S.P efforts from their suppliers. Components 4. Promos can be evaluated by comparing sale volume across 3 time periods – pre-promo, during the promo, post-promo. 3. They are generally directed at children. It stimulates positive attitudes toward the product. Such salesman are sales-force. Consumer promotion can be offered either by a manufacturer or a retailer. (iii) At the level of salespersons, it is called sales force promotion, e.g., salesmen’s contests, bonus and sales rallies. The earliest redemptions are incremental sales. Sales promotion operates at three levels: (i) At the level of consumer, it is called consumer promotion, e.g., free gifts, samples, price-offs. It is not an expenditure, it is an investment which can pay rich dividends. Types of Programs 7. 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. Explain how sales promotion campaigns are developed and implemented. Sales-force promotion Manufacturers appoint salespersons to sell or distribute their products. 20,000 on the car would have smacked of an inferior quality. 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