A STUDY ON THE

EFFECT OF
PROMOTION
TECHNIQUES OF
PVT COMPANIES
ON CONSUMERS

CONSUMER SALES PROMOTION METHODS

Samples, Free Product and Premiums
Sampling and free trials give customers the opportunity to experience products,
often in small quantities or for a short duration, without purchasing the product.
Today, these methods are used in almost all industries and are especially useful
for getting customers to try a product for the first time.
Some promotional methods offer free products but with the condition that a
purchase be made. The free product may be in the form of additional quantities of
the same purchased product (e.g., buy one, get one free) or specialty packages
(e.g., value pack) that offer more quantity for the same price as regular packaging.
Another form of sales promotion involving free merchandise is premium or "giveaway" items. Premiums differ from samples and free product in that these often do
not consist of the actual product, though there is often some connection. For
example, a cell phone manufacturer may offer access to free downloadable
ringtones for those purchasing a cell phone.

Coupons
Most consumers are quite familiar with this form of sales promotion, which offers
purchasers price savings or other incentives when the coupon is redeemed at the
time of purchase. Coupons are short-term in nature since most (but not all) carry
an expiration date after which the value may not be received. Also, coupons
require consumer involvement in order for value to be realized. In most cases
involvement consists of the consumer making an effort to obtain the coupon (e.g.,
clip from newspaper) and then presenting it at the time of purchase.

Coupons are used widely by marketers across many retail

industries and reach consumers in a number of different
delivery formats including:

Free-Standing Inserts (FSI) Here coupon placement occurs loosely (i.e.,

inserted) within media, such as newspapers and direct mail, and may or may
not require the customer to cut away from other material in order to use.

. Cross-Product These consist of coupons placed within or on other

products. Often a marketer will use this method to promote one product by
placing the coupon inside another major selling product. For example, a
pharmaceutical company may imprint a coupon for a cough remedy on the box
of a pain medication. Also, this delivery approach is used when two marketers
have struck a cross promotion arrangement where each agrees to undertake
certain marketing activity for the other.

Printout A delivery method that is common in many food stores is to

present coupons to a customer at the conclusion of the purchasing process.
These coupons, which are often printed on the spot, are intended to be used
for a future purchase and not for the current purchase which triggered the
printing.
Product Display Some coupons are nearly impossible for customers to
miss as they are located in close proximity to the product. In some instances
coupons may be contained within a coupon dispenser fastened to the shelf

holding the product while in other cases coupons may be attached to a

special display where customers can remove them (e.g., tear off).
Internet Several specialized websites, such as HotCoupons.com, and even
some manufacturers sites, allow customers to print out coupons. These
coupons are often the same ones appearing in other media, such as
newspapers or direct mail. In other cases, coupons may be sent via email,
though to be effective the customers email program must be able to receive
HTML email (and not text only) in order to maintain required design
elements (e.g., bar code).
Electronic The Internet is also seeing the emergence of new non-printable
coupons redeemable through website purchases. These electronic coupons
are redeemed when the customer enters a designated coupon code during the
purchase process.

Rebates
Rebates, like coupons, offer value to purchasers typically by lowering the
customers final cost for acquiring the product. While rebates share some
similarities with coupons, they differ in several keys aspects. First, rebates are
generally handed or offered (e.g., accessible on the Internet) to customers after a
purchase is made and cannot be used to obtain immediate savings in the way
coupons are used. (So called instant rebates, where customers receive price
reductions at the time of purchase, have elements of both coupons and rebates, but
for our purposes we will classify these as coupons due to the timing of the reward
to the customer.)

 Promotional Pricing
One of the most powerful sales promotion techniques is the short-term price
reduction or, as known in some areas, "on sale" pricing. Lowering a products
selling price can have an immediate impact on demand, though marketers must
exercise caution since the frequent use of this technique can lead customers to
anticipate the reduction and, consequently, withhold purchase until the price
reduction occurs again.

Trade-In
Trade-in promotions allow consumers to obtain lower prices by exchanging
something the customer possess, such as an older product that the new purchase
will replace. While the idea of gaining price breaks for trading in another product
is most frequently seen with automobile sales, such promotions are used in other
industries, such as computers and golf equipment, where the customers exchanged
product can be resold by the marketer in order to extract value.

Loyalty Programs

Promotions that offer customers a reward, such as price discounts and free
products, for frequent purchasing or other activity are called loyalty programs.
These promotions have been around for many years but grew rapidly in popularity
when introduced in the airline industry as part of frequent-filer programs. Loyalty
programs are also found in numerous other industries, including grocery, pizza
purchasing and online book purchases, where they may also be known as club card
programs since members often must use a verification card as evidence of
enrollment in the program.

Many loyalty programs have become ingrained as part of the value offered by a
marketer. That is, a retailer or marketing organization may offer loyalty programs
as general business practice. Under this condition loyalty program does not qualify
as a sales promotion since it does not fit the requirement of offering a short-term
value (i.e., it is always offered). However, even within a loyalty program that is
part of a general business practice, a sales promotion can be offered such as special
short-term offer that lowers the number of points needed to acquire a free product.

Point of purchase

Point-of-purchase marketing, also known as POP marketing or marketing at retail,

uses in-store displays and other last minute marketing ploys to influence the
customer to choose a specific brand or to make an impulse buy point-of-purchase
marketing displays must be attention catching and constantly evolving. Once the
customer sees the same display for a few weeks, it becomes inefficient. Change the
offer regularly, rearrange the display and keep it interesting. Quantity discounts
and buy-one-get-one-free offers are a good example of offers that must be changed
regularly to continue to influence customers. If the sale is regularly available,
customers will not feel the urgency to buy additional items to get the discount.

TRADE PROMOTION TOOLS

The prime objectives of trade promotion are to push the product through the
marketing intermediaries and also to get them to market the product aggressively.
The other name for trade promotion is dealer promotion. One reason for the
increase in sales promotion is the power shift in the market place from

manufacturers to retailers. Manufacturers use a number of techniques to service

the cooperation of wholesalers, retailers or the middlemen.

discount
It refers to the straight reduction in price on purchases during a stated period
of time. Dealers can use discount for immediate profit, for advertising, or for
price reductions to their customers.

Allowance

It refers to promotional money paid by manufacturers to retailers in return for a

agreement to feature the manufacturers products in some way. For e.g. advertising
allowance and display allowance.

Gifts, awards and cash prizes

Dealers who have attained success in the target sales fixed by the
co. are honored by giving awards, and cash prizes.

SALES FORCE
Bonus
Sale personnel are issued bonus on the basis a sales
target. Sales man attaining this target are eligible to
get bonus.
Gifts
Sales men will be given gifts for inducing them to
boost the sale of the product
SALES FORCE MEET
Sales force meet organized by the companies

STATEMENT OF THE PROBLEM

Sales Promotion as a Marketing tool is gaining prominence over other elements in
Promotion Mix viz., Advertisement, Publicity or Public Relations, Personal Selling
and Direct Marketing in recent years. This is evidenced by the proliferation of
sales promotional offers in the market during Festival and Off Seasons to induce
trial and sometimes to shift in time the purchase decisions of consumers.
Consumers are found to advance or postpone their purchase based on Sales
Promotion offers.
The broad agenda of this research is to study the influence of specific forms
of sales promotion on the perceived by private companies
.Traditional marketing theories suggest that sales promotion results in the
dilution of Brand Equity. However, the specific impact of Sales Promotion
on Brand Equity of competing brands on various dimensions is notable by
insufficient research attention. This study attempts to bridge this gap. Brand
Equity in laymans terms is synonymous with credibility of the brand in the
minds of consumers.

SCOPE OF STUDY
Sales promotion is a specific activity that can be described as the making of a
featured offer to defined customers within a specific time limit. In other words, to
qualify as a sales promotion, someone must be offered something that is above and
beyond the core product or service, rather than just being offered something that is
an everyday aspect of trade, such as delivery or normal credit terms. Furthermore,
the promotional offer must include benefits not inherent in the product or service.

This includes the intangible benefits offered in advertising, such as adding value
through appeals to imagery.

OBJECTIVES
Where advertising offers a reason to buy, sales promotion offers an incentive to
buy. Sales promotion includes tools for consumer promotion, trade promotion, and
sales force promotion .Most companies are sending more on sales promotion than
advertising and this trend is expected to continue. Sales promotion is always the
outcome of large-scale production, which in turns lowers the cost.
Some of the main objectives of sales promotion are Building Product Awareness Several sales promotion techniques are
highly effective in exposing customers to products for the first time and can
serve as key promotional components 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.
Creating Interest Marketers find that sales promotions are very effective
in creating interest in a product. In fact, creating interest is often considered
the most important use of sales promotion. In the retail industry an
appealing sales promotions can significantly increase customer traffic to
retail outlets. Internet marketers can use similar approaches to bolster the
number of website visitors. Another important way to create interest is to
move customers to experience a product. Several sales promotion

techniques offer the opportunity for customers to try products for free or at
low cost.
Providing Information Generally sales promotion techniques are
designed to move customers to some action and are rarely simply
informational in nature. However, some sales promotions do offer customers
access to product information. For instance, a promotion may allow
customers to try a fee-based online service for free for several days. This
free access may include receiving product information via email.
Stimulating Demand Next to building initial product awareness, the most
important use of sales promotion is to build demand by convincing
customers to make a purchase. Special promotions, especially those that
lower the cost of ownership to the customer (e.g., price reduction); can be
employed to stimulate sales.
Reinforcing the Brand Once customers have made a purchase sales
promotion can be used to both encourage additional purchasing and also as a
reward for purchase loyalty (see loyalty programs below). Many companies,
including airlines and retail stores, reward good or preferred customers
with special promotions, such as email special deals and surprise price
reductions at the cash register.

DEFINITION AND SCOPE OF SALES PROMOTION

Of all methods of promotion mix, sales promotion is the only method that makes
use of incentives to complete the push- pull promotional strategy of motivating
the sales force, the dealer and the consumer in transacting a scale. Push strategy
involves pushing the product through distribution channels to final consumers. Pull
strategy is a promotion strategy that calls for spending a lot on spending a lot on
advertising and consumer promotion to build up consumer demand. Sales
promotion is an activity or material that offers consumers, sales persons or
resellers a direct inducement for purchasing a product. This inducement might take
place in the form of coupon, refund, demonstrations or display.
According to kolter and Armstrong, sales promotion consists of short
term incentives to encourage purchase or sales of a product or service. Sales
promotion has been defined as a direct inducement that offers an extra value or
incentive for the product to the sales force, distributions, or the ultimate consumers
with the primary objective of creating an immediate sale. Sales promotion as
demand stimulating devices designed to supplement advertising and facilitate
personal selling. Sales promotion refers to the selling activities connected with the
promotion of sales but excludes personal selling advertising and publicity.
The term sales promotion should not be confused with
promotion. Sales promotion is only one aspect of the large area of promotion
which also includes advertising, personal selling and public relations. Sales
promotional techniques are used in conjunction with advertising and personal
selling to stimulate purchases and build a positive image for the organization. thus
in specific sense , it refer to those activities that supplement both personal selling

and advertising and coordinate them and help to make them effective such as
display, shows and exhibitions ,demonstrations, free samples , coupons,
premiums and other non-recurrent selling efforts not in the ordinary routine. Sales
promotion attempts to maximize sales volume by motivation customers who have
not responded to advertising. Sales promotions are conducted by producers and
middlemen.
Sales promotion can be broken into three categories:
consumer-oriented, trade-oriented, and sales- force oriented promotions.
Consumer oriented sales promotion tries to inform, educate and stimulate the
ultimate consumer. These includes samples coupons, premiums, contests ,
refunds, and refunds and rebates, price-offs, bonus packs and others
programmes. trade or dealer oriented promotion aims at increasing the interest
and enthusiasm of dealers and distributors. The method include trade shows,
cooperative advertising, point of purchasing(pop) displays, trade allowances,
dealer contests and other programmes. Sales force oriented sales promotion
aims at increasing the sales people. These includes sale-force contests,
bonuses or premiums ,sales meeting and conferences and other programmes.
A large number of companies sales promotional effort is aimed at the
companys own sales force.

IMPORTANCE / PURPOSE OF SALES PROMOTION

A business can promote itself through and effective sales promotion because it
says something about work and helps the business to identify themselves. They
can be an inexpensive way of increasing awareness, of reaching new buyers or
extending the buying choices of existing audiences. As an essential part of any
promotional campaign they should be planned from the beginning.

Sales promotions can be one of the best tools for retaining customers and
increasing your share of their wallet. The promotions can encourage customers to
try your product or company, increase their frequency or quantity of purchases,
they can help you build your database, cross-sell and extend and reinforce your
brand. Loyalty programs can be an effective sales promotion tool and allow you to
track and measure your Results
The issue of sales promotion has been receiving increasing attention from both
advertising and marketing professionals and academicians. This increase of
attention can be explained by two major interrelated factors: first, the nature of
sales promotions it brings certain measurable (as opposed to advertising) impact
on sales, which attracts many marketing managers; it also has been proven by time
to be the effective collection of techniques to increase sales.
However, the phenomenon of sales promotion is not studied vary widely. Sales
promotions expenditures for most of the companies are increasing, however with
the total promotional budgets staying relatively the same it can be assumed that the
increase of expenditures on sales promotion come at the expense of decreasing
advertising budgets.
From the point of view of manufacturers:
Sales promotion is important for manufacturers because:
it helps to increase sales in a competitive market and thus, increases profits;
it helps to introduce new products in the market by drawing the attention of
potential customers;
when a new product is introduced or there is a change of fashion or taste of
consumers, existing stocks can be quickly disposed off;

From the point of view of consumers

Sales promotion is important for consumers because
the consumer gets the product at a cheaper rate;
it gives financial benefit to the customers by way of providing prizes and
sending them to visit different places;

the consumer gets all information about the quality, features and
uses of different products;
certain schemes like money back offer creates confidence in the mind of
customers about the quality of goods; and

it helps to raise the standard of living of people. By exchanging

their old items they can use latest items available in the market.
Use of such goods improves their image in society.

INTRODUCTION
Sales promotion aims directly at including purchasers to buy a product. It
involves demonstrations, contests; price-off, coupons, free samples, special
packaging, and money refund offers .sales promotion activities are designed to
encourage resellers and sales people to sell the product. It is different from
personal selling and advertising in the sense sales promotion is non recurrent in
nature and is for a short period. This type of promotion mix is complimentary to
the other kinds of promotion mix.

Sales promotion is one level or type of marketing aimed either at the consumer or
at the distribution channel (in the form of sales-incentives). It is used to introduce
new product, clear out inventories, attract traffic, and to lift sales temporarily. It is
more closely associated with the marketing of products than of services. The
American Marketing Association (AMA), in its Web-based "Dictionary of
Marketing Terms," defines sales promotion as "media and non media marketing
pressure applied for a predetermined, limited period of time in order to stimulate
trial, increase consumer demand, or improve product availability." Business
pundits and academic students of business have developed almost fancifully
sophisticated views of sales promotion. In down-to-earth terms it is a way of
lifting sales temporarily by appealing to economic motives and impulse-buying
behavior. The chief tools of sales promotion are discounts ("sales"), distribution of
samples and coupons, the holding of sweepstakes and contests, special store
displays, and offering premiums and rebates. All of these techniques require some
kind of communication. Thus sales promotion and advertising are difficult to
distinguish