SALES PROMOTIONAL TOOLS

Nacchhater Singh (18) Neha Gaur (19)

What is Sales Promotion?

Sales promotion describes promotional methods using special short-term techniques to persuade members of a target market to respond or undertake certain activity. As a reward, marketers offer something of value to those responding generally in the form of lower cost of ownership for a purchased product.

Objective of Sales Promotion

Increasing sales in the immediate time frame

Encouraging trial purchases

Creating Interest Stimulating Demand Overcoming seasonal slumps Reinforcing the Brand Retaining existing customers Making consumers switch brands in favor of the

firm

Difference Between Sales Promotion and Advertisement

Advertisement gives Reason to buy whereas

promotion gives Incentives to buy.

Whether the promotion involves a short-term value

proposition
(e.g., the contest is only offered for a limited period of time).
The customer must perform some activity in order to

be eligible to receive the value proposition

(e.g., customer must enter contest).

Disadvantages
Decreasing Brand loyalty.
Increasing consumer price sensitivity. Brand-Quality Image dilution. Focus on short-term marketing.

Two components of sales promotion

Trade promotion
Pushing products through intermediaries
Enthusing them to participate in company

sponsored promotion activities

Consumer promotion
Encourage and induce trial purchase of a product Generate consumer interest Build traffic for a brand at the retail point

Types of Sales Promotions

Free Samples Coupons Contests and Sweepstakes Frequent User Incentive Demonstrations Promotional Pricing Point of Purchase Display Premium Products Rebates Limited price offers Exchange schemes Trade Shows

Promotional activities in India

In India, there were 2050 promotional schemes were available in 2001.

Survey conducted on 855 promotional scheme during 1996-2003, revealed following analysis:

Type of promotion Free Gift Lucky draw or scratch card Price-off or extra-product offer

Percentage of total promotional offers 56 10 8

Buy more and save

Exchange offer Contests Others like zero-percent financing, reward points etc.

4
4 3 Rest of the proportion

Free Samples
Enticing members of a target market to try a product

is often easy when the trial comes at little or no cost to the customer.
Free

trials give customers the opportunity to experience products, often in small quantities or for a short duration, without purchasing the product.

It is the most expensive promotional technique and is

generally used during product introduction.

Coupons
Coupons offer 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. Coupons require consumer involvement in order for value to be realized. On-pack coupons encourage immediate repurchase of same product by using coupons

Contests and Sweepstakes

Contests are special promotions awarding value to

winners based on skills they demonstrate compared to others. Contest award winners are often determined by a panel of judges. Sweepstakes or drawings are not skill based but rather based on luck. Winners are determined by random selection.

Frequent User Incentives

Promotions that offer customers a reward, such as price

discounts and free products, for frequent purchasing or other activity are called loyalty programs.
Many loyalty programs have become ingrained as part of

the value offered by a marketer.

Rebates
Rebates, like coupons, offer value to purchasers typically

by lowering the customers final cost for acquiring the product.

Rebates are generally handed or offered

to customers after a purchase is made and cannot be used to obtain immediate savings in the way coupons are used.

Promotional Pricing
It is the most powerful sales promotion techniques, 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.

Demonstrations
Many products benefit from customers being shown how

products are used through a demonstration.

Whether the demonstration is experienced in-person or via

video form, such as over the Internet, this promotional technique can produce highly effective results.

Point of Purchase Displays

Point of purchase (POP) displays are specially designed

materials intended for placement in retail stores. These displays allow products to be prominently presented, often in high traffic areas, and thereby increase the probability the product will standout. POP displays can result in significant sales increases compared to sales levels in a normal shelf position. Many marketers will lower the per-unit cost of products in the POP display as an incentive for retailers to agree to include the display in their stores.

Premium Products
Premium or give-away items are another form of sales

promotion involving free merchandise.

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.

Limited period price offer

Firms offer special(reduced) prices for products

over a limited period

Exchange schemes
Common in consumer durables market

Help in promoting sales during sluggish period,

liquidating high inventories for a particular model, maximising sales during festivals

Trade fairs and exhibitions

Oldest practices in sales promotion

Provide companies with opportunity of introducing

and displaying their products to large number of people Bring company and consumer in direct contact with each other

References
Marketing Management by P Kotler, KL Keller, A

Koshy, M Jha, 13th Edition. Marketing Management by VS Ramaswamy, S Namakumari, 4th Edition. www.wikipedia.org

Thank You