Sales Promotion Prepared By: - Vivek Sharma Roll No. 06 ISMC, Noida
Sales Promotion Sales promotion includes several communications activities that attempt to provide added value or incentives to consumers, wholesalers, retailers or sales-force to stimulate the immediate sales.
Sales promotion describes promotional methods using special short term techniques.
Types of sales promotion
Objective of Sales Promotion Building product awareness To increase the sales volume in short term
Encourage the customer for buying
Objective of Consumer Promotion
Objective of Trade Promotion
Display of new product launch
Objective of Sales Force Promotion Increase the level of Motivation Getting market information
Encourage selling a new product
Major Consumer-Promotion Tools Free Samples: - Company provide samples of the product by mail, by retail store, attached in magazines. For Example - Clinic Plus Provide samples of its shampoos in Big Bajar and attached with Times of India. Coupons: - Company provide coupons to their customers inside the pack of product or inserted in magazines and newspaper ads.
For Example - Mr. White provide coupons inside the pack. Returned empty pack and get Rs 5 off in next purchase.
Major Consumer-Promotion Tools Discounts: - Company provide discount offers to their customers when they buy the product. For Example - Globus provide 50% discount on its product. Buy 1 Get 1 Free: - Company provide offers to their consumers to buy 1 product and get another 1 free. For example - Lux offers to their customer buy 3 get 1 free offer. Combo Offer: - A Combo pack is two related products banded together.
For Example - Colgate offers a combo pack of toothbrush free with toothpaste.
Major Trade-Promotion Tools Price-Off : - A straight discount off the list price on each case purchased during a stated time period. For Example - Nokia offers to their retailers price off facility. Allowance: - An amount offered in return for the retailer’s agreeing to feature the manufacturer’s products. An advertising allowance and display allowance compensates retailers for advertising the manufacturer’s product.
For example - Samsung and LG provide allowances to their retailers in the season of Diwali.
Major Trade-Promotion Tools Free Goods: - Offers of extra cases of merchandise to intermediaries who buy a certain quantity or who feature a certain flavor or size. For example - Nestle Eclairs provides free goods offers to their retailers. POP Displays: - This is extra tool of sales promotion given by a company to retailers to boost the sales. For example - Outside signs, window displays, counter pieces, product display. Push money: - An extra commission paid to retailers to push the products.
For example – Nokia provide their retailers sale 5 pack of mobiles and get extra 2% margin.
Advantage of Sales Promotion Increased Buying Confidence Customer Increased Repeat purchase Increased short term sales Increased Brand switching
Good short term promotional tool
Disadvantage of Sales Promotion Dangerous in long term basis Damage the image of product in customers mind
Reduced the effect over the customer
Example Nike provide its customers flat 40% reduction on the product MRP. The objective of using this techniques is to attract more new customers and increase the footfall of the store.
The other objective of Nike is to clearance the stock and bring the new trend.