Sales Promotion Introduction

1. UNIT II
2.4 Sales Promotion
Advocate Suman Dhungana, Southwestern Business College

2. • Materials that act as a direct inducement , offering added value or incentive for the
product , to resellers or consumers.
• Collection of incentive tools mostly of short period that are designed to simulate
quicker or greater purchase of particular goods/services by consumers or trader
• Set of Marketing activities undertaken to boost sales of products or services.
• Process of persuading a potential customer to buy the product .
• Activities other than personal selling , advertising
and publicity that stimulate consumer purchasing.
• Promotional method using short term techniques.

3. Sales Promotion tools are mainly used by organizations including ;
a) Manufacturers
b) Distributors
c) Retailers
d) Not for profit institutions
• Sales promotion is targeted towards final buyers.
• Immediate effect on consumer’s.
2 Types
i) Consumer Sales Promotion (towards Consumers)
ii) Trade Sales Promotion (towards reseller)

4. Reason of Growth/ Development of Sales Promotion
After the evolution of this concept , Sales promotion has grown substantially in last
decade. There are several reasons for this dramatic growth in sales promotion.
• First, consumers have accepted sales promotion as part of their buying decision
criteria.
• Second, the increasing tendency of businesses to focus on short-term results has
helped super growth in sales promotion, which can provide an immediate boost in
sales.
• Third, the emergence of computer technology has enabled manufacturers to get
rapid feedback on the results of promotions.
• Finally, an increase in the size and power of retailers has also boosted the use of
sales promotion.

5. Why Sales Promotion ?
• To create long term relationship with the retailer.
• To attract new customers
• To reward Loyal customers .
• To increase the repurchase use of goods and service ( repetition rate ) of occasional
users.
• To immediately support fundamentals of the business .
When Sales Promotion is to be done ?.
• When there is a tough competition in the market.
• When new product is introduced .
• When the image of the company has to be enhanced.
• When the business has intension of rapid increment of sales

6. ADVANTAGES OF SALES PROMOTION
• Easily measured response
• Flexible
• Quick objective achievement
• Can be cheap at times
DIS-ADVANTAGES OF SALES PROMOTION
• Brand image problem
• Short term advantage
• Stressfull for retailers
• Brand message not Clear

7. How Sales Promotion differs from advertising?

8. Consumer Sales Promotion
• directed towards customer
• Marketing technique that is used to entice (lure) customers to purchase a product.
• Stimulates consumer demand, market demand and improve product availability . For eg ;
Coupons , contest, product samples etc.
• It lasts for a set period of time and used to achieve a specific purpose such as increasing
share value / unveiling new product ……..
• Its objectives are ;
a) Stimulate Trail
b) Neutralize Competitors
c) Encourage Repurchase
d) Stimulate impulse purchasing
e) Increase Customer inventory & consumption.

9. Tools in Consumer Sales Promotion
Samples Offer of a free amount of a product or service delivered
door to door , sent in mail, picked up in a store , attached to
another product or featured in an advertising offer .
Coupons Given with the product . E.g.. Scratch and with the price of
the good
Premiums(gifts) Merchandise offers at a relatively low cost/ free as an
incentive to purchase another product.
Frequency programs Programs providing rewards related to the
consumer’s frequency and intensity in
purchasing the company’s product/ services.

10. Free Trails Inviting prospective buyers to try the product without cost in
the hope that they will buy .
Discounts Offer in a package , a certain deduction in offer price.
Demonstrations Demonstrate product working , displays , attention
catchers.
Contests Held for consumers , salesman and dealers .prized according to
their attractive slogan about the utility of the product.
Cross Promotions Using one brand to advertise another Non competing
brand.
Combo Offer A product is combined with another product of same or
different category and are sold .

11. Trade Sales Promotion
• Directed to retailers/ wholesalers/ intermediaries.
• a type of promotion activity whereby a product is pushed through a marketing channel via the
encouragement of those channel members to buy as well as to promote the product / service
to their own group of customers.
• Offering incentives to encourage them to purchase and sell more of the product .
• Pushing a particular product through existing channels to increase demands and stimulate
more sales.
Objectives
a) Gain / maintain Distribution
b) Influence resellers to promote product
c) Influence resellers to offer price discount
d) Increase reseller inventory
e) Defend against competitors
f) Avoid reduction of normal prices.

12. Trade Promotion Tools
a) Trade Allowances –
Trade allowances are short-term special allowances, discounts, or deals granted to
resellers as an incentive to stock, feature, or in some way participate in the cooperative
promotion of a product.
b) Dealer Loaders -
A dealer loader is a premium given to a reseller to encourage development of a special
display or product offering.
c) Trade Contests-
A trade contest typically associates prizes with sales of the sponsor's product. Trade
contests generate interest, which makes them useful for motivating resellers.
d) Point-of-Purchase Display –
Point-of-purchase displays are generally used at the retail level to call customer attention to
a featured product.

13. e) Trade Shows -
A trade show is a periodic, semi-public event at which suppliers rent booths to display
products and provide information to potential buyers.
f) Training Programs –
Some manufacturers sponsor or pay for training programs for customer employees.
g) Push Money –
Push money, also called spiffs (for special promotional products incentive funds), is
what a manufacturer pays retail sales- people to encourage them to promote its
products over.

15. QUEIRIES ???