3. DEFINITIONS:-
“Sales promotion consists of a diverse collection of
incentive tools, mostly short-term, designed to
stimulate quicker and/or greater purchase of particular
products /services by consumers or the trade”.
• “ Philip Kotler”
“Sales promotion is an organized effort applied to the
selling job to secure the greatest effectiveness for
advertising and for dealers”.
• “ G.W. Hopkins”
4. CHARACTERISTICS
• Salespromotion isuseful for newaswell asexisting
products.
• They are marketingevents.
• They are designed to have a direct impact on consumer’s
behavior.
• They are designed to influence consumers or marketing
intermediaries.
• Sales promotion has become the fastest-growing method of
promotion.
5.
6. LO1
OBJECTIVES OF SALES PROMOTION
Type of Buyer
Loyal
Customers
Competitor’s
Customers
Brand
Switchers
Price Sensitive
Buyers
Desired Results
•Reinforce behavior
•Increase consumption
•Change purchase timing
•Break loyalty
•Persuade to switch
•Persuade to buy your
brand more often
•Appeal with low
prices
•Supply added value
Sales Promotion
Examples
•Loyalty marketing
•Bonus packs
•Sampling
•Sweepstakes,
contests, premiums
•Price-lowering
promotion
•Trade deals
•Coupons, price-off
packages, refunds
•Trade deals
8. TOOLS FOR CONSUMER SALES
PROMOTION
Coupons and Rebates
Premiums
Exchange Scheme
Contests & Sweepstakes
Free Samples
Installment Sales
9. Samples are a trial of a product. This is generally the most powerful form
of promotion for “new products”. It simply means offer of a free
product or service.
1. SAMPLES
10. Coupons are a certificate which offer price reduction to consumers for
specified items. Coupons bear a date of expiry and can't be redeemed
after the cut off date.
2.COUPONS
18. 1.DISCOUNT
It is also known asprice-off. Thediscount isprovided
on the basesof amount of purchase by the whole
seller or retailer.
19. 2.Allowance
In this method allowances are offered towholesalers
and retailers for purchasing or promotion specific
products.
20. 3.TRADESHOWS
In this scheme vendors display their products.
These trade shows are organized by industry trade
associations.
21. 4. FREEGOODS
It is in the form of extra quantity of purchased
product, "free”. Freegoods encourage sellersto
stock more during promotionperiod.
22. 5. CashRebate
It is an incentive that gives retail salespeople cash
rewards for every unit of aproduct they sell. It is a
monetary reward given to the salesforce of the
dealers.
23. 6. DEALERSCONTEST
• Theseare run by the manufacturers to induce
retailers and their salespeople to increasesales and
to promoteproduct.
26. DISADVANTAGES OF SALES
PROMOTIONS
◦ 1. Increased price sensitivity- Consumers wait for the promotion deals to be announced
and then purchase the product. This is true even for brands where brand loyalty exists.
Customers wait and time their purchases to coincide with promotional offers on their
preferred brands. Thus, the routine sales at the market price are lost and the profit margin
is reduced because of the discounts to be offered during sale-season.
‘The Diwali Bonanza Offers’ on electronic goods.
◦ 2. Quality image may become tarnished- If the promotions in a product category have
been frequent, the promotions could have a negative effect about its quality image.
Consumers may start suspecting that perhaps the product has not been selling well, the
quality of the product is true compared to the price or the product is likely to be
discontinued because it has become outdated.
The Smyle Powder offer of “Buy 1 and get 2 free” went on and on. Ultimately people
stopped asking for the product as the on-going sales promotion strategy made the customers
perceive it to be a cheap and an inferior product.
27. ◦ 3. Merchandising support from dealers is doubtful- In many cases, the dealers do not
cooperate in providing the merchandising support nor do they pass on any benefit to
consumers. The retailer might not be willing to give support because he does not have the
place, or the product does not sell much in his shop, or may be he thinks the effort
required is more than the commission/benefit derived.
◦ 4. Short-term orientation- Sales promotions are generally for a short duration. This
gives a boost to sales for a short period. This short-term orientation may sometimes have
negative effects on long-term future of the organization. Promotions mostly build short-
term sales volume, which is difficult to maintain. Heavy use of sales promotion, in certain
product categories, may be responsible for causing brand quality image dilution.
