(Given by American Marketing Association)
“Sales promotion, in a specific sense, “includes those sales activities that supplement both personal selling and advertising, coordinate them, and help to make them effective, such as displays, shows and expositions, demonstrations, and other non-recurrent selling efforts not in the ordinary routine.”
Comprehensively Sales Promotion is defined as
“In addition to advertising, personal selling, publicity, and direct marketing, sales promotions often involve incentive-providing and interest-generating activities. The purpose of sales promotion is to stimulate, motivate and influence the purchase and other desired behavioral responses for the form’s customers.”
The growing significance of sales promotion can be attributed to the following:
- A rising Indian market and expanding consumer culture.
- Heightened inter-firm rivalry within the industry and, in fact, in all sectors of the economy.
- Trade’s reluctance to allocate more funds to the assortment of products offered by various businesses. This resistance is mainly because most consumer companies enlarge their product mix to pre-empt competition and satisfy different consumer needs. The trade’s limited resources make it challenging for them to invest in the goods of every company. As a result, the market also calls for more incentives for any further investment.
- Fragmentation of viewers and readers arising out of multiple television channels, newspapers, and magazines.
- The mass media cost has been on the rise and most companies find sales promotion more cost-effective.
- Standardization of technologies and products has weakened business differentiation, and price wars are now a common occurrence in the majority of consumer goods.
Sales Promotion Tools
Description – Price offers refer to products that are only offered at a discount from the regular list price for the duration of the deal.
Definition – More of the same product is provided at no additional cost or with only a slight price rise for larger packs of the same product.
Special discounts (as opposed to regular monetary discounts to trade)
Description – A coupon is a certificate that entitles the customer to stated savings or claims some specified thing free or on part payment. Manufacturers and merchants both employ coupons, which are dispersed via mail, door-to-door salespeople, inside product packaging, by dealers, or in print advertisements.
Refund or Rebate:
Description – It is an offer of money, which is a part of the price paid by the customer, for sending” proof of purchase” of the stated product.
Description – Sampling is probably the most successful approach to putting the product in the customer’s hand. The majority of the time, samples are provided without charge to prospects; however, in rare circumstances, a small fee may be assessed. Products that cannot be thoroughly explained through advertising and the benefits and advantages of the product can be experienced by the client may profit from using sampling. Sampling can be distributed through sales force, direct mail, media, retailers, shopping centers, in-pack, or on-pack.
Description – A premium (gift) is a reward given to the customer for performing a particular act, generally purchasing a product. Premiums are offered at a low cost or for free. Premium and promoted products may or may not be interrelated in use. There are different types of premiums. 1) packaged premium, 2) banded premium, 3) container premium, 4) free-in-mail premium, and 5) self-liquidating premium.
Description – These are temporary price reductions or reimbursement of expenses incurred by dealers, in full or part. Following are some of the allowances:
1) Allowance for buying or trading 2) Buy-back stipend 3) count and recount (4) allowance for goods or displays 5) Assistance with cooperative advertising and promotion.
Trade Fairs and Exhibitions:
Description – Consumers are invited to compete based on their general; knowledge, skills, or creativity. Sweepstakes are based on chance or luck factor.
Description –useful articles and attractive gifts are offered to dealers for personal or family use.