Sales Promotion

Meaning and Definition:

Sales promotion refers to those marketing activities that stimulate consumer shows and
expositions.
Purchasing and dealer effectiveness such as displays, demonstration and various non- recurrent
selling efforts not in the ordinary routine. According to A.H.R. Delens: Sales promotion means
any steps that are taken for the purpose of obtaining an increasing sale. Often this term refers
specially to selling efforts that are designed to supplement personal selling and advertising and
by co-ordination helps them to become more effective.
Meaning and Definition:

Sales promotion refers to those marketing activities that stimulate consumer shows and
expositions.
Purchasing and dealer effectiveness such as displays, demonstration and various non- recurrent
selling efforts not in the ordinary routine. According to A.H.R. Delens: Sales promotion means
any steps that are taken for the purpose of obtaining an increasing sale. Often this term refers
specially to selling efforts that are designed to supplement personal selling and advertising and
by co-ordination helps them to become more effective.
In the words of Roger A. Strong, Sales promotion includes all forms of sponsored
communication apart from activities associated with personal selling. It, thus includes trade
shows and exhibits, combining, sampling, premiums, trade, allowances, sales and dealer
incentives, set of packs, consumer education and demonstration activities, rebates, bonus, packs,
point of purchase material and direct mail.
Objectives of Sales Promotion:

Sales promotion is a vital bridge or a connecting link between personal selling and advertising.

Sales promotion activities are undertaken to achieve the following objectives:

1. To increase sales by publicity through the media which are complementary to press and poster
advertising.
2. To disseminate information through salesmen, dealers etc., so as to ensure the product getting
into satisfactory use by the ultimate consumers.
3. To stimulate customers to make purchases at the point of purchase.
4. To prompt existing customers to buy more.
5. To introduce new products.
6. To attract new customers.
7. To meet competition from others effectively.
8. To check seasonal decline in the volume of sales.
Importance of Sales Promotion:

The importance of sales promotion has increased tremendously in the modern times. Lakhs of
rupees are being spent on sales promotional activities to attract the consumers in our country and
also in other countries of the world.
Some large companies have also begun to appoint sales promotion managers to handle
miscellaneous promotional tools. All these facts show that the importance of sales promotion
activities is increasing at a faster rate.
Techniques
Sales promotion is one of the five aspects of the promotional mix. (The other 4 parts of the
promotional mix are advertising, personal selling,direct marketing and publicity/public
relations.) Media and non-media marketing communication are employed for a pre-determined,
limited time to increase consumer demand, stimulate market demand or improve product
availability.
Examples
include contests, coupons, freebies, loss
leaders, point
of
purchase displays, premiums, prizes, product samples, and rebates.

Sales promotions can be directed at either the customer, sales staff, or distribution channel
members (such as retailers). Sales promotions targeted at the consumer are called consumer
sales promotions. Sales promotions targeted at retailers and wholesale are called trade sales
promotions.
Consumer sales promotion types

Price deal: A temporary reduction in the price, such as 50% off.

Loyal Reward Program: Consumers collect points, miles, or credits for purchases and
redeem them for rewards.

Cents-off deal: Offers a brand at a lower price. Price reduction may be a percentage
marked on the package.

Price-pack/Bonus packs deal: The packaging offers a consumer a certain percentage more
of the product for the same price (for example, 25 percent extra). This is another type of deal
in which customers are offered more of the product for the same price.[2] For example, a
sales company may offer their consumers a bonus pack in which they can receive two
products for the price of one. In these scenarios, this bonus pack is framed as a gain because
buyers believe that they are obtaining a free product. [2] The purchase of a bonus pack,
however, is not always beneficial for the consumer. Sometimes consumers will end up
spending money on an item they would not normally buy had it not been in a bonus pack. As
a result, items bought in a bonus pack are often wasted and is viewed as a loss for the
consumer.

Coupons: coupons have become a standard mechanism for sales promotions.

Loss leader: the price of a popular product is temporarily reduced below cost in order to
stimulate other profitable sales

Free-standing insert (FSI): A coupon booklet is inserted into the local newspaper for
delivery.

Checkout dispensers: On checkout the customer is given a coupon based on products

purchased.

Mobile couponing: Coupons are available on a mobile phone. Consumers show the offer
on a mobile phone to a salesperson for redemption.

Online interactive promotion game: Consumers play an interactive game associated with
the promoted product.

Rebates: Consumers are offered money back if the receipt and barcode are mailed to the
producer.

Contests/sweepstakes/games: The consumer is automatically entered into the event by

purchasing the product.

Point-of-sale displays:

Aisle interrupter: A sign that juts into the aisle from the shelf.

Dangler: A sign that sways when a consumer walks by it.

Dump bin: A bin full of products dumped inside.

Bidding portals: Getting prospects

Glorifier: A small stage that elevates a product above other products.

Wobbler: A sign that jiggles.

Lipstick Board: A board on which messages are written in crayon.

Necker: A coupon placed on the 'neck' of a bottle.

YES unit: "your extra salesperson" is a pull-out fact sheet.

Electroluminescent: Solar-powered, animated light in motion.

Kids eat free specials: Offers a discount on the total dining bill by offering 1 free kids
meal with each regular meal purchased.

Sampling: Consumers get one sample for free, after their trial and then could decide
whether to buy or not.

Trade sales promotion techniques

Trade allowances: short term incentive offered to induce a retailer to stock up on a

product.

Dealer loader: An incentive given to induce a retailer to purchase and display a product.

Trade contest: A contest to reward retailers that sell the most product.

Point-of-purchase displays: Used to create the urge of "impulse" buying and selling your
product on the spot.
Training programs: dealer employees are trained in selling the product.
Push money: also known as "spiffs". An extra commission paid to retail employees to
push products.

Trade discounts (also called functional discounts): These are payments to distribution channel
members for performing some function.

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What is 'Brand Equity'

Brand equity refers to a value premium that a company generates from a product with a
recognizable name, when compared to a generic equivalent. Companies can create
brand equity for their products by making them memorable, easily recognizable, and superior in
quality and reliability. Mass marketing campaigns also help to create brand equity.

Product mix As explained, product mix is a combination of total product lines within a
company. A company like HUL has numerous product lines like Shampoos, detergents, Soaps
etc. The combination of all these product lines is the product mix.
The complete range of products present within a company is known as the product mix. In any

multi brand organizations, there are numerous products present. None of the organizations wants
to take the risk of being present in the market with a single product. If the company has only a
single product, than the demand of the product will be too great or the company does not have
the resources to expand the number of products it has.
Product line The product line is a subset of the product mix. The product line generally refers
to a type of product within an organization. As the organization can have a number of different
types of products, it will have similar number of product lines. Thus, in Nestle, there are milk
based products like milkmaid, Food products like Maggi, chocolate products like Kitkat and
other such product lines. Thus, Nestles product mix will be a combination of the all the product
lines within the company.
Length of the product mix If a company has 4 product lines, and 10 products within the
product line, than the length of the product mix is 40. Thus, the total number of products against
the total number of product lines forms the length of the product mix. This equation is also
known as product line length.
product

width

The products a business produces separated into different categories; a large conglomerate
business may have products in a variety of categories. For example, a large soft drink
manufacturer's product width would consist of its soft drink brands in one category and its snack
food
brands
in
another
category.