Sales Promotion

Done by Kannan Chithan

Shone Pramodh
Sahin Shajahan
Gautham Pratheep
Navnit Nair
Aramol Vinod

Sales Promotion Definition

Short-term incentives to encourage the purchase or sale

of a product or a service. Sales promotion includes a wide
variety of promotion tools designed to stimulate earlier or
stronger market response.
Commonly used Sales Promotion Activities include
Rebate, Discount, Refunds, Product Combinations,
Quantity Gift, Instant Draws and Assigned Gift, Lucky
draw, Usable Benefit, Full Finance @ O%, sampling and
contests.

Rapid growth of Sales

Promotion
Sales promotion tools are used by most organizations,
including manufacturers, distributors, retailers, and notfor-profit institutions. They are targeted toward final
buyers, retailers and wholesalers, business customers
and member of the sales force.
Today, in the average consumer packaged-good
company, sale promotion accounts for 77% of all
marketing expenditures.
Consumers have become more deal oriented. In the
current economy, consumers are demanding lower prices
and better deals.
Sales promotion can help attract todays more economyoriented consumers.

Some examples of popular sales

promotion activities:
1. Buy-One-Get-One-Free (BOGOF) which is an example of
a self liquidating promotion. For example if a loaf of bread
is priced at Rs. 10, and cost Rs.3 to manufacture, if you
sell two for Rs. 15, you are still in profit especially if
there is a corresponding increase in sales. This is known
as a PREMIUM sales promotion tactic.
2. Customer Relationship Management (CRM) incentives
such as bonus points or money off coupons. There are
many examples of CRM, from petroleum Companies to
banks to supermarkets.
3. Rebate: Offering products at different prices, to clear off
excess inventory.
4. Usable Benefit: Purchase goods worth Rs 3000 and get a
holiday package worth Rs 3000 free or Get a Discount
Voucher for Accessories on Apparel Purchases of Rs 1000
and above.

Some examples of popular sales

promotion activities:

1. Buy-One-Get-One-Free (BOGOF) which is an example of a self

liquidating promotion. For example if a loaf of bread is priced at
Rs. 10, and cost Rs.3 to manufacture, if you sell two for Rs. 15,
you are still in profit especially if there is a corresponding
increase in sales. This is known as a PREMIUM sales promotion
tactic.
2. Customer Relationship Management (CRM) incentives such as
bonus points or money off coupons. There are many examples
of CRM, from petroleum Companies to banks to supermarkets.

Some examples of popular sales

promotion activities:

1. Buy-One-Get-One-Free (BOGOF) which is an example of a self

liquidating promotion. For example if a loaf of bread is priced at
Rs. 10, and cost Rs.3 to manufacture, if you sell two for Rs. 15,
you are still in profit especially if there is a corresponding
increase in sales. This is known as a PREMIUM sales promotion
tactic.
2. Customer Relationship Management (CRM) incentives such as
bonus points or money off coupons. There are many examples
of CRM, from petroleum Companies to banks to supermarkets.

5. New Media Websites and mobile phones that support

a sales promotion.
6. Merchandising additions such as dump bins, point-ofsale materials and product demonstrations.
7. Free gifts e.g. Subway gave away a card with six
spaces for stickers with each sandwich purchase. Once
the card was full the consumer was given a free
sandwich.
8. Discounted prices e.g. Budget airline such as Spicejet
e-mail their customers with the latest low-price deals
once new flights are released, or additional destinations
are announced.
9. Free samples: tasting of food and drink at sampling
points in supermarkets. For e.g. Red Bull was given away
to potential customers at supermarkets and at petrol
stations by a promotion team.
10. Competitions and prize draws: in newspapers,
magazines, on the TV and radio, on the Internet and on

3. New Media Websites and mobile phones that support

a sales promotion.
For example, in the United Kingdom, Nestle printed
individual codes on KIT-KAT packaging, whereby a
consumer would enter the code into a dynamic website to
see if they had won a prize. Consumers could also text
codes via their mobile phones to the same effect.
4. Merchandising additions such as dump bins, point-ofsale materials and product demonstrations.

3. New Media Websites and mobile phones that support

a sales promotion.
For example, in the United Kingdom, Nestle printed
individual codes on KIT-KAT packaging, whereby a
consumer would enter the code into a dynamic website to
see if they had won a prize. Consumers could also text
codes via their mobile phones to the same effect.
4. Merchandising additions such as dump bins, point-ofsale materials and product demonstrations.

3. New Media Websites and mobile phones that support

a sales promotion.
For example, in the United Kingdom, Nestle printed
individual codes on KIT-KAT packaging, whereby a
consumer would enter the code into a dynamic website to
see if they had won a prize. Consumers could also text
codes via their mobile phones to the same effect.
4. Merchandising additions such as dump bins, point-ofsale materials and product demonstrations.

11. Finance deals: e.g., O% finance over 3 years on

selected vehicles.

Many of the examples above are focused upon

consumers. Dont forget that promotions can be aimed at
wholesalers and distributors as well. These are known as
Trade Sales Promotions.

Merits of Sales Promotion

Attention Value:
Sales promotion activities attract
attention of the people because
of the use of incentives.

Useful in New Product Launch:

Sales Promotion tools can be very
effective at the time of introduction
of a new
product in the market.
It induces people to break away
from their regular buying
behavior
and try the new product.

 Synergy in Total Promotional Efforts:

Sales promotion activities are designed to supplement
the personal selling and advertising efforts used by a firm
and add to the over all effectiveness of the promotional
efforts of a firm.

Limitations of Sales Promotion

Reflects Crisis: If a firm frequently rely on sales

promotion, it may give the impression that it is unable
to manage its sales or that there are no takers of its
products.
Spoils Product Image: Use of sales promotion tools may
affect the image of the product. The buyers may start
feeling that the product is not of good quality or is not
appropriately priced.

Thank
You