Promos should be targeted properly to be effective. It is chosen as it is ubiquitous and will not cost much when contestants buy it for their video submissions. Binaca used to give those animal replicas. He has to attract prospective buyers, urge them and persuade them with the above factors to buy his product. The contest is called ‘the world’s greatest salesperson’. Planning 6. The company’s marketing objectives and strategies influence the development of sales promotion objectives and strategies. How does a company choose their sales and marketing philosophy? Sales promotion tries to complement the other means of promotion given above. Samples. What constitutes a new order? Customer Sales Force Structure: The sales force is organized along customer or industry lines. Evaluating the Sales-Promotion Results, Sales Promotion – Managing Trade Promotions, Just as there is advertising clutter because of a large number of a. dvertising messages, we also have a promotion clutter on account of a large number of promotional tools used. 5. There was a joint concert of Nescafe and Samsung. Retailers have to exert more to handle promos. In this article we will discuss Sales Promotion:-. A sweepstakes calls for consumers to submit their names for a draw. Indeed the contest is brickmanship! Sales promotions are a marketing communication tool for stimulating revenue or providing incentives or extra value to distributers, sales staff, or customers over a short time period. Mostly, either it is a price related scheme or bundling of a package. Tropicana’s brand aware­ness was increased by a phone-in contest by Pepsi. Promos have limited reach and cannot change brand perceptions across the entire spectrum of customer uni­verse, even if supported by the company. The trade promotions help build customer traffic at the retail outlet. These samples may be distributed door-to-door (through personal selling) or retail stores. The following are some of the most commonly used sales promotional techniques: Coupons are issued by producers of packaged goods or by retailers that could be used in retail shops that can be redeemed at discounted prices when purchasing products/services. Promos magnify brand value continuously. It can arouse enthusiasm, create a buying mood or spark an immediate reaction from consumers, dealers and the firm’s sales­person. However, hasty decisions regarding sales promotion objectives may sometimes produce adverse effects for the firm in the long run. Not only does it give profit but it also serves other purposes such as provision of information, creation of demand, repeat buyers, sales stabilisation and quick inventory turnover. ABCL and Plus events also operate in this field. Definition of Sales Promotion 3. The present contest will earn the winner a fellowship during which the winner will help Ogilvy write a guide to selling in the 21st century. Contest is not an intelligence test, and so should be absolutely clear. Free in mail premium means a premium item will be sent by mail to consumers who present proof of purchase to the manufacturer. One maxim is, do promote, but not at the cost of brand equity. Promotion is not only addressed to consumers but also to dealers. The themes could be creatively chosen. In case of low-involvement products, we can in-pack premiums. Contents: Concept and Nature of Sales Promotion Objectives of […] 3. A panel of judges selects the best and buyers are given prizes. (d) Regular supplies of products / gifts during the pendency of the scheme. The sales force provides a flow of information to the company which needs to know what is happening ‘in the field’ to keep up with changes in demand or fashion. When promos are on par amongst the brands, they tend to pick the brand on the basis of offer. There is no consumer empathy with the brand. 6. Here are many tools that are used in order to facilitate sales force promotion effectively. Sales promotion and publicity, when combined with advertising and personal selling programmes, really add up to more than the sum of the parts. The whole purpose of such promotion is lost. The time also determines the success. 2. These are cost-effective motivators and improve representative’s productivity. Sales promotion is defined by the Institute of Sales Promotion (ISP) as “comprising a range of tactical marketing techniques within a strategic marketing framework to add value to a product or service in order to achieve specific sales and marketing objectives”. Securing additional shelf-space and added display. Sales promotion and publicity, when combined with advertising and personal selling programmes, really add up to more than the sum of the parts. Some basic reasons for their extensive use are: 2. A rebate of Rs. Therefore, companies have to be careful in designing and structuring sales force. It is also known as a push strategy, which is directed at the dealer network so that they push the brand to the consumers by giving priority over other competitor brands. Results expected must be clearly stated. Such co-promotions create tremendous awareness for the new en­trant. Those who look at SP tools in a store setting are very good prospects, or else they would not have been in-store in the first place. It involves making use of marketing communication and initiatives like seasonal discounts, financial schemes, etc. They are to be used at the right time in the right measure. What succeeds for one product may not succeed for other products. (ii) At the level of dealers and distribution, it is called trade promotion, e.g., free goods, display contests, dealer sales contests, push money, etc. It is, therefore, crucial that these contests are handled properly. (iii) The trade is motivated to use POP tools, and price reductions. They have seldom reuse values. 9 Types of Consumer Sales Promotion Tools, Aggressive Selling | Meaning | Aggressive vs Defensive | Circumstance | Methods, Different Approaches to study of Marketing, Terms of Sale | Different types of Quotations in International Trade, Factors to be considered in export packaging design, Top 10 Differences between Wholesalers and Retailers, Chain Stores | Meaning | Advantages | Disadvantages, Weaknesses of Trade Union Movement in India and Suggestion to Strengthen, Audit Planning & Developing an Active Audit Plan – Considerations, Advantages, Good and evil effects of Inflation on Economy, Vouching of Cash Receipts | General Guidelines to Auditors, Audit of Clubs, Hotels & Cinemas in India | Guidelines to Auditors, Depreciation – Meaning, Characteristics, Causes, Objectives, Factors Affecting Depreciation Calculation, Inequality of Income – Causes, Evils or Consequences, Accountlearning | Contents for Management Studies |, a product that is not superior in some way to competing products, a product with a narrow margin of profit, or. It induces trials and generates loyalty. “Marketing Management” Sales Force and Promotion Prepared by: Jonah C. Pardillo 2. Cash refunded offer is stated on the package. To make salesman’s efforts effective, some of the tools of the salesmen-oriented sales promotion are as follows: – Bonus to Sales Force: A quota of sale is fixed. 1. Sales volume should not be the only goal of each contest. 4. Marketers must be on the lookout for ways to rise above the clutter. 1. What constitutes a sale – whether an order, or a delivery or payment received? Reduction in prices stimulates sale of goods. The brand which is constantly on sales promotion is vulnerable to a better offer. It should also take into confidence the trade channels. (b) When we have to communicate a major improvement in our product. But it has now come to be used strategically also. Some pitfalls which management must guard against: 2. Consumer promotions are directed towards the consumer and are strongly prevalent in the FMCG category. In this age of intense competition, where the bottom line is quick sales, marketers are beginning to rely more and more on short term tactics to win the battle for consumer’s minds and wallets. Pre-testing is done by panel method, or by mail survey or by a field-study. Sales promotions are a marketing communication tool for stimulating revenue or providing incentives or extra value to distributers, sales staff, or customers over a short time period. Consumer promotion can be offered either by a manufacturer or a retailer. 5. There are motivational tools linked to sales that achieve a certain level or cross that level. Such activities are displays, shows, exhibitions, demonstrations, and many other non-routine selling efforts at the point of purchase. The product should be available without the promo during the progress of promo. Samples are one of the most important tools of sales promotion. On the contrary, such promotion delays further repurchases. Every achievement must be rated in terms of points. To build goodwill by sharing the gay spirit. Used positively, they are a great device. Sales promotion is often thought as special aggressive selling efforts to accelerate sales. For example, it is easy to measure the impact of discount offer on sales, but it is very difficult to measure the impact of premium on the perceived value of the promoted brand. Content Guidelines 2. (j) MRTP provisions must be respected. (i) The trade is motivated to carry the brand. To reduce post-purchase dissonance, promos can be used. An ongoing promotion, e.g., low prices everyday becomes a part of the brand property or normal trade practice. So, generally promos are not offered on premium products. (c) Scheme should be properly communicated. 4. Additional value covers – money, e.g., reduced prices, free sample, extra value. They are non-recurring in their use. One has to communicate with the consumer through advertisements and POPs at the retail level. Coupons are generally issued along with the product. In particular, it enables the marketer to add time urgency and other behavioral influences to the promotion campaign. A freebie is allowed only when the company bears its cost. Advertising agencies accord low status to sales promotions and usually employ junior staff for sales promotion so that they may be trained for more creative jobs. For example, imagine a situation where the retailer has insufficient number of gifts. Companies adopt one of four philosophies when deciding on how to create an organizational marketing process. 7. In the mid-90s, promos were just some trivial giveaways. Lakme uses couponing for its premium Orchid range. Representative level promotion must have an element of excitement and also should be capable of entertaining the participants. 4. Benefits 10. 1. Pre-testing ascertains cost-effectiveness of various alternatives. There were magazine samples, internet promos, contests and coupons in consumer durables. Consumer promotion takes care of the strong competitive brand. to promote the sale of an established product, to stimulate customers to switch brands; and. Companies usually, therefore, pay additional handling charges to the retailers per coupon handled. Samples should be correctly targeted, or else they go waste. Channel pilferage is very common here. Perhaps, there is no effect of advertising now. 3. 6. (a) When established brands have a declining market. Promos no longer generate excitement. Push, Pull or a combination of the two. Both products reap the benefits of the promo. The contest will be held on a branded channel on Youtube and will use other social media like Facebook and Twitter. Many sales promotion campaigns involve the use of incentives. Such a shift has several reasons. Later, the announcement of a few more prizes, writing of reminders, etc., generate an air of expectancy. The No. Besides, promos occupy shelf-space. It is an attempt to squeeze maximum out of promos. In case, they are not linked to purchase, the construct becomes complex. The common problems are non-availability of premium/differing quality of premium item. (f) The gifts should be of good quality and useful. Opel users are invited to an evening of entertainment, extending interaction beyond purchase. Promotion is tactical and short-term. 5. SP got a little share. It is not the BTL that weakens the brand, but below-the-belt does, e.g., price promotion where two pieces are offered for the price of one. Meaning 4. It is an offer to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer. Even mass media coupons can help advertisers to know the effect by considering the redemption rate. It consists of mostly collection of those short-term incentive tools, which are designed to stimulate purchase of a particular product or service. However, sales force is expensive and companies are looking forward to managing them in an efficient and effective manner. But food products do show category growth by such promotion, e.g., biscuits. Free samples are small and packaged portion of the (main) merchandise distributed for free. At the level of sales representatives, SP tools are incentive programmes and sales contests of representatives. Designing of the Sales Force. Meaning and Definitions of Sales Promotion: Sales promotion is said to be a key ingredient in the international marketing campaign. 8. Secondly, the premiums advertised must be readily available at retail points during the entire period of scheme. To gain additional market share or additional revenue. There can be a number of sales promotion objectives, depending upon the firm’s policies, marketing objectives, nature of the product and its stage in product life-cycle, level of existing and anticipated competitive activity, consumer response pattern, economic conditions, and the target group (consumers, traders, or sales force), etc. The parties should be clear about goals and role of one another. To develop favourable consumer experience with the product. A trade promotion can be easily managed through a company scheme mailer / circular and a one-to-one presentation by the sales force to the distributor and dealers. Themes must be measurable objectively and be relevant to the company’s sales curve. The accountability of redemption of coupons or refunds and rebates should be properly fixed. Samples are defined as offers to consumers of a small amount of a product for trial. The same holds true for markets. Sales promotion, in other words, is a marketing activity that adds to the basic value of the product or services for a limited period of time and directly stimulates purchasing by the target audience. The manufacturer must appreciate the trader’s interest. Sales Promotion in International Marketing! Prohibited Content 3. Competitive pressure also calls for the use of SP. It is also used to keep customers away from the competitive products. Maintaining customer patronage and brand loyalty. Premium refers to goods offered either free or at low cost as an incentive to buy a product. Advertising has reached the target audience when they were away from the store. It also affects the brand equity. In a dynamic and rapidly changing marketing environment, unfavourable conditions may appear with little or no warning. Marketing managers use sales promotions to stimulate buying and increase consumer interest in a product. (2) Dealer Promotion- Activities to increase the interest and enthusiasm of dealers and distributors. Promos can be used anytime anywhere. Samples are defined as offers to consumers of a small amount of a product for trial. It is just proving the maxim ‘there is no brand loyalty which two cents off can’t overtake’. Cash refund offers are rebates allowed from the price of the product. Clients also expect the agencies to offer them BTL without paying for these services, but just as value-add-ons. Producers / retailers may promise free service to consumers for a specified period of time after sales. Objectives of Sales Promotion 3. Another reason for the rise in BTL is the lead given by the market leader such as HUL who would like to battle the slowdown of their top-line. Advertising has four characteristics: it is persuasive in nature; it is non-personal; it is paid for by an identified sponsor; and it is disseminated through mass channels of communication. But BTL generates sales at high costs and is not sustainable. Demonstration is required when products are complex and of a technical nature. These are redeemable at the stamp redemption centres. The consumers might get alienated from the superior benefit it actually offers. Sales promotion is the process of persuading a potential customer to buy the product. Promos should be integrated to products and advertising. With more and more brands flooding the market, the pressure to occupy display space at retail outlets is more. This involves planning, designing and modifying programme, etc. Sometimes, samples are attached to another product. 7. If the cost of freebies is covered partly or fully in the transaction, under the MRTP Act, it becomes an unfair trade practice. Content Filtration 6. 2 brand uses couponing to challenge the market leader. The most common objectives under pro-active category are: 1. (c) When we want to amplify the results of the advertising, (d) When we want to increase the number of retail stores to sell our products, and. Sales Promotion – Why Use Sales Promotion? Advertising expenses so far accounted for more than 60 p.c. Couponing is useful to promote a new concept. Direct marketing is used to send coupons to a selected list of users. Similarly, Videocon offered Rs.7,000 off on its No-frost model of refrigerator against an old fridge. Above are all the different types of sales promotions. Free samples are given to consumers to generate their interest in the product. Instead of giving instant gratification, the consumers are made to wait to see whether they have won some coveted prize. In business, there is a growing realization that promos have been stretched too much. Sales Promotion Tools and Techniques – 12 Commonly Used Tools: Coupons, Free Samples, Price-Off Offer, Fairs, Exhibition, Free Gifts, Competitions and a Few Others. It also has difficulties. To help launch a new product (say Cello instead of Hello on telephone and get the gift, identify independent personality and get the Alphonso mangoes). Many of these schemes are dealer loaders, e.g., merchandise deals, discounts, buying and selling allowance, premium or push money and POP materials. Types of Programs 7. What part of their arsenal will they use? Essays, Research Papers and Articles on Business Management, Sales Promotion: Objectives, Importance, Techniques, Examples, Methods, Types and Tools, Top 8 Tools of Sales Promotion (With Advantages and Disadvantages), Sales Promotion: Meaning, Merits, Limitations and Methods, Advantages and Disadvantages of Franchising. 3. Entry forms are duly filled by the buyers. A marketing man today wants a short-term increase in sales of the current year, rather than waiting to build the brand over a period of five years, by which time he may or may not be in the organisation. Here, proper forecasting and sourcing are important. For the sales force, objectives include encouraging support of a new product or model, encouraging more prospecting, and stimulating off-season sales. Developing the Sales-Promotion Programme, 4. Producers of new brands or innovative products are introduced by holding fairs and exhibitions. 500. The buyer purchases the product and submits the evidence of purchase with entry form for contest. Specific marketing objectives – If these objectives are spelled out clearly, an effective solution can be conceived. Consumer-oriented Promotion Tools B. Trade-oriented Sales Promotion. The nature of promotional offers has changed. IFB is offering a gas stove and a gas lighter on two of its washing machine models. If you can sell it, probably you can sell anything. Premium may be of several kinds — direct premium, reusable container free in mail premium, a self liquidating premium, trading stamps, etc. 4. Before uploading and sharing your knowledge on this site, please read the following pages: 1. Promotion can be launched directed at consumer or trade. Promos can be evaluated by comparing sale volume across 3 time periods – pre-promo, during the promo, post-promo. Sales Promotion Strategies. It requires a substantial media budget over and above the freebies. Sales promotion is thus a part of promotion, and is restricted to direct inducements on a short-term basis given to consumers or trade so as to stimulate purchases of products and services. Privacy Policy 9. Sales Representative Level Promotion 13. There is an effort to integrate promotion with the core brand values. The final step is to evaluate the results of the programme in order to determine the effectiveness of the programme. SP tools at the point-of- purchase remind the buyer of the ad or otherwise provoke him to purchase. This holds true even for the Indian market. Sales promotion activities include special offers, displays, demonstrations, and other nonrecurring selling efforts that aren’t part of the ordinary routine. (i) Retailers who launch their own scheme can be persuaded to provide a special support to the company’s products. Sales pro­motion is generally broken into two major … Yearend contests are seen as poor planning to make-up deficiencies and hence, are better avoided. They may be distributed door to door, by mail or they may be inserted in packages. Only consumers postpone their purchases till an off-season price-off is announced. They should be small enough to fit in the package. Trade incentive could be price off, free goods and allowances. Agencies of late have set up BTL divisions, but these lack depth. To add extra value to the product and develop brand franchise. Salesforce promotion techniques are used to motivate salespeople to put in more efforts to increase sales, increase distribution, promote new or seasonal products and build up morale and enthusiasm of Salesforce. Consumer promotions are directed towards the consumer and are strongly prevalent in the FMCG category. (h) POP material and its display need supervision. Calling attention to new products and product improvements. Each programme should have its individual implementation and control. The market is to be assessed soon after the scheme begins. The rest forms another category, e.g., price-off packs, trade allowances, etc., gifts not related to product. Increasing, usage rate by present customers. Too many sales promotions may affect adversely the brand image, suggesting its lack of popularity or overstocking by a company. (b) Competitors arise up their sales promotion. The target market area is to be carefully selected and should include the neighbourhood satellite markets to avoid leakage, given the fact that the tax structure is not uniform over the states. Thus, sales-promotion is used at the time of introducing a new consumer product, to secure maximum dealer stocking, display space and attention of consumers. Promotional support is a must for any SP scheme. Incentives are something of financial value added to an offer to encourage some obvious behavioural response. Why Use Sales Promotion? It gives extra incentive to the customer to make a purchase. Thus, they will get the benefit of additional business. We can get access to a new segment in which customers buy our product, in combination with the product they normally use. Event management covers product launches, theme parties, promo for liquor and cigarette brands, music driven events, beauty pageants, etc. The question that needs consideration is whether exchange offers ensure loyalty. Sales is a very fulfilling profession, when you choose the right type of position. Contests and freebies are resented because these distort the competition, and divert the attention of the consumer from the core product. Sales promotion operates at three levels: (i) At the level of consumer, it is called consumer promotion, e.g., free gifts, samples, price-offs. Some goals are easier for accomplish­ment than others (e.g., territory potential may be different and hence, high potential leads to easy accomplishment of goals.). Sales promotions are only supplementary devices to supplement selling efforts of other promotion tools. It is better to offer a discount of 30% rather than pay an interest of 3% per month which works out to 18% for a six months season. Techniques 12. Tools 11. The manufacturers can use three methods to measure the effectiveness of sales-promotion-. Sales promotions are short-term incentives to buy products. Advertising is salesmanship in print, but has moved too far from it. Revenues from activities like direct marketing promotions, PR and research are on the rise. Some activities like event associations do enhance the brands. Goods are sold at reduced prices during slump season. The type of objectives will vary with the target market. 2. Promos can become strategic if they are supported by other elements of the marketing mix. He may have a good sales force. Direct premium can be inside the pack or outside it. The total sales promotional budget earmarked for this contest was Rs.1.5 crore. (3) Business Promotion- Through exhibitions, trade fairs and conventions. Coupons have four advantages- (1) Regular buyers are limited to one reduced price pack, so that the subsidy to existing buyers is reduced, (2) Coupons do not dilute the brand value, (3) The customer tends to resist paying the normal price again with normal rebates. Concept of Sales Promotion 2. Names of consumers are included in a list of prize winning contest. 2. 1. The four philosophies are production, sales, marketing and societal marketing orientations. Moreover, if the purchaser is not satisfied with the product, the whole price or part of it will be refunded. The American Marketing Association defines sales promotion as “In a specific sense, sales promotion includes those sales activities that supplement both personal selling and advertising and co-ordinate 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.”. (1) Consumer Promotion- Activities intended to educate or inform the consumers and those intended to stimulate the consumers. It also builds a top-of-the-mind awareness. There are instances where coupons of free products are inserted in for new products. All these will help avoid hard and bitter feelings later. Sales promotion activities include special offers, displays, demonstrations, and other nonrecurring selling efforts that aren’t part of the ordinary routine. (ii) The trade is motivated to carry a larger inventory. Limitations. 4. Instant gratification is what the users of FMCG brands seek from promo. The Basis of Consideration in Trade Promotion are: (a) The capabilities of the parties. Point-of-purchase displays give a real payoff, sales rising by 25 to 50 % or even more. These schemes are intended to motivate sales people to put in more efforts to increase sales, increase distribution, promote new or seasonal products, sell more deals to resellers, book more orders, develop prospects lists and build up morale and enthusiasm. In other words, buy back allowances are given for new purchases, based on the quantity of goods bought previously. The real thrust came in 1999. The bonus is paid on achieving this sales quota. The distribution channel is offered sales inducements to motivate them to support a brand by providing it a more than their usual push. Zip Sip brand of flavoured milk? It is like turning a brand into a commodity, and sells it on price sensitivity. Report a Violation 11. Promo should not be on wrong side of law. Uploader Agreement. A visit to your nearby supermarket will reveal numerous sales promotion schemes of various products, simultaneously vying for our attention. They are also sent by mail or given to customers in the retail store itself. Couponing is used to build a relationship with the customers. We'll cover promotions to increase sales, to encourage repeat business, and to boost brand awareness. A variety of contests / a variety of prizes do help in this direction. 8. Since late 2000, there has been a conscious attempt to curtail the promo expenditure and use the funds to build the brands. 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