On the other hand, trade-oriented promotions inspire the middlemen like dealers, distributors, wholesalers, retailers to work hard to gear up their business in order to reap more profit. iii. OBJECTIVES OF CONSUMER ORIENTED SALES PROMOTION: INCREASE CONSUMPTION OF AN ESTABLISHED BRAND >>established brands competing in mature markets, against established competitors >> sales promotion can generate new interest in an established brand to help increase sales or defend market share against competitors. Product’s design, colour, packaging and price, all communicate something. The firm may also announce some attractive trade-deals so that shelf space in retail shops in blocked. Hasbro, a toy company, teamed with the retailer Toys R Us to create direct mail booklets offering discounts on Hasbro toys only at Toys R Us stores. For example, one Maggi noodles packet free with the purchase of four, or one gets three soaps at the price of two. When consumers see in bold print “FREE”, their attention is focused on the advertisement. Contestants were required to suggest one word as a prefix or suffix to describe ‘Nescafe’. x. Sales promotional devices help introduce new products in the market. A certain sales quota is fixed for dealers, and those who exceed the quota by a specified margin or by the largest margin are awarded cash or merchandise, and often a certificate too. For the constant sales-increase, it is better to determine the sales promotion programmes on the basis of changing policies and to implement them with new strategies. viii. Any doubts and questions that arise in the minds of the customers can be cleared then and there, thus overcoming the resistance. To combat the situation, it is becoming a form of compulsion on the part of the marketer to develop different promotional tools and devices. For example, people who buy spices rarely, or in small quantities, decide to buy more often or in larger volume if they received free recipes in return. 7. The reasons for the growth of sales promotion is mainly due to: 2. Display is a powerful tool to enhance sales. These products are such that customers, if left on their own, would be reluctant to spend money and give them a try. To Counter a Competitor’s Sales Promotion Device. Sales promotion includes providing information about the attribution of the products and communicating messages aimed at satisfying its shareholders, government dealers and the like. They induce buyers to purchase a new product. The following are the objectives of the sales promotion: To announce new products; Encourage customers to buy a new product, complimentary samples may be dispersed, or money and stock allowance can be awarded to business reserve and sell the product. Price-off reductions are typically offered right on the package through specially marked price packs For example, on Palmolive shaving brush Rs. However, there are also some other objectives of sales promotion. 5 is provided that places the product’s price between Rs. Aggressive advertising and sales promotion campaigns back up new product launches by competing companies. The various objectives of sales promotion can be summed up as follows:-, 1. The purpose of sales promotion is to increase sales. Maintaining customer patronage and brand loyalty. It is the focus of market-driven companies to develop and sustain relationships with the consumers. Sales promotion is used to retain customer’s interest in the product during off-season. Short term incentives offered to the buyers stimulate sales. If the price of the product was Rs.50 before the price rise, and the new price is Rs.60, then a coupon with a face value of Rs.5 is provided that places the product’s price between Rs.50and Rs.60, making the effective price only Rs.55. The following are the main in-store promotional activities: The product is sold at a reduced price from its normal selling price. Trade-oriented sales promotion programs are designed to get the trade support. This work is done mainly by advertisement but other promotional activities help achieve this objective. Having persuaded customers to enter the shop, they could now be encouraged to buy by presenting the merchandise in such a manner as to create the purchase instinct in the customer’s mind; e.g. In its absence, the old customers are not attracted towards the latest goods of the seller. 5. It motivates sales force to give desire emphasis on new accounts, latent accounts, new products and new territories. Objectives – Increase Sales Volume, Launch New Product, Increase Trial, Encourage Repeat Purchase and Deflect Customers Attention from Price. These provide details of the product the advantages of a particular retailer’s products over the competitor, unique features and benefits, price, etc. To overcome the seasonal fluctuation of products. The main objective of a commercial concern is to increase its sale. Development of the effective distribution systems. Large scale production can be achieved only with the methods of large scale selling which is possible only through the promotional activities. Frequently, a ‘stretched’ version of the pack obviates the extra shelf space required. It improves the performance of middlemen and acts as a supplement to advertising and personal selling. These new customers raise the collective sales volume. Sales promotional devices at customers level include samples, coupons, demons­tration, contacts, money refund offers, premium offer, free trials etc. Everything about contest, whether display or sales, should convey the idea that it is something special. to the customers while introducing the product. Sales promotions are marketing events or sales efforts—not including traditional advertising, personal selling, and public relations—that stimulate buying. Sales promotion can be developed as part of the social media or e-commerce effort just as advertising can, but the methods and tactics are much different. Encouraging retailers to display established brands, and. To introduce new products or services: Sales promotion is often used to motivate prospective … This means higher margins to the retailer. The advantage to the supplier is that the budget is known well in advance, the requisite number of prizes being prearranged. ii. Accessibility and availability of the products. The stages of the product, in the life cycle should be taken into account while introducing any particular sales promotional method. Event Marketing – Event marketing is a type of promotion where a company or brand is linked to an event or where a themed activity is developed for the purpose of creating experiences for consumers and promoting a product or service. Repeat Purchase 12. Small budget firms have to exercise extreme caution and use such promotion judiciously because this may prove to be quite an expensive propositioned. ix. Discounts in cash or goods may also be offered to dealers to stock a new product. You might set a sales objective to improve your percentages of upsells. It would be more appropriate to choose selected markets with high potential. 4. The objective of sales promotion is to induce the consumer to purchase more and more products and thus demand for the product is created. The sales volume of any product depends on many basic factors of marketing such as product quality, its price, distribution, effectiveness of marketing communications and macro-environmental factors (demographic, economic, technological, political/legal, and competitive, etc.). 2. Encourage Dealers to Participate in Display and Sales Contest  6. For example, shaving foam and after shave lotion. Sales promotion is the avenue to reach the product or the brand in the mind of the prospective consumers and to develop a brand image with favourable attitude towards the product. Offer Details: The basic purpose of sales promotion is to increase the sales of a product by creating demand. ADVERTISEMENTS: Following are the objectives of sales promotion: i. Generally sales promotion techniques are designed to create interest in the mind of customer and customer is interested to take action for purchasing the product or service. Introducing new arrivals and creating platform/awareness for newly launched products. vii. The objective of marketing is to increase awareness and sales for your product. 8. Sales promotion induces present customers to buy more of the product. Thirdly, sales promotion is meant to act as a powerful tool of competition. Marketers have to consider the impact of sales promotion on brand’s image in the long term while designing sales promotion programs. In some conditions, customers leave their old products and adopt goods with new packaging and the latest improvement. Some products have a good market. The promotional activity aims to persuade the customers to buy in a greater quantity or buy other products in addition. Sales promotions are used to stimulate purchasing and sales by way of giving incentives or offers, and the objectives are to increase sales by informing […] The inter-purchase interval, that is, the interval between two successive purchases should be long for the consumers. store ‘club’ cards, or continuity programmes such as collecting a dinner service. The firm may also announce some attractive trade-deals so that the shell space in retail shops is blocked. They may read not only the headline but also the copy, and may get exposed to the advantages and benefits associated the brand. Promotional activities such as advertising giving information regarding price and quality of the product as compared to other similar products existing in the market or offering various facilities to middlemen with a view to sell company’s goods in preference to other goods or offering gifts and discounts to customers, help arrest competition. The product may be entirely new and customers may have little knowledge about them. They should, therefore, be informed of the new product and told that the new product works better than all similar existing products. 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. To provide Information regarding the quality, uses, different uses of the products, 5. There were 1565 prizes to be won. The most important objective of sales promotion is to build demand by convincing customers to make a purchase. Increasing the inventories of business buyers – Retailers may be induced to keep in stock more units of a product so that more sales can be affected. Then the customers come across the variety and novelty offered by the retailer, which they might not know before. To influence consumers behavioural patterns. The products are categorised and standardised to suit the specific consumer demand. Increasing consumption of an established brand, iv. Trade promotion: All sales promotion efforts are targeted towards the middlemen to push the product towards the end consumer. Or, you could inspect your sales playbooks and follow-up guidelines to see how you could introduce more upsells into a rep’s pitching script. A firm that feels threatened would like to protect its loyal customers from switching to the new competing brand. The consumer-oriented programmes stimulate the consumers, and evoke the desire to take purchase decision. 5. BIG discounts. Key Points. Sales promotion keeps and memory of the product alive in the minds of the customers. v. Enhancing advertising and marketing efforts. Once the customer has made a purchase, sales promotion can be used to both encourage additional purchasing and as a reward for purchase loyalty. The objectives for the sales force may be to encourage a new product or model, stimulate off-season sales, and persuade more prospective buyers, and so on. Free samples may be distributed to leading consumers who may be a source of advertisement for other prospective consumers. In the total marketing process, the marketing goal of the organisation and the marketing strategy should be formulated at the time of programming the promotional activities. Welcome to EconomicsDiscussion.net! A number of personal care products, such as shampoos, cosmetics, toilets soaps, or laundry products, such as detergent powders and cakes etc., have been introduced successfully in the last few years. Bonus packs provide more value for consumers as they get extra product for the money they spend. Sales promotion is a $300 billion—and growing— industry. Sales promotion objectives could be either proactive or reactive. Privacy Policy3. Effective promotion is generally used to create long-term branding or short-term sales promotion inducements to attract customers. 11. The objectives of sales promotion are described below in detail: 1. They should, therefore, be informed of the new product and told that the new product works better than all similar existing products. Sales promotion objectives are consistent with marketing objectives. The focus was on an incentive, which would ensure trial of even one cake. Display is a powerful tool to enhance sales as it attracts the attention of consumers who are passes-by or window-shoppers. To attract new customers by means of attractive gifts etc. To rate good public image of the product and the organisation, 7. While brand awareness is a key promotional objective, a number of other important business objectives are served by promotional activities. It is a direct inducement that offers an extra value of incentive for the product sales force, distributors, or the ultimate consumers with the primary objective of creating an immediate sale. ii. In Order to Generate Immediate Liquid Funds: In order to meet certain commitments or funding some other immediate projects, it may be necessary to generate some liquid funds in quick fashion, by an organisation. Display and advertising allowance are granted to dealers to compensate them for the space given for the display of manufactured products. In this stage target market has general product awareness and some knowledge about the product how the product fulfil their wants. The purpose of sales promotion is to reduce the seasonal decline. 60, making the effective price only Rs. ii. Such activities make the product popular and are complementary to press and other media of advertising and personal selling. vii. Or another variant could be that he buys three packets and gets the fourth one free. After the sessions over, they are not demanded any more. Sales Promotion Techniques. Some companies offer a free pack with purchase of a product like free soap with purchase of detergent. Understanding them will help you create an effective promotion strategy. Marketers can develop appropriate sales promotion to accomplish the objective of reducing the negative impact on sales. An Overreliance on Promotions. The promotional objectives are to be considered and framed by the organisations on the basis of an in-depth study of the economic environment, nature of competitive situations, the attributes of the product, the stage of the product in the product life cycle, consumer’s perception about the product and the image of the organisation. These new tie-ups mean more branding and sales opportunity for the company as well. Sales promotional activities serve the following purposes: 1. The competition may be from manufacturers or sellers of similar products or of substitutes. There could be specific incentives, such as ‘get one free on purchase of four.’ Some promotions offer free merchandise or cash refund offer by collecting tokens on purchases of a specified value. In particular conditions an institution follows sales promotion policies so that the popularity of the institution may increase. TOS4. The main purpose of sales promotion is to introduce a new product among customers. Gifting. These fittings make the product prominent compared to other .products, kept in normal racks. The final aim is to persuade customers to return again and again to the store trading on the goodwill and loyalty that previous purchases have, hopefully, instilled, e.g. The product should be such that it can be stocked without occupying much space. Basically, the customer provides some proof of purchase along with some money. In-Store Activities 15. Sales Promotion Objectives. The promotional strategy shall encourage the effective distribution system to enable the middleman and the sales people to equip themselves with ready stock, to meet the demand of the consumers. In the present market condition to face the challenges of increasing competition, the marketers develop different promotional schemes to augment sales to satisfy the need of the prospective consumers. In order to provide better facilities the organisations should concentrate on effective distribution system and should establish scientific logistic framework to satisfy the demand of the consumers. The retailer plays no part in such promotional activities; he sells the merchandise as usual, with no significant effort and expenses from his end. Sales promotions ideas & examples 1. In the broad sense of the term marketing communication mix includes all the four marketing P’s – Product, Promotion, Packaging and Price. Detergent powders and cakes toilet-soaps, shampoos, oral hygiene products, and many other non-durable products, which are consumed every day, may respond well to such promotions. A sweepstake is a promotion where winners are determined purely by chance; it cannot require a proof of purchase as a condition for entry. viii. Even though the retailer is not actively involved, he has to be well informed for achieving the planned objectives of promotional schemes. 4. Bonus packs – A Bonus pack offers the consumer an extra amount of a product at the regular price by providing larger containers or extra units. The trial retention ratio suggested that once consumers tried ‘Palmolive’ soap, they liked the quality and stayed with the brand. In the marketing mix marketing communication is as important as other elements. Reminding leads the firms to reinforce the previously satisfactory behaviour of the customer. They should build confidence in the mind of customer about the product through promotion and personal selling. Sales promotion can be developed as part of the social media or e-commerce effort just as advertising can, but the methods and tactics are much different. The information about these competitions is usually printed on the packs. That is why we find discounts, off-season price reduction of such items in the market. In general, long-term goals are considered communication objectives, while short-term goals are considered sales growth objectives. Sales promotions are a great way for your organization to encourage potential customers to buy your product or sign up for your service. Manufacturers of packaged goods products such as – food, health care items, cosmetics, and toiletries are using this method. (vi) To Induce Present Customers to Buy More: Sales promotion devices are also used to induce present customers to buy more. 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