The theories of Sales Promotion Introduction “Sales promotion comprises a range of tactical marketing techniques designed within a strategic

marketing framework to add value to a product or service in order to achieve specific sales and marketing objective.” Sales promotion is a technique which has significant potential to improve short term sales and like direct response work; its effectiveness can be tightly measured. Although its strategic value is the subject of considerable debate, nevertheless, it is an important tool of marketing. There are few markets or products where it cannot be used and few brands to which it cannot be applied. Types of sales promotion: (i)Consumer oriented sales promotions: Targeted to the ultimate users of a product or service. Coupons, sampling, premiums, rebates, contests, sweepstakes, and POP materials are induced the sales (ii)Trade oriented sales promotions: Targeted toward marketing intermediaries such as retailers, wholesalers, or distributors. Promotion allowances, merchandise allowances, price deals, sales contest and trade shows. Sales promotion methodology The traditional business world suggests that there are three different types of sales promotion techniques: the push, the pull, and the combination. (i) The push theory of sales promotion techniques supports that you promote your goods to a retailer, who will then pass the wares along to their consumers. A “push” promotional strategy makes use of a company's sales force and trade promotion activities to create consumer demand for a product. The producer promotes the product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it to consumers. A good example of "push" selling is mobile phones, where the major handset manufacturers such as Nokia promote their products via retailers such as Carphone Warehouse. Personal selling and

trade promotions are often the most effective promotional tools for companies such as Nokia for example offering subsidies on the handsets to encourage retailers to sell higher volumes. A "push" strategy tries to sell directly to the consumer, bypassing other distribution channels (e.g. selling insurance or holidays directly). With this type of strategy, consumer promotions and advertising are the most likely promotional tools. (ii) The pull theory varies by focusing on the consumer himself. Go directly to the source to introduce your goods, and encourage a direct purchase. A “pull” selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product. If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers. A good example of a pull is the heavy advertising and promotion of children's’ toys – mainly on television. Consider the recent BBC promotional campaign for its new pre-school programme – the Fimbles. Aimed at two to four-year-olds, 130 episodes of Fimbles have been made and are featured everyday on digital children's channel CBeebies and BBC2.As part of the promotional campaign, the BBC has agreed a deal with toy maker FisherPrice to market products based on the show, which it hopes will emulate the popularity of the Tweenies. Under the terms of the deal, Fisher-Price will develop, manufacture and distribute a range of Fimbles products including soft, plastic and electronic learning toys for the UK and Ireland. (iii) The combination theory is a slight part of both. You may supply a retailer with your consumable. He or she will then offer this to a customer with incentives for shopping with them. This strategy is usually used if the distributor is hesitant to carry a product, since it gets its required consumers without having to go to retail outlets. “Car dealers often provide a good example of a combination strategy. If you pay attention to car dealers’ advertising, you will often hear them speak of cash-back offers and dealer incentives.” Because sales promotion is an initiative carried out by an organization to promote a product to ensure increase in sales so it has varied methods of promotion. Most of the time, sales promotions are creative and original therefore providing a comprehensive list of all methods is

not possible, however some examples of the regularly used sales promotions activities are as follows: • • • • • • • • • • • Buy-One-Get-One-Free New Media Merchandising CRM (customer relationship management) Free gifts Discounted prices Free samples Vouchers & coupons Joint promotions Competitions and prize draws/Cause-related or fair Finance deals

Sales promotion is directed at sales staff, customers and distribution channel members which may include wholesalers, retailers etc. When targeted at consumers it is called consumer sales promotion, when it is targeted at wholesalers and retailers it is called trade sales promotions. However by many it is considered as ‘gimmick’ because of the unusual methods some marketers use for sales promotion. All of these sales promotion strategies can be victorious. Your business may choose to use one or all of them when trading your products. When working to implement your technique, you may also want to utilize some other methods. Allow people to try samples of your goods. Engage the free advertising of in-store demonstrations and exhibitions. All of these can be wonderful sales advancement strategies for your business. Sales Promotion Theory Sales promotion is giving the customer something extra, rewarding them for their behavior on this particular purchasing occasion. There are several theories which support the concept of reward as a motivator. The conditions of sales promotion are classical and operant conditioning. Whereas classical conditioning is largely associated with advertising operant conditioning is seen as an explanation for consumer behaviour in relation to sales promotion. Operant conditioning suggests the response of the individual is likely to be affected by positive reinforcement (reward)

or negative reinforcement (punishment), although the affect is likely to cease when these reinforcements are taken away. Edward Thorndike suggested that the ‘law of effect’, which had to do with positive and negative consequences of actions, is also relevant to sales promotion. The law states that the consequences of behavior now will govern the consequences of that behavior in the future. In other words once a buying pattern is achieved it will continue into the future. John Watson, US psychologist and founding father of American behaviouralism, introduced the concept of shaping, chaining, and priming. Shaping: John Watson states shaping suggests that a final response can be explained as ‘appearing after preceding acts which; taken together, constitute a chain of successive approximations’. Shaping breaks the desired behaviours in a series of stages and the parts are learnt in sequence. Chaining: Chaining suggests behavior emerges from sequences of actions in which the preceding action becomes the discriminative stimulus for the final response (inducement > purchase). Priming: De Pelsmacker (2001) states, priming suggests that a short exposure to a particular stimulus can evoke an increased drive to consume more of a product. So this all theories offer reasons why we can motivate people to buy more by offering incentives although the continuation of these behaviuor is open to doubt. Uses of sales promotion: a) Introduce new products b) Get existing customers to buy more c) Attract new customers d) Combat competition e) Maintain sales in off season f) Increase retail inventories g) Tie in advertising & personal selling

Sign up to vote on this title
UsefulNot useful