Chapter II

LITERATURE REVIEW AND CONCEPTUAL

FRAMEWORK

LITERATURE REVIEW
CONCLUSION
INTRODUCTION TO SALES PROMOTION STRATEGIES
ELEMENTS OF MARKETING MIX
PROMOTION
SALES PROMOTION
SALES PROMOTION STRATEGIES
TYPES OF SALES PROMOTION STRATEGIES
CUSTOMERS ORIENTED SALES PROMOTION
TRADE ORIENTED SALES PROMOTION
CONCLUSION
 CHAPTER – II

LITERATURE REVIEW AND CONCEPTUAL FRAMEWORK OF

SALES PROMOTIONAL STRATEGIES

Introduction:

A literature review discusses published information in a particular subject

area. The reason for an review is to analyze critically a segment of a published body
of information through summary, classification and comparison of earlier research
studies, reviews of literature and theoretical articles. A few studies have been
conducted on different aspects of Fast Moving Consumer Goods marketing. These
studies are briefly reviewed in order to present a broad framework for this research.
The studies dealt with brand awareness of Fast Moving Consumer Goods, self-image
and attitude of Fast Moving Consumer Goods, consumer behavior of Fast Moving
Consumer Goods, preferences of Fast Moving Consumer Goods, purchase behavior of
Fast Moving Consumer Goods and customer satisfaction of Fast Moving Consumer
Goods.

The review of these studies is made under the following heads:

1. Evaluation of Sales Promotional Strategies.

2. Impact on Sales Promotional Strategies.
3. Effectiveness on Sales Promotional Strategies.
4. Consumer Behaviour on Sales Promotional Strategies.

There is adequate literature on promotion strategies, price promotion strategies

and sales promotional strategies in the form of journals, books and reports. Most of
literature is related to European and western countries but for Indian literature on
sales promotional strategies is limited.

Evaluation of Sales Promotional Strategies:

Arvinlucy (March-2012) examined the influence of promotional mix

elements on sales. This study finds that, the most of the women groups for the most
part utilize sales promotional schemes, but face the problem of cost because of
finance for carrying out promotion. This study recommended that, in order to improve
sales by the women groups so as to enhance their life standards, there is requirement
for women groups to gatherings to get monetary support.

14
 
 Akbar and Niromand (2012) investigated the effectiveness of promotion
techniques of advertisement, sales promotion, public relations, direct selling and
direct marketing on sales volume of products in Iran Tractor Manufacturing Complex,
Iran. The sample for this study is involved the approved sales representatives and
consumers of Iran Tractor Manufacturing Complex, Iran. This study results shows
that, there is huge relationship between promotion tools and sales volume.

Nagar (December-2009) analyzed the effect of consumer sales promotion on

loyal and non-loyal consumers of FMCG products. This study finds that, the
consumer sales promotions have more impact on the brand switchers when contrasted
with the loyal consumers. Furthermore, among the different types of consumer sales
promotions, free gifts have more impact on the brand switching behaviour of buyers.
This study finds that, the financial status was not a defining factor affecting
consumer’s brand loyalty.

Impact on Sales Promotional Strategies:

Neha and Manoj (July-2013) in their article pointed out the various sales
promotional techniques impact on purchase decision towards refrigerator. This study
information was gathered through convenience sampling of 109 respondents through
descriptive research design. This study result shows that, the different sales promotion
techniques: offer, premium and contest are the most influencing factors for consumer
buying choice. This study concluded that, the sales promotional techniques plays
significant role in consumer purchase decision.

Rashid and Muhammad (2013) evaluate the impact of sales promotion on

the consumer loyalty in the telecommunication industry of Pakistan. Survey technique
was used to gather the information from the cell phone users. A sample of 157 was
studied by applying the descriptive and inferential statistics techniques with the use of
SPSS software. This study results shows that there exist a positive relationship
between the sales promotion and consumer loyalty. This study concluded that, the
non-loyal customers exhibit more switching behavior than loyal customers.

Maruthamuthu and Rajamohan (Nov-2013) assessed the impact of

promotional mix strategies on consumers online purchase behavior. This study
identifies how consumers are impacted by promotional mix strategies. This study
finds that, the promotional mix strategies are significant to consumers purchase online

15
 
products. This study results shows that, the promotional strategies are positive
significant impact on consumers' online purchasing behavior.

Rahmani and Amin (2012) observed the concept of brand equity which is
indicated the significant value of brand for producer, retailer and consumer. This
study presents a functional and clear definition of brand equity and its dimensions.
This study concluded that, the widespread use of advertising and reduction of sale
promotion is suggested for brand equity.

Gilchrist (2012) discussed on impact of different types and levels of discount

on sales of promoted versus non-promoted identical items. This study Findings show
that almost no correlation between regular sales levels and sales of the promoted
product as consumers appear to consider promoted products quite independently of
the regular product.

Kamran and Sultana (2012) mentioned that, the impact of promotion tools
on sales growth in rural areas of Pakistan. This study finds that, the Sales promotion
directly influences the loyalty strength of the customers. This study results shows that,
the TV advertisement and Print media have a positive significant effect on sales
Growth and Billboard and LCD have a negative impact on sales growth.

Esfahani and Maryam (2012) in their study examined the impact of Sales
promotion on psychographic factors deal-proneness buyer. This study results shows
that, the psychological factors including quality and price consciousness,
innovativeness, variety seeker, store loyalty and planning have been affected on sales
promotions and have significant association with these factors and sales promotions.

Williams and Sufian (October-2012) explores the effects of sales promotion

on organizational effectiveness in Nigerian manufacturing industry. This study
concentrated on how sales promotion is utilized to create higher sales, better
profitability and better market share. This study result shows that, the adoption of
sales promotional offers significantly impact the effectiveness of beverage drink
industry. This study concludes that, the management may connect consistently in
more sales promotion strategies and also tend to be imaginative to consumers; this in
turn would upgrade and help their sales revenue.

16
 
 Syeda and Malik (September-2011) in their research have communicated the
impact of Sales Promotion on Organizations’ Profitability and Consumer’s Perception
in Pakistan. This study finds that, the relationship among sales promotional strategies
and profitability of the organizations alongside recognition about sales promotion of
the consumers and its association with the brand loyalty of that specific brand or
company.

Arun (2010) in his study reported the impact of promotional activities for
selling HCL products. This study finds that, the cause of the declining sales rate of
these brands. This study activity was mainly done in the vimannager and
vadgaonsheri. Giving them demo, brushers and handling there queries regarding the
Products.

Marzia (2005) have identified the impact of sales promotions on store

performance in the retailer’s point of view. This study results shows that, the
statistically huge impacts of sales promotions in the heavy family segment on store
sales are found in the short-run; these promotions deliver extra sales and thus act as an
attractive factor. Promotions in textile category, on the contrary, produce an
immediate negative impact on net sales. In the long run, negative measurably huge
impacts on regular sales are detected when promotions are repeatedly implemented
within perishables class.

Sunil and Kamel (1998) viewed that how changes in promotion and
advertising policy influence market structure over the long-term. This study finds that,
the shifts in marketing dollars from advertising to promotions have made national
brands more vulnerable to store brands’ marketing activity. This study suggested that,
the increments in price promotions and reductions in advertising have prompted
decreased separation between brands.

Robert and Srinivasan (1996) investigated the effect of coupon promotions

concentrate on the impact of coupon characteristics on redemption rates, market share
and sales. This study integrative the effect of coupon, file vies on brand profitability
and implements it by using readily scammer data. This study reveals that when N
manufacturer optimizes the market level benefit from you coupon program, income
for individual chains in the market could be suboptimal.

17
 
Consumer Behavior on Sales Promotional Strategies:

Vaishnani and Sanjay (February-2011) the researchers examine the male

and female attitude towards cash discount as one of the sales promotion technique.
This study finds that there is huge difference between buyer preference of cash
discount and free gift as sales promotion technique. This study concludes that there is
no difference between consumer sales promotion and male/female attitude towards
cash discount.

Sharma and Sonia conducted a study to analyze the impact of consumer

response on sales promotion in organized food retailing. This study analysis the
impact of consumer response on sales promotion in organized food retailing studying
of four demographic components sex, age, income and family size has been
considered to affect consumer response towards sales promotion in Food Retail shops
at Jaipur. This study results shows that, the managers to distinguish their target
consumers and in turn to build up appropriate sales promotion programs so as to build
their revenue.

Effectiveness of Sales Promotional Strategies:

Gupta and Singh (May - 2013) have empirically investigated the effective
promotion techniques catering to FMCG Consumer Durables and Business Services
segments. This study found that, the Indian consumers react more to buy one get one
Free than sweepstakes, free trials and samples, price Packs, price discount and
Coupons in Fast Moving Consumer Goods segment. This study identified that, the
successful sales promotional techniques effect on buying behavior towards chose
brands in all three segments.

Manohar (May-2013) analyzed the effectiveness of sales promotion. This

study understands how Star Oil face their challenges and plan their strategies under
this situation. This study results shows that, the consumers of the Star Oil are satisfied
with the quality of price, Packaging, Range of availability & Sales promotion schemes
of the company. This study concludes that, the company has to stick with this strategy
because it is really working for getting consumers for the product.

Faniran (October-1998) evaluate the role of effective sales promotion of

consumer products in a competitive economy in Nigeria. This study finds that, the
effectiveness of sales promotion activities on sales volume and the consumer buying

18
 
behaviour. This study statistical results shows that based on the observed significant
correlation of sales promotional activities with the sales per unit of volume. This
study implies to some extent that the two variables are dependent.

Nelson expresses that, the effectiveness of sales promotion techniques

specifically, price discount, coupon, free sample, bonus pack and in-store display in
the purchase of low involvement products by Malaysian consumers. This study finds
that, the specific demographic components such as education and income of
consumers could potentially confound the observed relationships hence, these
variables were controlled. This study result shows that, the price discounts, bonus
packs, free samples and in-store display are associated with product trial and Coupon
not significant effect on product trial.

General Articles:

Kureshi and Preeta in their article pointed out that, the nature of sales
promotion activities in toilet soap category in India, concentrate on retailer
perceptions with respect to these activities and also get an understanding into
consumer perceptions of these activities. This study finds that with respect to the
nature of the sales promotion schemes, premiums were observed to be the most
frequently used in both premium and popular toilet soap category, followed by price
offs.

Karen and Kusum mentioned the Sales promotions are a marketing

instrument for manufacturers and in addition for retailers. Manufacturers utilize sales
promotions to build sales to retailers and consumers. This study focuses on retailer
promotions, which are utilized by retailers to build sales to consumers. Normal cases
of retailer promotions are temporary price reductions (TPRs), features and displays.

James and Zacharias evaluate the perception of customers on sales

promotion and also examine the differential impact identifying with cash discount and
free gift on the perception of customers. This study concludes that, the sales
promotion techniques are not perceived favorably by consumers and there is no
differential impact between two types of promotion techniques Viz. cash discount and
free gifts.

Edward and Gayibor (April-2013) assessed the sales promotional

mechanisms adopted and to determine how the sales promotion mechanisms affected

19
 
the behaviour of young consumers concentrated on Senior High School students in
Ghana. This study shows that, the sales promotional scheme has impacted numerous
young consumers to buy the product. This study contributes that, it has built up that a
considerable measure of young consumers, who are mainly boarding students in some
part of Ghana, make purchase decisions regarding purchase of laundry soaps for their
use at school.

Michael (2013) observed the aggregate business performance of a country’s

financial unit shapes its economy, since a nation’s wealth is measured for the most
part regarding its Gross Domestic Products. This Study finds that, the Trade
promotional techniques influence marketing performance through the use of trade
allowances and trade contests.

Boland and Erickson (2012) looked into the effect that sales promotions have
on children's purchase behavior furthermore children would select a sale framed as a
quantity discount rather than a percentage discount due to the ease of processing the
outcome of the sale. This study finds that, the children have difficulty applying
mathematical concepts to sales promotions, regardless of classroom mastery of the
associated operations.

Omotayo (2011) investigated the impact of sales promotion on customer

loyalty in the telecommunication industry. This study finds that, the impact of sales
promotion on customer loyalty using a sample of customers of mobile
telecommunication services. This study concludes that there is relationship between
sales promotion and customer loyalty.

Nelson (2005) this study focuses on impact of promotional technique such as,
coupon, price discount, free sample, bonus pack and in-store display on product trial
and repeat purchase behaviour, as well as the moderation effect of gender on these
relationships. This study results shows that, the promotion, physical distribution and
logistics implications are impact of promotion techniques.

Conclusion:

This review of literature makes it clear that many studies have been
undertaken on the sales promotion strategies in Fast Moving Consumer Goods
market. But very less research activities have been done under individual sales
promotion strategies aspects also like Consumer Brand Loyalty, Consumer Buying

20
 
Behavior, Price Promotion and Brand Loyalty, Ingredient branding, consumer
behavior based on culture, Buyers’ Perception of Product-Quality, Price Promotions,
Promotional Mix, therefore it is necessary to study in depth of sales promotion
strategies on FMCG. There is a need to take in to consideration of all possible sales
promotion strategies as a research.

21
 
 CONCEPTUAL FRAMEWORK OF SALES PROMOTIONAL
STRATEGIES

Introduction:

Every organization goal is to reaches their goods and services to the customers
and there by lead the market, to reach the customer and make them satisfy the
organization should perform many activities. That activity is called marketing and it is
a significant function in each business Marketing is the performance of business
activities that directs the flow of goods and services from producer to the customer. It
is the activity that directs to satisfy the human needs through exchange process.
Marketing starts with the identification of a specific need of customers and ends with
satisfaction of that need. Marketing activity can explain in 7p’s element i.e. product,
place, price promotion, process, people and physical evidence. These elements are
called Marketing mix.

Promotion is one of the most important Marketing Mix elements. Promotion

decisions are taken simultaneously with other decisions like finding target group,
determining objectives, budgeting for promotion, launching of new products,
distribution etc. Promotion is one of the variables through which information
regarding products or services is being communicated to customers to change their
attitude. Marketers are concerned with effective utilization of promotion mix to
increase sales. Methods of promotion include advertising, personal selling, direct
marketing, sales promotion and packaging.

Sales Promotion is the activity that aims directly to influence buyers to buy
products/services to increase sales. In sales promotion mainly three parties are
involved i.e. consumers, traders and sales force. Sales promotion refers to many kinds
of incentives and techniques that are directed towards consumers, traders and sales
force with the intention to increase sales in short term. Sales promotion strategy have
two kinds i.e. Consumer oriented sales promotional strategy and trade oriented sales
promotional strategy. Consumer oriented sales promotional strategy is an important
strategy in today’s competitive globe to lead the market because the customer is an
ultimate judge to the product there by it is necessary to promote them. It Comprises
Coupons, Price off, Freebies, Scratch Cards, Luck Draw, Bundling Offer and Extra
Quantity.

22
 
Marketing:

Marketing is the belt that connects that two major wheels of any economy
namely producers and consumers. Marketing is the creation of utilities as goods and
services get value addition by the time they reach the consumers. That is why, in
economic jargon “marketing” refers to “all the activities involved in the creation of
place, time, possession and awareness utilities”.

Definitions:

“Marketing in a free economy is the skill of selecting and fulfilling consumer

desires so as to maximise the profitability per unit of capital employed in the
enterprise” - Professor Glasser

“Marketing is the process of discovering and translating consumer needs and

wants into product and service specification, creating demand for these products and
services and then, in turn, expanding the demand” -Harry L. Hansen

“Marketing is a social and managerial process by which individuals and

groups obtain what they needed and want through creating and exchanging of
products and value with others” - Philip Kotler

Elements of Marketing Mix: Most of the companies utilizing Marketing Mix which
incorporates…

• Product
• Place (Channel of Distribution)
• Price
• Promotion
• People
• Process
• Physical Evidence

These are the starting four essential pillar of marketing mix. Most of the
marketing techniques are based on these criteria and also three new elements. In the
services marketing concept, these are also defined as following.

23
 
 Product
Physical Pricing
Evidence

7p’s of
Process Place
marketing
mix

People Promotion

Promotion:

Promotion is a form of communication with an additional element of

persuasion to accept ideas, products and services and hence persuasive
communication becomes the heart of promotion. People must know that the right
product at the right price is available at the right place. It is said that in a competitive
market without promotion nothing can be sold. In marketing, effective
communication is absolutely necessary even though you have a super product, best
package and also you offer a fair price. People will not buy your product, if they have
never heard of it and they are simply unaware of its existence.

Meaning: Promotion is the Process of marketing communication to inform, persuade,

remind and influence consumers in favor of the product or service.

Definition: According to Philip Kotler, Promotion is compasses all the tools in the
marketing mix whose major role is persuasive communications.

According to Stanston, Promotion includes, advertising, personal selling,

sales promotion and other selling tools.

Promotion is one of the important elements of marketing mix. There are so

many elements of promotion such as …

• Advertising
• Direct Marketing
• Personal Selling
• Public Relations
• Sales Promotion

24
 
Advertisements: Advertisement is the correspondence handed-off from organizations
to influence a group of people to buy their items. This correspondence is typically
through different types of paid media, TV and radio ads, print ads, billboards and
more recently, product placement. Promotions are set where publicists trust they will
come to the biggest, most important crowd. Business organizations utilize publicizing
to drive the utilization of their product, while non-profit organizations may put
advertisement to raise awareness or encourage a change in behavior or perception.

Direct Marketing: Direct marketing is a channel agnostic form of advertising which

allows businesses and nonprofit organizations to communicate straight to the
customer, with advertising techniques that can include cell phone text messaging,
interactive consumer websites, online display ads, database marketing, fliers, email,
catalog distribution, promotional letters, targeted television commercials, response-
generating newspaper/magazine advertisements and outdoor advertising.

Personal Selling: Personal offering is the process of communicating with a potential

buyer face to face with the purpose of selling a product/service. The primary thing
that sets personal offering from different techniques for selling is that the salesperson
conducts business with the customer in person. Though personal selling is more likely
to be effective with certain types of products or services, it has important applications
for nearly all kinds of small businesses. In fact, most of history's successful
entrepreneurs have been skilled salespeople, able to represent and promote their
companies and products in the marketplace.

Public Relations: Public relations are the practice of managing the spread of data
between an individual or an organization and the public. Public relations may
incorporate an organization or individual gaining up presentation to their audiences
utilizing topics of public interest and news items that don’t require direct payment.
This differentiates it from promoting as a form of marketing communications. Public
relations are the idea of creating scope for customer for free, rather than marketing or
advertising.

25
 
Sales Promotion:

Sales promotion is one of the five aspects of the promotion mix. 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. Sales promotions can be directed at the customer, sales staff or
distribution channel members. Sales promotions targeted at the consumer are called
consumer sales promotions. Sales promotions targeted at retailers and wholesale are
called trade sales promotions.

Sales promotion includes several communications activities that attempt to

provide added value or incentives to consumers, wholesalers, retailers, or other
organizational customers to stimulate immediate sales. These efforts can attempt to
stimulate product interest, trial, or purchase. Examples of devices used in sales
promotion include coupons, samples, premiums, point-of-purchase (POP) displays,
contests, rebates, and sweepstakes.

Sales promotion is implemented to attract new customers, to hold present

customers, to counteract competition, and to take advantage of opportunities that are
revealed by market research. It is made up of activities, both outside and inside
activities, to enhance company sales. Outside sales promotion activities include
advertising, publicity, public relations activities, and special sales events. Inside sales
promotion activities includes window displays, product and promotional material
display and promotional programs such as premium awards and contests.

Sales promotion often comes in the form of discounts. Discounts impact the
way consumers think and behave when shopping. The type of savings and its location
can affect the way consumers view a product and affect their purchase decision. The
two most common discounts are price discounts and bonus packs.

Definitions:

Kotler defines sales promotion as: “Sales promotion consists of a diverse

collection of incentive tools, mostly short-term designed to stimulate quicker and/or
greater purchase of particular products/services by consumers or the trade.”

Roger Strang has given a more simplistic definition i.e. “sales promotions are
short-term incentives to encourage purchase or sales of a product or service.”

26
 
Reasons for Growth of Sales Promotion:

There are various reasons that are favourable to the development of sales
promotion:

¾ Increasing Competition
¾ Customers have Become More Price Sensitive
¾ Sales Promotions Generally Create an Immediate Positive Impact on Sales
¾ Products have become more standardized
¾ Consumer Acceptance
¾ Advertising has Become More Expensive And Less Effective
¾ Trade has Become More Powerful
¾ Emphasis on Sales Volumes
¾ Sales Promotions Maximize Profits
¾ Introducing an Element Of Interest
¾ Impulse Buying is Increasing
¾ Sales Promotion Specialists are Available

Objectives of Sales Promotion:

¾ To launch new products

¾ To attract new customers and stimulate demand
¾ To increment sales during slack periods
¾ To promote dealers to carry large stocks
¾ To enhance public image of the firm
¾ To counter sales promotion campaigns of competitors.

Advantages of Sales Promotion:

1. Price discrimination: Producers can introduce price discrimination through

the use of sales promotions. They can charge different prices to different
consumers and trade segments depending on how sensitive each segment is to
particular prices.
2. Effect on consumer behaviour: Sales promotions are mostly announced for a
short period; customers may feel a sense of urgency and stop comparing the
alternatives. They are persuaded to act now rather than later.
3. Effect on trade behaviour: Short-term promotions present an opportunity
and encourage dealers to forward buy. This forward buying ensures that

27
 
 retailers won’t to go out of stocks. As dealers have more than the normal
stocks, they think it advisable to advertise in local media, arranged displays
and offer attractive promotion deals to consumers. These actions help in
increasing the store traffic.
4. Regional Differences: The South is generally characterized by greater degree
of going out and people tend to drink outside the house. The Tamilian,
consumer in particular, is value oriented, rational and looks up to film stars,
while the Keralite is more international in his outlook. The Mysuru an is as
Cosmopolitan as his Mumbai or Delhi counterpart. Such factors have to be
taken into consideration while providing incentives to the customers.

Sales Promotional Strategies: Sales are the lifeblood of a business, without sales
there would be no business in the first place; therefore it is very important that if a
business wants to succeed, it should have a sales promotional strategy in mind. The
primary objective of a sales promotion is to improve a company’s sales by predicting
and modifying your target customer’s purchasing behavior and patterns.

Sales promotional strategy is an activity that is designed to help boost the sales
of a product/service. This can be done through an advertising, public relation, free
samples, free gift, trading stamps, demonstrations and exhibitions, prize giving
competitions, price cuts and door-to-door sales, telemarketing, personal sales letters
and emails.

There are three types of Sales Promotional Strategies:

• A push strategy

• A pull strategy or

• A combination of the two

• A Push Strategy: A ‘push’ sales promotional strategy involves ‘pushing’

distributors and retailers to sell your products and services to the consumer by
offering various kinds of promotions and personal selling efforts.
• A Pull Strategy: A ‘pull’ sales promotional strategy focuses more on the
consumer instead of the reseller or distributor. This strategy involves getting
the consumer to ‘pull’ or purchase the product/services directly from the
company itself. This strategy targets its marketing efforts directly on the

28
 
 consumers with the hope that it will stimulate interest and demand for the
product.
• A Combination of Two Strategies: A ‘combination’ sales promotional
strategy is just that; it is a combination of a push and a pull strategy. It focuses
both on the distributor as well as the consumers, targeting both parties directly.
It offers consumer incentives side by side with dealer discounts.

The Short term Impact of Promotions: Let’s have look at the effect of promotions
on buying behavior during the promotion period i.e. the week or the month when the
promotion was being run. Most of the empirical studies have concentrated on the
effect of promotions in the short term. The key discoveries over the studies are
examined below:

• Temporary cost off substantially increase sales.

• Sales Promotion leads to brand substitution with the product category.
• Sales Promotion prompts to buy acceleration/stockpiling effects.
• Sales Promotion prompts to essential request development for a classification.
• Sales Promotions influence sales in complementary and competitive
categories.

The Long term Impact of Promotions: Strategies are work to profit for longer time;
same is valid in sales promotional strategies. The outcome demonstrated that
consumer promotions for leading brands of established packaged products had no
after effects on the brand’s sales or repeat buying loyalty. The extra sales of a brand
while promoted came virtually all from the brand’s existing long-term customer base
for which the experience of buying the promoted brand was nothing new.

It is found that despite the short term effects of promotions are solid; these
promotions rarely display long term effects. It is watched that every sales component
generally lacked a permanent effect and the effect of promotion was short lived and
increase in promotions affected consumers’ stockpiling decisions in the long run.
They found that the consolidated short and long term elasticity of promotions was
zero. The stockpiling instigated by a promotion was basically offset by reduced
demand in the long term. Thus increased sales were increasingly an aftereffect of
offers obtained from the future than expanded consumption.

29
 
 From these components Sales Promotion is the component which is in the
center of this exploration. Further Sales Promotion is very wide term it includes …

1. Customer Oriented Sales Promotion

2. Trade Oriented Sales Promotion
1. Customer Oriented Sales Promotion: Customer Oriented Sales Promotion is the
main topic of this research. Here emphasize is given to motivate consumer to
increase sales. Consumer Oriented Sales Promotion includes Sampling,
Couponing, Premiums, Contest, Refunds, Rebates, Bonus Pack’s, Price-off, Event
marketing etc.

Marketer’s uses consumer oriented sales promotion tools for increment short term
sales, incite trial, diminish stock, build up a brand name, make cross offering, adapt
up with competition and avoid advertising clutter.

Tools of customers Oriented Sales Promotion: There are such a large number of
devices accessible to marketers for achieving the goals of sales promotion. These
techniques should be utilized considering all other components influencing such as
cost, time, competitors, availability of goods etc. These techniques are as under…

1. Coupons: Coupon is the most established and most broadly utilized

method for sales promotion. Coupons have been utilized since 1895. It is
generally utilized by packaged goods. To support up the sales not only
manufacturer but retailers personally can also used. A coupon leads to
price reductions so as to encourage price sensitive customers. Non users
can try a product which may leads to regular sales.

2. Price-off: A price-off is essentially a lessening in the price of the product

to build sales and is very often used when introduction a new product. A
reduction in price always increases sales but the use of this technique
should be carefully considered in the current market situation. Price-off is
the most preferred sales promotion technique because consumers response
very positively to this scheme. Not only that but it also cause large
increase in sales volume. Price-off reductions are typically offered tight on
the package through specially marked price packs.

30
 
 3. Free samples: Free samples are a prevalent type of modern marketing and
are a portion of the best things about the web. The meaning of free
samples is products/services given away for free at no cost to the buyer.

4. Scratch Cards: A scratch card is a small token, usually made of

cardboard, where one or more areas contain concealed information: they
are covered by a substance that cannot be seen through, but can be
scratched off.

5. Quantity off: Quantity off is a marketing strategy that involves offering a

few items available to be purchased as one joined product. A heap of
products is sometimes referred to as a package deal or a compilation or an
anthology.

6. Contests/Sweepstakes: The most important difference between contests

and sweepstakes is that contests require entrants to perform a task or
demonstrate a skill that is judged in order to be deemed a winner, while
sweepstakes involve a random drawing or chance contest that may or may
not have an entry requirement. At one time, contests were more commonly
used as sales promotions, mostly due to legal restrictions on gambling that
many marketers feared might apply to sweepstakes. But the use of
sweepstakes as a promotion tactic has grown dramatically in recent
decades, partly because of legal changes and partly because of their lower
cost.
7. Price Deals: A consumer price deal saves the buyer money when a
product is purchased. The main types of price deals include discounts,
bonus pack deals, refunds or rebates and coupons. Price deals are usually
intended to encourage trial use of a new product or line extension, to
recruit new buyers for a mature product, or to convince existing customers
to increase their purchases, accelerate their use, or purchase multiple units.
8. Premiums: A premium is tangible remuneration that is given as motivator
for playing out a specific demonstration as a rule purchasing a product.
The premium might be given for free or might be offered to consumers for
a significantly decreased price.
9. Sampling: An indication of a fruitful advertiser is getting the product
under the control of the consumer. Sometimes, especially when a product

31
 
 is new or is not a market head, a successful strategy is giving a sample
product to the consumer, either free or for a small fee. But in order for
sampling to change people's future purchase decisions, the product must
have benefits or features that will be obvious during the trial.
2. Trade Oriented Sales Promotion: Trade Oriented Sales Promotion planned to
inspire channel member of the company and to urge them to push company’s product.
Trade Oriented Sales Promotion incorporates dealer contest and incentives, trade
allowances. Point-of-purchase displays, sales training programs, trade shows,
cooperative advertising and other programs designed to motivate distributors and
retailers to carry a product and make an extra effort to push it to their customers.

Sales promotion from the retailer’s/ wholesaler’s perspective:

¾ Perceptions on Scheme Preference: It was observed that retailer saw price

offs as a better form of sales promotion activity. Price offs as they would see it
had generally a greater effect contrasted with some other form of sales
promotion activity like Bonus packs, Contests, Premium etc. Retailers favored
price offs the most, then bonus pack, contests, premium, in order of
importance.
¾ Perceptions about Buying Roles: Retailers saw that the person who went to
the shop was the decider of a toilet soap brand and not the Income supplier. It
could be deduced that perceivability of data about the sales promotion activity
at the purpose of purchase could result into the buy of a promoted brand.
¾ Perceptions about their role in decision-making: Retailer had moderately
low impact in influencing decision. It could be derived that perceivabilty and
awareness about the plan were the basic achievement considers with the goal
that pull could be made.
¾ Perceptions about Communications of Sales Promotion Schemes: Retailers
perceived that role of word of mouth and television advertising played an
important part in providing information inputs to consumers regarding sales
promotion activities.
¾ Variations in Information Flow: Smaller retailers received relatively less
support compared to supermarkets in terms of servicing, margins, information
about sales promotion activities from the dealers. Many a times small retailers

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 were only informed verbally about sales promotion schemes by the dealer
salesmen during the scheduled weekly visits.
¾ Dealer-Retailer Dynamics: At the time of sales promotion activities, dealers
had tendency to push unwanted stocks onto the smaller retailers. In fact these
retailers preferred to stock variety of brands and wanted payment for shelf and
window display to increase traffic into their store. However, supermarkets and
big retailers were pampered and given special services and given better
margins and better allowances.
¾ Margins: It was found that in sales promotion schemes margins varied from
6% to15% depending of the size of the retail outlet, bargaining power of a
retailer, quantity ordered by him etc. Mostly margins were linked to size of the
volumes that were ordered.
¾ Perceptions about terms and conditions: Retailers were not found to be
happy with sales promotion schemes where their margins were cut on the
pretext of just fast movement of inventory of the brand being promoted. Also
if additional incentive was offered it was subject to minimum performance
requirement.
¾ Nature of POP: Retailers showed that the greater part of the Point of
Purchase materials were implied for brand advertisement and not for giving
data regarding the plans. In this way it could be derived that company’s follow
up was not sufficient.
¾ Servicing during duration of Scheme: In stock-out situation during the
running of the sales promotion schemes, smaller retailers had to wait for
replenishment of stocks till the next scheduled weekly visit by the dealer
salesman but big retailers were serviced on telephonic request for
replenishment of stocks. This clearly indicated the disparity in treatment.
¾ Gifts for Retailer inspiration: Companies now and again were rewarding
retailers by giving free gifts like thermos flasks or clocks if they sold more
than certain quantity in a given period. Companies were trying to motivate
retailers.
¾ Perceptions about mass media announcements: Retailers saw that at
whatever sales promotion plans was reported on TV, it made draw and they
were more than willing to stock such brands.

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 ¾ Post Promotion Behavior: Retailers watched that in most cases sales
promotion plans on a brand might urge a purchaser to switch a brand
incidentally however he would return to unique brand after promotion.
¾ Handling Problems: Many a time’s retailers needed to handle different sales
promotion schemes simultaneously in a category and also across categories
and there was no formal communication planning either from the dealer or the
company. Remembering each offer and handling was a problem especially for
a small retailer which was often an as one-man show.

Conclusion:

Intrinsically, sales promotional methods are planned to directly affect on

purchasing behaviour, which suggests their short-term focus. However, each part of
correspondence by a company has some kind of impact on the company‘s brand
image and therefore any company which has perceived the significance of thinking
strategically knows that it must look past short-term impacts. In terms of brand
building, Sales Promotion has generally been connected with a negative long term
affect because of its predominantly price orientated nature. The upgraded arranging in
the Sales Promotional process, along with a closer analysis of all the Sales
Promotional techniques, will lead a company with a premium brand positioning to the
more innovative structures, which don’t depend on product rebates.

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