SALES PROMOTION RESEARCH

Research question

How does sales promotion of a company influence customer purchasing?

WHAT IS SALES PROMOTION

Sales promotion can be best describe as the process of persuading a potential customer to buy

the product. Sales promotion is design to be used as a short-term tactic to boost sales. It is

rarely suitable as a method of building long term customer loyalty

Example of sales promotion is

Discounted price

Everybody loves a deal, and as Black Friday and Cyber Monday consistently demonstrate

year after year, consumers will go crazy over a good price. Use holidays and events in our

Marketing Calendar to your advantage by having sales or specials at your business.

IMPORTANCE OF SALES PROMOTION

Sales promotion is an important component of a promotion campaigning programme. It can

be specific tool of the marketing strategy of an enterprise. Because of increasing level of

competition and costs of advertisement, producers largely use this technique as a promotional

tool.

Sale promotion techniques are not only useful to the producers and distributors, but also are

useful to consumers
THEORIES OF SALES PROMOTION

Sales Promotion Theory is the study of increasing short-term sales revenue. This study can be

conducted readily and effectively as the results can be measured quickly and, because of the

narrow focus of the promotion, other factors can be tightly controlled for. Sales promotions

are a source of some debate, as some argue that increasing short-term sales does not lead to

long-term profitability. Others argue that the benefits of creating more income for the

company in the short term allows that company to more rapidly grow to gain a larger market

share. While promotions come in many different forms, most fall into three categories: Push,

Pull, and Combination.

Push Promotions

Using the Push Theory, you can increase sales by creating incentives to wholesalers or

retailers to sell more of your product. In this method you would offer discounts to

wholesalers or retailers who buy your product in bulk. This leaves them with more of your

merchandise on hand and drives them to sell more of your product. Giving them the discount

“pushes” them to buy more of your product at a lower price to increase the amount of money

they make. In turn they must “push” your products to customers because they will make a

better return on them than on similar products supplied to them by your competitors.

Pull Theory

The Pull Theory is about trying to market directly to customers to increase their demand for

your product. Advertising and tie-ins with other products or services is the key to this

strategy. The theory goes that if you increase the demand for your product by consumers,

they will in turn demand the product from retailers, retailers will demand more of your

product from wholesalers and wholesalers will demand more products from you. This is a

way to increase your sales without decreasing the sale value of your merchandise. Most of the
costs are in advertising, so using a tie-in with a related product or service can disperse this

cost across both companies.

Combination Theory

This theory requires both of the above theories working together. The "push" is used to get

more product into the hands of retailers and wholesalers while advertising and product tie-ins

with other products are used as a "pull" to get more people to want to buy the product.

Grocery stores often use this tactic. They fill stores with products they have a high profit

margin on (the push) and run comercials that advertise the store ("A great place to shop" or

"Your hometown grocery") rather than a specific product (the pull).

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 shoppingwith them.This strategy is usually used if

the distributor is hesitant to carry a product, since it gets itsrequired consumers without

having to go to retail outlets. “Car dealers often provide a goodexample of a combination

strategy. If you pay attention to car dealers’ advertising, you will oftenhear them speak of

cash-back offers and dealer incentives.”Because sales promotion is an initiative carried out

by an organization to promote a product toensure 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

APPLYING SALES PROMOTION TO A BUSINESS

The research carried out on sales promotion gives a clear definition as to what sales

promotion is.the researcher choose to apply this information to a Restaurant. Doing this

reseacher the researcher plan to outline the advantage and disadvantage of using sale

promotion. The aim of this research is to find out how sales promotion of a company

influence customer purchasing.

A resrurant its a place where the company offer bout product (food) and services like

waitering service or taking a simple order. Sale promotion help a Restaurant to gain potential

customer by using the combination factor of sale promotion by doing this it let customers

want to alway come back and possible spread the use of communications techniques such as

word of mouth to get the business more recognizable.

Give Discounts

You may have a lot of local competition due to chain restaurants and these restaurants may be

difficult to compete against. Steal an idea from these chain restaurants by using discounted

days for certain food items. For example, you can offer reduced drink prices during certain

times. You can offer kids-eat-free programs on specific days. Half-off appetizers can also

help encourage customers to dine at your restaurant. Make sure that the community is aware

of your discounts by placing the information on a sign or banner outside your business. You

can also provide a discount on the customers' receipts so they will return to your restaurant.

Happy Hour In Your Restaurant

This promotion is intended to boost business during slow hours in a day. Happy hour is

usually in a late afternoon Monday through Thursday, and often taking place at some period
between 4 PM and 8 PM. In most cases the “happy hour” lasts longer than one hour.Let your

customers enjoy happy hour food and drinks prices after a long working day! Make a happy

hour menu with half-price wine lists, cheap cocktails, and side dishes and you guests would

happily pay and eat much more.

The researcher found out that sale promotion can be used both ways for personal selling and

advertising the resturant .using sale promotion can boost sale amentioned use a happy hour

on a slow day.

But with benifits and advantage of the sales promotion come disadvantage.have a happy hour

in a resturant and a specific time of the day doesnt mean the food is going bad. Company

owner sees this as an advantage to get more potential customer into the establisher to

generate more sales of the day.

One advantage of using sales promotion for a Restaurant includes:

The primary benefit of sales promotions is that they induce customer traffic and sales by

offering a lower price and better value proposition. Everyone loves a bargain, right? Taking

25 percent off the price of a good without altering its benefits increases the customer's

perception of value. Companies also use sales promotions to achieve other non-revenue-

generating objectives. When a new business launches, for instances, promotions are a way to

attract customers away from competitors. A start-up may prioritize establishing a customer

base before it focuses on profits.

And a disadvantage of sales promotion is:

With certain types of sales promotions and discounts, it can be difficult to control the nature

and timing of purchasing. You cannot try to prevent a customer who would pay regular price

from taking advantage of a discount in most cases. Even with an expiration date on a
promotion, customers may delay coupon use until the final moments, which delays revenue.

For high-end brands, even the act of holding a sale can alienate customers. These customers

have a perception of luxury, quality and exclusivity. Regularly holding sales could undermine

this perception and damage the reputation of your brand.

Push promotional strategies work well for lower cost items, or items where customers may make

a decision on the spot. New businesses use push strategies to develop retail markets for their

products and to generate exposure. Once a product is already in stores, a pull strategy creates

additional demand for the product. Pull strategies work well with highly visible brands, or where

there is good brand awareness. This is usually developed through advertising. Apply this

technique to to the resturant the researchers found out that this merhod of promotion work both

way company owner look for explosure while customers are at the resturant because of it low

cost not because the food is of high quality .eg of this is Caviar ,caviar is of high quality produce

from a fish calleded sturgeon but because there is a high demand from customers for it resturant

owner use this to build the brand of there company.

In conclusion the researchers came up with reason that could influence customers purchase.

Customers influence comes from the effort made in persuading themoffering the coupon and gift

card so that they come back.customers and resurant owners have something in common that is

living up to there reputation and brand .a high class 5 star resturant ensure that customers gets A

grade products and cusromers ensure that they find the best value of there money at any cost

even if its a resturant with a larger brand and its well known .customer are also influence buy

customer service how well you treat them whether by a kind gesture or smile.