SALES AND PROMOTION

TOOLS AND TECHNIQUES

SUBMITTED BY RAGHAV DHONDGE
ROLL NO - 37
What Is Sales Promotion?

 Communication strategies designed to act as a direct inducement,

an added value, or incentive for the product to customers.
 Advertising & publicity may create the desire but its conversion
into sales can be achieved only by sales promotion through its
short-term incentives.
 Helps to shape the buying patterns, attract new customers, or
increase sales.
Tools Of Sales Promotion

 To increase the sales of a product, the producers or

manufacturers use various measures like free samples,
bonus, etc. These measures are called the tools or
techniques of sales promotion.
LIST OF TOOLS

 Free samples: These are distributed to attract consumers

to try out a new product and thereby create new
customers. Some businessmen distribute samples among
selected persons in order to popularize the product.
Common examples - shampoo, washing powder, coffee
powder, etc.
 • Premium or Bonus offer: This is a reward given to the
existing customers. This tool will help increase the sales of
the product among the existing customers itself. A milk
shaker along with Nescafe, mug with Bourn vita, toothbrush
with 500 grams of toothpaste might be some examples of
this tool.
 • Exchange schemes: It refers to offering exchange of old
product for a new product at a price less than the original
price of the product. This is useful for drawing attention to
product improvement.
 Most common example for this tool is - 'Bring your old mixer-
cum-juicer and exchange it for a new one just by paying Rs.500' •
Price-off offer: Under this offer, products are sold at a price lower
than the original price. This type of scheme is designed to boost
up sales in off-season and sometimes while introducing a new
product in the market. 'Rs. 2 off on purchase of lifeboy soap, Rs.
15 off on a pack of 250 grams of Taj Mahal tea, Rs. 1000 off on
cooler' etc., are some of the common schemes.
Coupons: Sometimes, coupons are issued by manufacturers
either in the packet of a product or through an advertisement
printed in the newspaper or magazine or through mail. These
coupons can be presented to the retailer while buying the
product. The holder of the coupon gets the product at a
discount. Best example for this is coupons distributed by the
pizza restaurants like dominos, pizza hut, etc.

Fairs and Exhibitions: Fairs and exhibitions may be

organized at local, regional, national or international level to
introduce new products, demonstrate the products and to
explain special features and usefulness of the products.
Apart from this small stalls are also placed in popular
locations where the products are sold in smaller quantity to
attract more customers.
• Bonus points: certain retail shops will have a scheme which will require
the customer to be a member of the shop and to acquire membership card for
the same. And every time the customer makes a purchase bonus points are
added to the card and at the end of the year gifts are given for the points
earned. Example – coffee day bonus points card • Money Back offer: Under
this scheme customers are given assurance that full value of the product will
be returned to them if they are not satisfied after using the product.
This creates confidence among the customers with regard to the quality of
the product. This technique is particularly useful while introducing new
products in the market.
• Scratch and win offer: To induce the customer to buy a particular product
'scratch and win' scheme is also offered. Under this scheme a customer
scratch a specific marked area on the package of the product and gets the
benefit according to the message written there
Exchange offer Scratch and win offer Bonus offer Price-off offer
Advantages Of Sales Promotion

 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.
Disadvantages Of Sales Promotion

 Increased price sensitivity Consumers wait for the promotion

deals to be announced and then purchase the product. This is true
even for brands where brand loyalty exists. Customers wait and
time their purchases to coincide with promotional offers on their
preferred brands. Thus, the routine sales at the market price are
lost and the profit margin is reduced because of the discounts to
be offered during sale-season. (E.g.)‘The Diwali Bonanza Offers’
on electronic goods.