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Sales

SALES PROMOTION
Sales promotion includes several communication activities that attempt to provide added value or incentive to consumer, wholesalers, retailers or sales force to stimulate the sales.  Sales promotion describe promotional methods using special short term techniques

TYPES OF SALES PROMOTION Consumer promotion  Trade promotion  Sales force promotion  .

OBJECTIVE OF SALES PROMOTION Building product awareness  Creating interest  To increase sales volume in short term  Attract more customer  .

INFLUENCES  Push Strategy calls for using the sales force and trade promotion. .  Pull Strategy calls for spending on advertising and sales promotion to build consumer demand.

OBJECTIVE OF TRADE PROMOTION Buy more  Building relationships  Stock during off season  Display of new product launch  Competition  .

OBJECTIVE OF SALES FORCE PROMOTION Increase the level of motivation  Getting market information  Encourage selling a new product  .

  E. Off on next purchase . Returned empty pack and get 5rs. white provides coupons inside the pack.MAJOR CONSUMER PROMOTION TOOL Free Samples : Company provide samples of the product in the mail .by retail store.g Mr. attached in the magazine  Coupons: Company provide coupons to their consumers inside the pack of products or inserted in the magazine or newspaper ads.

MAJOR CONSUMER PROMOTION TOOL  Discounts: Company provides discount offer to their customer when they buy the products Buy 1 get 1 free: Lux provide buy 3 get 1 free offer e.g Globus provide 50% discount   Combo offer: two related products banded together. Eg Colgate offers combo offer for paste and brush together .

. e. Samsung and LG provides allowance to their retailers in the season of Diwali. An advertising allowance and display allowance compensates retailers for advertising the manufactur’s product.MAJOR TRADE PROMOTION TOOLS  Price Off : Straight discount of the list price on each case purchased during the stated period.g.g. Nokia offer to their retailers price off facility  Allowance : An amount offer in the return of the retailers agreeing to feature the manufacturer’s product. e.

e. Nestle Eclairs provides free goods offers to their retailers. e. counter pieces. product displays.g.g.MAJOR TRADE PROMOTION TOOLS  Free Goods : Offers of extra cases of merchandise to intermediaries who buy the quantity or who feature a certain flavor or size.  . Outside signs. window displays. POP Displays : This is extra tool of sales promotion given by the company to retailers to boots the sales.

Nokia provides their retailers sales 5 pack of mobiles and get extra 2 % margin.MAJOR TRADE PROMOTION TOOLS  Push money : An extra comission paid to retailers to push the product.g. . e.

 Increased repeat purchase  Increased short term sales.  .  Provides quicker result.  Good short term promotion tool.  Increased Brand switching.ADVANTAGE OF SALES PROMOTION Increased buying confidence customer  Increased retention.

 Less Profit margin.DISADVANTAGE OF SALES PROMOTION Dangerous in long term basis.  Damage the image in consumer’s mind.  .  Risk Factor getting high.  Reduced the effect over there.

DESIGN & EVALUATION .

. These factors include      (1) place of sales promotion in marketing strategy (2) allocation of budget (3) present and expected competitive moves and (4) significant external macro environmental factors. The starting point in developing the promotional design is to specify the sales promotion objectives. trade and sales force. The range of sales promotion objective is fairly large because the target groups involved can be consumers.SALES PROMOTION DESIGN  There are a number of internal and external factors that influence sales promotions design.

STEPS .

1. and Sales force promotion. singly. .  a. Promotion Choice There are different types of promotions that can be used. c. b. or in combination: Consumer promotion Trade promotion.

or only selected items in the line? Should the promotions be run on higher priced or lowerpriced products. or the promotion should be run on regular packs ?    .2. and different variations of the product. or models. Sales promotion planners have to decide whether to run promotions on the entire product-line.  Product Choice This step focuses on choosing the products for sales promotion. the products that contribute more to the sales or those that contribute less? In case of consumer non-durable products. their pack sizes. etc. would it be advantageous to come out with special promotion packs.

this may also lead to cost escalation. they provide some degree of protection from competitive moves.  . Excess product stocks from one market can be shifted to another market where the sales potential is more.3. When promotion programmes are developed for regional markets. developing different regional promotional deals can complicate sales forecasting. production scheduling and physical distribution.  Choice of Market Areas Promotion planners have the option to select national or regional markets. However. Higher inventory risk would require that promotions be developed for separate markets.

Duration and Frequency When the product or brand inventories are less than normal in trade channels. However. Promotion Timing. some manufacturers plan their promotions when annual marketing plans are developed. and the complexity of the promotion offer.     . the objective of the promotion would be to build inventories. Frequency of promotion depends on competitive situation. deal sensitivity of customers. Ideally. but when the inventories with the traders are high then the objective would be to clear the inventories. sometimes marketers face compulsions like unexpected moves by competitors The duration of consumer promotion should be such that a larger percentage of customers get exposed to the promotion offer.4. the interest of the trade. It is inadvisable for the producer to announce a promotion when the retailer shelves are full with the competitive brand because the promotion is quite likely to prove unprofitable.

generate and screen alternatives.Promotion Planning Process Marketing objectives Combined promotion and advertising budget Marketing strategy Promotion objectives and performance criteria Company policy Review of past performance Advertising objectives Promotion strategy Advertising strategy Prepare detailed sales promotion budgets Decision on promotion tactics. design the schedules Review performance criteria (pretest if needed) Design advertising Implement promotion Evaluate performance (concurrent & post-promotion evaluation) .

each promotion event must be carefully created. . First step in promotion planning is situation analysis. out of the combined total budget for advertising and sales promotion. Allocation of budget to sales promotion. There is vast choice of promotion tools. A clear understanding of various tools and techniques is essential for the planners to make the winning choice from among alternatives. vi. v. iv. Considering the objectives and the budget allocation. ii. iii. and the combinations of these tools seem to be endless.GUIDELINES TO PLANNING SALES PROMOTION i. Next step relate to sales promotion design issues.