There could be a number of reasons for companies to go for short-term increase in sales volume. The idea being that the customer would be attracted towards purchasing the product. Everything about a contest, whether display or sales, should convey the idea that it is something special. There was no limit on the number of entries one could send. During Super Bowl weekend, Pepsi introduces a … Samples distributed free, with or without a coupon, are often used to introduce a new product or induce trial of even an existing product by consumers. Marketers attempt to increase sales for an established brand in several ways, and sales promotion can play an important role in each. Marketing, Promotional Mix, Elements, Sales Promotion, Sales Promotion Objectives. Sales promotions are used to stimulate purchasing and sales by way of giving incentives or offers, and the objectives are to increase sales by informing […] However, it reduces the cost of promotion because of the low ‘redemption rate’. These objectives are for both marketers and traders. This work is done mainly by advertisement but other promotional activities help achieve this objective. Stimulating sales – Sales promotion helps in promoting larger sales in certain specified segments of market. To Add to the Stock of the Dealers. Creating talking points for sale persons, and. The practice of offering off-season discount is in vogue in almost all countries of the world. Maintaining support for established brands, iii. In-Store Activities 15. Objective # 5. Free premiums are usually free gifts or merchandise included in the product package. In particular conditions an institution follows sales promotion policies so that the popularity of the institution may increase. There should be reliable information about the competitive moves, and the inventory holding costs should not be high. Offer Details: The basic purpose of sales promotion is to increase the sales of a product by creating demand. This free access may include receiving product information via email. Sales promotions encourage the customers to try a new product. Tempting customers for the impulse purchases. 50 before the price rise, and the new price is Rs. Other sale techniques are used to the customers to purchase the product even in the off season. For example, one Maggi noodles packet free with the purchase of four, or one gets three soaps at the price of two. Through some sales promotion scheme or offer, the retailer can attract more number of customers to his outlet. These provide details of the product the advantages of a particular retailer’s products over the competitor, unique features and benefits, price, etc. For such schemes to work effectively, further inducement may need to be offered such as reduced prices. Increasing sales in off season – Buyers may be encouraged to use the product in off seasons by showing them the variety of uses of the product. Sales Promotion includes all activities which promote sales of the company’s product and services. 10. For example, the store could offer a money-off voucher with the hair gel bottle or the customer would be entitled to get a shampoo if they purchase the hair gel. Sales promotion objectives should be specific, measurable, clear and concise, practical and realistic, affordable and attainable. In general, long-term goals are considered communication objectives, while short-term goals are considered sales growth objectives. Once the customer shows his interest in the product, the salespersons can take off from there and complete the sale. Sales promotion objectives are consistent with marketing and marketing communications objectives. The promotional strategy shall encourage the effective distribution system to enable the middleman and the sales people to equip themselves with ready stock, to meet the demand of the consumers. For them, it would be appropriate to choose selected markets with high potential. It is an integral part of marketing effort. discounts are offered, com munications of sales promoti ons and objectives of the promotion. Colgate offers 25gm extra on their 200gm pack at the same price. For this purpose, sales promotion plans are started. Reminder promotion is very active during the maturity stage of product life cycle. The marketer or producer try to fulfil all the requirements, as desired by the consumers. (2) Increase’ Sales Volume – The main purpose of all Promotional activities is to increase the sales of the product or products of the company. Therefore, the customer is not able to associate that person with a single product. Free samples may be distributed to leading consumers who may be a source of advertisement for other prospective consumers. Different lucrative offers are launched to generate a favourable attitude of the consumers. To Supplement Advertising and Personal Selling Efforts, – The 3 Fundamental Objectives: Informing, Persuading and Reminding, Objective # 1. Sales promotion efforts are necessary to create awareness in the beginning, later on it seeks to develop brand image and product preferences among the buyers so that they may switch over to the company’s product. To Supplement Advertising and Personal Selling Efforts. Having persuaded customers to enter the shop, they could now be encouraged to buy by presenting the merchandise in such a manner as to create the purchase instinct in the customer’s mind; e.g. Learning Objective . Customers are told new methods how to use the product and this is done through work demonstration and cinema. Sometimes demonstrators are used in this context. Sales promotion keeps and memory of the product alive in the minds of the customers. Many retailers use the display material provided by suppliers very selectively due to the danger of producing a cluttered and uncoordinated retailing environment. One possibility, though, cannot be ignored that these brand switchers sometimes get exposed to better products and some of them may become repeat purchasers, almost every sales promotion that offers immediate value at the time of purchase may contribute to increasing sales-volume. 7. These new customers raise the collective sales volume. iv. However, they may vary with the type of target market and points of channel. Introducing new products – To induce buyers to purchase a new product, free samples maybe distributed or money and merchandise allowance maybe offered to business to stock and sell the product. However, they may vary with the type of target market and points of channel. The suppliers can initiate various sales promotion activities at their end. Sales promotion efforts are generally designed to assist the other communication activities undertaken by a store. Thirdly, sales promotion is meant to act as a powerful tool of competition. 5. 9. They develop or reinforce a favourable set of attitudes and influence their buying behaviour. The manufacturer or marketer has a good product, reasonable price, attractive package, a good sales force. On the other hand, trade-oriented promotions inspire the middlemen like dealers, distributors, wholesalers, retailers to work hard to gear up their business in order to reap more profit. For example, T. N. Sheshan, the former Election Commissioner, was used by Safal vegetables since he did not appear for any other product and he had an honest and upright image. To reduce seasonal decline, create the promotional activities help in maintaining the sales of the product in slack season, 6. There should be reliable information about the competitive moves, and the inventory holding costs should not be high. They induce buyers to purchase a new product by distributing free samples in the market. Reminding the consumers of their past satisfaction will persuade them to stay with the product and prevent them from shifting to competitors. As described by W. E. Myers in the competitive field, it is becoming necessary to differentiate its product or service from other competitors claim, through sales promotion devices. For example, awareness may be generated through advertising but sales promotion may be used tactically to overcome any resistance to purchase. It informs the customers and dealers all about the product i.e., attributes, colour, size, design, uses, price, packaging etc. Page: 545 Learning Objective: 4 190. Consumers develop a new reference price for the product and the increase does not appear to be as high as it was perceived earlier. If advertising is an indirect approach the sales promotion is a direct approach for persuading customers to buy. Sales promotion is often used to motivate consumers to try a new product. The producer through promotional means provides information regarding the quality, different uses and the price of the product or service to the consumers. — A.H.R. And since the customer also sends in some amount of money, the purchase price is easily covered. To Increase the Use By Present Customers: 5. An important objective of sales promotion is to encourage re-seller participation in displays and contests. To Reduce Seasonal Decline 10. OBJECTIVES OF CONSUMER ORIENTED SALES PROMOTION: INCREASE CONSUMPTION OF AN ESTABLISHED BRAND >>established brands competing in mature markets, against established competitors >> sales promotion can generate new interest in an established brand to help increase sales or defend market share against competitors. A free sample is generally welcome to almost all consumers and increases the probability of trail, and in some cases, purchase as well. Promoters called on about half a million households in this city. Marketing planning and reward systems may lead to an increase in the use of sales promotion because sales promotions encourage: the use of price-oriented promotions to generate short-term sales. For example, companies distribute free samples of their new product. The objectives for retailers may be to carry new items, encourage off-season buying, and offset competitive promotions, build brand loyalty, and so on. If Kwality walls want to improve the distribution of its ice cream, it can give 1 ice cream free for every ice cream sold. Fast Sales Boost. Thus, a quicker sales response results from sales promotion. to the customer’s while introducing the product. It is also difficult for them to get proper shelf-space in retail shops without offering incentives to re-sellers, or encourage trial by consumers without offering some immediate or extra benefit. Sales promotion methods work faster than advertisement. Of course the coupon should be of immediate value, instantly redeemable “on-package”, or the discount should be given at the time of purchase. In the total marketing process, the marketing goal of the organisation and the marketing strategy should be formulated at the time of programming the promotional activities. Related: 17 Importance and Role of Small-Scale Industries (Economy) Objectives of Sales Promotion Sales promotion programme should be developed to generate the confidence of the consumers regarding the claims focused. To overcome the seasonal fluctuation of products. It is required at all stages of product life cycles. Re off coupon is most appealing to price sensitive consumers. In spite of the several objectives of sales promotion, there are three which are fundamental, viz., informing, persuading and reminding. The promotional activity may be such that it does not directly hint at a purchase, but just a free trial. These new tie-ups mean more branding and sales opportunity for the company as well. The inter-purchase interval, that is, the interval between two successive purchases should be long for the consumers. Once the customers have been persuaded to enter the store, they have to be convinced to purchase by presenting the merchandise in such a manner that the customer feels a desire to buy. iii. Promotional activities such as advertising giving information regarding price and quality of the product as compared to other similar products existing in the market or offering various facilities to middlemen with a view to sell company’s goods in preference to other goods or offering gifts and discounts to customers, help arrest competition. They do not change brands easily, and consumer awareness and trial was low, despite heavy advertising. Small budget companies, who cannot afford sustained advertising expenditures to introduce new products, or match the competitive advertising blitz, find sales promotions to be more cost effective and helpful in generating sales volume. Informing is to educate the consumers about the product. Displays attract consumer attention who, are passers-by, or window shopper, displays serve them as reminders, encourage unplanned purchases, and increase store traffic. 11. 6. They must have some knowledge about the product offered by the producer. Contests are used to motivate dealers. Calling attention to new products and product improvements. The purpose of advertising is to improve dispositions towards a brand, while the objective of sales promotion is to translate favourable attitudes into actual purchase. A sweepstake is a promotion where winners are determined purely by chance; it cannot require a proof of purchase as a condition for entry. After the sessions over, they are not demanded any more. Frequency Programs – One of the fastest growing areas of sales promotion is the use of frequency programs also known as continuity or loyalty programs. Sales promotional devices make products popular among customers. Companies, who have small market share, cannot match the substantial advertising budgets of market leaders in the same industry. Display and advertising allowance are granted to dealers to compensate them for the space given for the display of manufactured products. Some products are used in a particular season. This is usually an in-store activity. The basic objective of sales promotion, is to develop good relationship with the customers and to establish a better understanding. Reactive sales promotion objectives are developed in response to some unfavourable market situation or where the objectives are essentially short term, such as the following-. Particularly, sales promotion serves as a bridge between advertising and personal selling. In the broad sense of the term marketing communication mix includes all the four marketing P’s – Product, Promotion, Packaging and Price. This is due to managers need to increase sales (inte… Although it is expensive sampling is generally considered the most effective way to generate trial. Hasbro, a toy company, teamed with the retailer Toys R Us to create direct mail booklets offering discounts on Hasbro toys only at Toys R Us stores. In order to establish high brand equity and to generate brand loyalty, the promoted brands or the products should be easily accessible and readily available to the consumers. To gain additional market share or additional revenue. Sales promotions are marketing events or sales efforts—not including traditional advertising, personal selling, and public relations—that stimulate buying. An independent panel of judges was to select the most appropriate entries for different category of awards. Products such as – cameras, sports goods, appliances, television, audio and video equipment, computers, and cars frequently use rebate offers to appeal to price-conscious consumers. 8. In case of competition from substitutes having superior technology, promotional activities cannot help much. also gives a hint to sales promotion objectives, the main objective being lifting the sales temporarily. To Develop Preferences and Convictions of Buyers: Sales Promotion Objectives – 9 Main Objectives, Sales Promotion Objectives – Informing, Persuading and Reminding, Sales Promotion Objectives – Dual Objectives of Sales Promotion, 1. Making consumers to switch brands in favour of firm. iii. a. To attract new customers and retain the existing ones iii. Manufacturers of packaged goods products such as – food, health care items, cosmetics, and toiletries are using this method. For this purpose, sales promotion plans are started. The firm may also announce some attractive trade-deals so that the shell space in retail shops is blocked. Reminding leads the firms to reinforce the previously satisfactory behaviour of the customer. 1. It helps marketers to realize a variety of objectives. a) A deal b) A contest c) A premium d) A rebate e) A sample Ans: a Feedback: A deal is a sales promotion that offers a short-term price reduction. To accomplish the objective, normally a combination of ‘push-pull’ strategy is used. Usually additional customers are won away from other firms. The promotion communicates what is required to be communicated to various sections of the trade i.e., customers, government, shareholders and dealers etc. 2. Motivate dealers to stock and sell more. Sales promotion means and includes all the activities that are performed by a producer, a dealer or a businessman to increase his sales. As these fittings are large and attractive, and kept at conspicuous places, they attract the attention of the customers. For this purpose, it provides suitable knowledge for recollection. Deflect Customer’s Attention from Price 7. To encourage repeat purchase, extra benefit offers are particularly effective. Moreover, sales promotion is used to retain customer’s interest in the product during offseason. Objectives of sales promotion. They induce buyers to purchase a new product. ii. Encourage Dealers to Participate in Display and Sales Contest 6. Marketing planning and reward systems may lead to an increase in the use of sales promotion because sales promotions encourage: the use of price-oriented promotions to generate short-term sales. The promotional activity aims to persuade the customers to buy in a greater quantity or buy other products in addition. For this period dealer were hired to place attractive displays to make ‘Palmolive’ soap a highly visible brand in the windows of retail stores. You might set a sales objective to improve your percentages of upsells. To increase buying response by ultimate consumers and selling efforts and intensity by dealers as well as by sales personnel, and. 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