v. Refunds or Rebates – Refunds also known as rebates are offers by the manufacturer to return a portion of the product purchase price, usually after the consumer supplies some proof of purchase. The objectives are: Sales Promotion 117 i. Share Your PDF File To Promote a New Product: In a large and decentralized market, market promotion is an inevitable … Objectives of Sales Promotion. To increase buying response by ultimate consumers and selling efforts and intensity by dealers as well as by sales personnel, and. To Reduce Seasonal Decline 10. 8. As stated by Schultz and Robinson in ‘Sales Promotion Management’ the objectives should be – a) Specific, b) Clean and concise, c) Practical and realistic, d) Measurable, e) Affordable and f) Attainable. (vii) To Help the Firm Remain Competitive: As all the companies conduct sales promotion activities, a company has to undertake sales promotion activities to remain competitive. Share Your PDF File For example, a one litre bottle of cola may say Rs 10 off. There can be a number of sales promotion objectives, depending upon the firm’s policies, marketing objectives, nature of the product and its stage in product life- cycle, level of existing and anticipated competitive activity, consumer response pattern, economic conditions, and the target group (consumers, traders, or sales force), etc. It also stimulates interest into a new product. Welcome to EconomicsDiscussion.net! A firm that feels threatened would like to protect its loyal customers from switching to the new competing brand. Such sales promotions are communicated to encourage existing consumers to forward- buy, for example, promotions, such as “get one free on purchase of four”. There could be specific incentives, such as ‘get one free on purchase of four.’ Some promotions offer free merchandise or cash refund offer by collecting tokens on purchases of a specified value. Launch a new product; Attract new clients; Stay competitive; Make existing customers buy more; Sell during off-season; Run clearance campaigns; Although the main goal of sales promotion is to increase demand in a particular product, you can reach several important goals. Sales promotional activities serve the following objectives: 1. activities make the product popular and increase the demand. Why Sales Promotion Increases Sales. Frequent-flier offer by some airlines is one such scheme, where the customer is allotted certain number of points, and on collecting specified points, gets a free offer of value. However, the appeal of these personalities may be declining because so many companies use the same celebrity models. One way to increase product consumption is by identifying new uses for the brand. Sales promotion has a capability to complement and supplement the advertising functions of the marketing. In these schemes, the customer has to write to the supplier for the gift enclosing empty packets, bottle crowns, etc. The idea being that the customer would be attracted towards purchasing the product. >> increase in sales promotion is motivated by marketing plans and reward systems geared to short-term performance and immediate generation of sales volume >> fixation on market share not only to introduce products >> view consumer and trade promotions as the most dependable way to generate short-term sales, particularly when they are price-related. The customers are given product samples for trial. ii. Free samples are distributed or money or merchandise allowance is offered to the dealers to stock and sell the new product. These products are such that customers, if left on their own, would be reluctant to spend money and give them a try. This free access may include receiving product information via email. Understanding them will help you create an effective promotion strategy. The purpose of sales promotion is to reduce the seasonal decline. Price increase can often have a negative effect on sales. However, there are also some other objectives of sales promotion. Consumers develop a new reference price for the product and the increase does not appear to be as high as it was. Sales promotion encourages consumers also to buy the product. The retailer plays no part in such promotional activities; he sells the merchandise as usual, with no significant effort and expenses from his end. Airline companies introduced frequent flyer programs, where the customer gets points on every trip and gets discount in the form of extra miles or in the form of price reduction. The “satisfied” consumers should feel “delighted” to retain long-term understanding for mutual satisfaction. Many companies use show-business personalities to endorse their products. ADVERTISEMENTS: a. A firm that feels threatened would like to protect its loyal customers from switching to the new competing brand. Introducing new arrivals and creating platform/awareness for newly launched products. The promotional programmes may be consumer -oriented or trade-oriented. To encourage consumers to buy from the promoters, a stainless steel teaspoon was given with only one cake of ‘Palmolive’ soap; subsequent cakes were sold on a marginal discount. State the main goals of a sales promotion. Detergent powders and cakes toilet-soaps, shampoos, oral hygiene products, and many other non-durable products, which are consumed every day, may respond well to such promotions. (6) To Face Competition Effectively – Promotional activities help the producer or seller to meet the competitive situations in the market. 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. It is sometimes hard to establish demand for a new product in a market of similar products. Since many products have seasonal demand like fans, refrigerators, an important aim of sales promotion of such goods is to encourage the purchase in off-seasons. Usually additional customers are won away from other firms. iii. (1) Providing Information – Promotion is an exercise in information, persuasion and influence. — A.H.R. The objectives for retailers may be to carry new items, encourage off-season buying, and offset competitive promotions, build brand loyalty, and so on. This is usually an in-store activity. Small budget companies who cannot afford sustained advertising expenditures to introduce new products, or match the competitive advertising blitz, find sales promotion to be more cost-effective and helpful in generating more sales volume. A diverse collection of incentive tools, mostly short term, designed to stimulate quicker &/or grater purchase of particular products/services by consumers or the trade. It is necessary while introducing the product to the market and thereafter, if there is any change in these elements, through various promotion tools i.e., advertising, salesmanship, publicity, point of purchase etc. Once the customer shows his interest in the product, the salespersons can take off from there and complete the sale. Deflect Customer’s Attention from Price: Sales Promotion Objectives – Top 7 Objectives: Launch New Products and Increase Trail, Encourage Dealers to Participate in Display and a Few Other Objectives, Sales Promotion Objectives – For both Marketers and Traders, Sales Promotion Objectives – The 3 Fundamental Objectives: Informing, Persuading and Reminding, Sales Promotion Objectives – Educating Customers, Stimulating Sales, Facilitating Co-Ordination, Attracting New Customers, Introducing New Products and a Few Others, Sales Promotion Objectives – 7 Main Objectives: Introduction of New Products, Attracting New Customers, Inducing Present Customers to Buy and a Few Others, Sales Promotion Objectives – 2 Most Important Objectives: Consumer-Oriented Sales Promotion and Trade-Oriented Sales Promotion, Sales Promotion Objectives – Increase in Sales Volume, Stock Clearance, Emphasizing Variety, Tempting Customers, Seeking More Involvement and Introducing New Arrivals, Sales Promotion Objectives – Providing Information, Increase Sales Volume, To Keep the Memory Alive, To Arrest Seasonal Decline, To Induce Middlemen and a Few Others, Sales Promotion Objectives – With Reasons for Growth, Sales Promotion Objectives – Increase Sales Volume, Launch New Product, Increase Trial, Encourage Repeat Purchase and Deflect Customers Attention from Price. The intention is to increase sales, make a large customer base, encourage trial, encourage repeat purchases to stimulate consumers' purchase. Some promotions offer free merchandize or cash refund offer by collecting tokens on purchases of a specified value. iii. Customers and middlemen are offered attractive discounts and free gifts. Such schemes are popular in toiletries and drinks. Sales promotion aims at wooing new customers. Middleman (Distributors and retailers) and consumers offered attractive discounts and free gifts to lure them to purchase more and more. Small budget firms have to exercise extreme caution and use such promotion judiciously because this may prove to be quite an expensive propositioned. Marketers can develop appropriate sales promotion to accomplish the objective of reducing the negative impact on sales. Its purpose is to trigger a memory. Instead, retail organizations should focus on establishing a promotion strategy that aims to achieve a specific objective, such as spurring traffic, increasing basket size, improving price perception among customers, raising profits, boosting customer loyalty, or enhancing brand awareness. Contests and Sweepstakes – A contest is a promotion where consumers compete for prizes or money on the basis of skills or ability. If Kwality walls want to improve the distribution of its ice cream, it can give 1 ice cream free for every ice cream sold. Display is a powerful tool to enhance sales. Of course the coupon should be of immediate value, instantly redeemable “on-package”, or the discount should be given at the time of purchase. It is a direct inducement that offers an extra value of incentive for the product sales force, distributors, or the ultimate consumers with the primary objective of creating an immediate sale. There are some products whose demand falls badly in a particular season. Persuading generally becomes the main promotion goals, when the product enters the growth stage of its life cycle. Definitely, sales promotion cannot be a substitute for weaknesses in marketing strategy. Through this effort push and pull strategy may be effectively introduced. Or, you could inspect your sales playbooks and follow-up guidelines to see how you could introduce more upsells into a rep’s pitching script. Sales force promotion: It involves efforts targeted towards the sales force to boost the morale of salesmen. Large scale production can be achieved only with the methods of large scale selling which is possible only through the promotional activities. The various objectives of sales promotion can be summed up as follows: Customers who are just passing by, with no intention of purchasing, would be encouraged to enter the store. To combat or offset competitors' marketing efforts. In general, long-term goals are considered communication objectives, while short-term goals are considered sales growth objectives. 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. Offer Details: The basic purpose of sales promotion is to increase the sales of a product by creating demand. These fittings make the product prominent compared to other .products, kept in normal racks. They induce buyers to purchase a new product. In the narrow sense of the term marketing communication refers to the marketing tools which are normally classified under ‘promotion’, one of the four P’s they are called ‘promo tools’ and include various forms of ‘advertising’, sales presentations and demonstrations, point of purchase displays, sales aids (catalogue, literature, coupons, free samples) and publicity programs. (ii) Customers may be encouraged to buy more quantities by offering them various incentives. To generate a favourable attitude towards the brand and to develop the awareness regarding the special attributes of the product, sales promotion devices are adopted effectively. Colgate offers 25gm extra on their 200gm pack at the same price. Supporting and supplementing the advertising and personal selling efforts. 6. Such products do not gain much advantage by these sales promotion devices. For example, leaflets providing information about a particular model of a car are kept in a car showroom. An independent panel of judges was to select the most appropriate entries for different category of awards. The following are the objectives of the sales promotion: To announce new products; Encourage customers to buy a new product, complimentary samples may be dispersed, or money and stock allowance can be awarded to business reserve and sell the product. The types of sales promotion techniques used by the company depend upon the sales promotion objectives set by the company. 200,000. To Keep the Memory Alive – One of the objectives of the sales promotion is to keep the memory of the product alive in the minds of present customers. It shall develop a strong positive impact on the purchase decision, a preference for the brand for the extra value offered. Free samples may be distributed to leading consumers who may be a source of advertisement for other prospective consumers. 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. Everything about contest, whether display or sales, should convey the idea that it is something special. Well the problem is that marketing without a clear cut strategy is like fishing without bait. Sales promotion is often used to motivate consumers to try a new product. It is usually difficult to choose a particular sales promotion tool for achieving the specific objectives. Objective # 4. They should build confidence in the mind of customer about the product through promotion and personal selling. 5. Other objectives include but are not limited to – To Create Market For New Products. In the marketing mix marketing communication is as important as other elements. For example, soya bean milk, exotic mushrooms, etc. Determining strategic sales objectives lets you examine which initiatives in the marketplace will give you the desired results. The basic purpose of sales promotion is to increase the sales of a product by creating demand. A certain sales quota is fixed for dealers, and those who exceed the quota by a specified margin or by the largest margin are awarded cash or merchandise, and often a certificate too. There could be a number of reasons for companies to go for short-term increase in sales volume. 8. The retailer is not actively involved in them. (4) To Arrest Seasonal Decline – In slack season, the promotional activities help in maintaining the sales of the product. Free samples may be distributed to leading consumers who may be a source of advertisement for other prospective consumers. Trade-oriented sales promotion programs are designed to get the trade support. Rapid growth: A decade ago, ad-to-sales promotion ratio was about 40:60, now is like 25:75 & growing. And since every supplier has his distinct looking stand, the store would lose its consistency in appeal. To introduce new products or services: Sales promotion is often used to motivate prospective consumers to try new products and services. After the sessions over, they are not demanded any more. The products are categorised and standardised to suit the specific consumer demand. Price-off coupons are printed on the pack or in store hand-outs, and the customers can use them to save substantial amounts on their next purchase of the brand. The first prize was Rs. A company’s objectives can be to enhance the attention getting power of advertising and put power in personal selling efforts of the sales force. Sales promotions ideas & examples 1. To Increase Goodwill 8. A free sample, along with a coupon of attractive value, may prove to be more effective in inducing trial of a new product by consumers and may also lead to purchase of the regular pack from the market. Sales promotion means and includes all the activities that are performed by a producer, a dealer or a businessman to increase his sales. Therefore, small businessmen try to attract the customers through persuading. The objectives are: Sales Promotion 117 i. ii. 2. To Increase Sales in Off-Seasons 14. For example, the customer could get a jigsaw puzzle inside a ‘ pack of cornflakes, or a free mug with the purchase of a health drink. 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 […] Sales promotion keeps and memory of the product alive in the minds of the customers. The objectives of the sales promotion are: Customers passing the store, who have no intention of going in, would be encouraged to enter by a sales promotion in-store, e.g. For examples, it is easy to measure the impact of discount offer on sales, but it is difficult to measure the impact of premium on the perceived value of the promoted brand. Looking at the margins, more and more retailers will tie up with the company. These objectives are attained through effective communication. To attract new customers and retain the existing ones iii. To supplement advertising and personal selling efforts. One of the most common ways to promote your store during festival time or when there is a … Sales promotion objectives are consistent with marketing and marketing communications objectives. The following are the sales promotion techniques: i. To do that, you could look into your sales reps’ commission packages and provide a heightened incentive to achieve the objective. Marketers have to consider the impact of sales promotion on brand’s image in the long term while designing sales promotion programs. Some products are seasonal in nature. In these conditions, sales promotion devices are started to counter the other sellers’ plans. Repeat purchase by customers leads to increased sales volume. Among the most relevant behavioral dimensions are purchase frequency and brand loyalty. Repeat purchase by customers, leads to increased sales volume. These new customers raise the collective sales volume. iv. Objective # 2. For example, people who buy spices rarely, or in small quantities, decide to buy more often or in larger volume if they received free recipes in return. The main objectives of the sales promotion are: 1. Through the medium of sales promotion institutions make the work of sellers easy and direct contact is established with customers. While brand awareness is a key promotional objective, a number of other important business objectives are served by promotional activities. In order to provide better facilities the organisations should concentrate on effective distribution system and should establish scientific logistic framework to satisfy the demand of the consumers. Marketing, Products, Sales Promotion, Objectives, Objectives of Sales Promotion. Display is a powerful tool to enhance sales. To add extra value to the product and develop brand franchise. 11. The main purpose of sales promotion is to introduce a new product among customers. To supplement advertising and personal selling efforts, xvi. Such promotions can be particularly useful in new markets, and can also be used to introduce a sense of urgency in consumer or the trade to buy the product now. Sales promotion is a $300 billion—and growing— industry. You might catch something, but the results are iffy at best. This objective may also be accomplished for certain consumer durable goods in case of trade segment. Contestants were required to suggest one word as a prefix or suffix to describe ‘Nescafe’. iii. The supplier provides his own personnel to explain the benefits of the displayed products to the customers. Of the many customers who buy the product very few would send the empty packet back to the supplier and redeem their gift. Deflect customers’ attention from price. The objectives for consumers may be to encourage more usage and purchases of a larger number of units and attract competitors’ brand users. Launch new product and increase trial. The reasons for the growth of sales promotion is mainly due to: 2. For such schemes to work effectively, further inducement may need to be offered such as reduced prices. Sales promotion examples are all around us. The primary objective of sales promotion is to attract buyer towards the product, inducing a prospective customer to buy the product at the point of purchase. To gain additional market share or additional revenue. Sales promotion programme should be developed to generate the confidence of the consumers regarding the claims focused. FORMS OF SALES PROMOTION. To Counter a Competitor’s Sales Promotion Device: Sales Promotion Objectives – 3 Fundamental Objectives: Informing, Persuading and Reminding, Sales Promotion Objectives – 5 Important Objectives of, Sales Promotion Objectives – Top 5 Objectives. Encourage Repeat Purchase  4. For this purpose, sales promotion plans are started. Marketers attempt to increase sales for an established brand in several ways, and sales promotion can play an important role in each. 7. Seeking more involvement of the customers especially in the contests, demonstration, participation in the events for winning the big prizes. To reduce seasonal decline, create the promotional activities help in maintaining the sales of the product in slack season, 6. These trade promotions are targeted to marketing intermediaries such as – wholesalers and retailers. money-off vouchers, trade-in allowances. 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. Displays attract consumer attention who, are passers-by, or window shopper, displays serve them as reminders, encourage unplanned purchases, and increase store traffic. Generally these displayed items generate a higher sales volume. Increasing usage rate by present customers. The promotion communicates what is required to be communicated to various sections of the trade i.e., customers, government, shareholders and dealers etc. 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. 55/- whereas the MRP is Rs. Following are the Objectives of Sales Promotion: i. 3. Trade promotion: All sales promotion efforts are targeted towards the middlemen to push the product towards the end consumer. The goal is … 3. Price increase can often have negative effect on sales. Some common examples of sales promotion marketing communications include consumer coupons, rebates, prizes, and loss leaders (or items sold at cost or a discount in order to attract business). TOS4. 6. 2. There are three main objectives of sales promotion: Informative promotion tends to convert existing needs into want. Sales Promotion describes promotional methods using special short term techniques to persuade prospect of a target market to respond or undertake certain activity. Sales promotion is often referred to by the names of “Extra Purchase-Value” (EPV) and “Below-the-line-selling”. 6. Promotional activities help maintaining the sales of the product in slack season when demand is little. To accomplish the objective, normally a combination of ‘push-pull’ strategy is used. CODES (2 days ago) An important objective of sales promotion is to encourage re-seller participation in displays and contests. It includes tools for consumer promotion, trade promotion & business & sales force promotion. The answer to the question what is sales promotion? Sales promotion is also used to generate new customers. The target group of consumers, their behavioural patterns, their attitude and perceptions should be given due importance in order to ascertain the effectiveness of the programme. These samples aim at inducing trial of the product. Sales promotion objectives could be either proactive or reactive. Customers are told new methods how to use the product and this is done through work demonstration and cinema. Therefore, people would tend to believe his statements. ‘Britannia khao, World cup jao’ was one such promotional scheme. The promotional tools should be administered and controlled in a well-planned fashion to avoid the hazards and complexities. For example, companies distribute free samples of their new product. He has to take attractive and effective steps in meeting the consumer in the market after taking decision relating to the nature of products, its price and its distribution system. 5. The satisfied consumers may generate a habit of purchasing the product in a repetitive fashion with brand preference and loyalty. Besides advertisement promotional activities help achieve this objective. Such contest should be held infrequently and not become a routine feature, which would reduce their importance and lead to decline in interest. The positive aspects and the limitations of the promotions should be scanned properly to attain the pre-set target and to fulfil the desired objectives. Persuade prospect of a product means may be created by schemes like continuity such., packaging and price, competition etc brand loyalty build demand by convincing customers to a. Of reasons for companies to go shopping for that product category entries could... The buyers stimulate sales the question what is sales promotion are as follows: image source: returnofkings.com attracts attention. And purchases of a commercial concern is to encourage repeat purchase and get the offers the. Originate from two sources — suppliers or the position inducement may need to go shopping for that category. 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