Monday, January 26, 2015

Sales Promotion Objectives and Methods

20 Objectives of Sale Promotion:
Sales promotion helps marketers realize a variety of objectives as a strong method of sales promotion with a capability to complement and supplement the advertising function of marketing
sales promotion object-method

These objectives could relate to the promotion of sales in general, or to a specific activity at a particular level i.e. consumer, dealer or sales-force. Some of the commonly attempted objectives are to:
  • Increase sales ( in general, and focusing on new uses, increased usage, upgrading unit of purchase, winning sales of fading brand etc.)
  • Make the sales of slow-moving products faster.
  • Stabilize a fluctuating sales pattern.
  • Identify and attract new customers.
  • Launch a new product quickly.
  • Educate customers regarding product improvements.
  • Reduce the perception of risk associated with the purchase of a product.
  • Motivate dealers to stock and sell more (including complete product line).
  • Attract dealers to participate in manufacturer’s dealer display and sales contests.
  • Obtain more and better shelf space and displays.
  • Bring more customers to dealer stores.
  • Make goods faster through dealers.
  • Improve manufacturer-dealer relationship.
  • Motivate sales-force to take the achievement higher than targets.
  • Attract sales force to give desired emphasis on new accounts, latent accounts, new products, and difficult territories.
  • Reward sales force for active market surveillance and for rendering superior customer service.
  • Put power into the sales-presentation.
  • Counter competitors sales-promotion and marketing efforts.
  • Provide punch to the company’s advertising efforts.
  • Build goodwill.
You may use anyone or a combination of the above objectives in varying form to suit the product-market needs of your product. What is of significance is that the promotion and marketing objectives pursued by you.

15 Methods of Sales Promotion:
Depending upon the creativity level of their sponsors, many methods of sales promotion are used by marketers, their variety seems very large. I refer here to some of the most commonly used methods of promotion. These ares-
  1. Price-off offers- Offering product at lower than the normal price.
  2. Quantity-off offers- Offering more quantity of the same product at no extra cost or with a very nominal increase in the price of the larger quantity packs.
  3. Premium- Offer of an article of merchandise as an incentive in order to sell product or service. Its forms are:
    • Packaged Premium- When the incentive article is packed (inserted) inside the package of the product.
    • Banded Premium- Where the premium article is banded to the package of the product say with cello tape etc.
    • Over-the-counter (OTC) premium- When the premium article is neither inserted inside nor banded to the product package but is given away to the consumer over the counter along with the product package.
    • Container Premium- When the product itself is placed in an attractive and reusable container which serves as a gift?
    • Self-liquidating Premiums- Where the consumer usually is asked to pay a specified amount to liquidate or offset a part or full cost of the premium article or the scheme administration costs.
    • Personality Premium- Where the consumer is required to redeem a specified proof-of-purchase for the premium article. Proof-of-purchase may be labels, pack tops, bottle tops, corks, etc.
  4. Coupons- When the consumer is entitled to redeem a specific standard certificate for a product/article free or in part payment. Coupons are used by both the manufacturer and the dealers for sales promotion. Coupons may be distributed by mail, by media advertisements, door-to-door, inside product package or by dealers on purchase.
  5. Refund offers- Offer of a refund of money to consumer for mailing in a proof-of-purchase of a particular product(s).
  6. Trading stamps- Organized by Trading Stamp companies or large retailers. Trading stamps are a kind of discount coupons offered to consumers linked with the quantum of their purchase. On enough accumulation these are redeemable for various kinds of merchandise.
  7. Trade Allowances- These are temporary price reductions/reimbursement of expenses incurred by dealers-in full or in part, its varied types are as under:
·        Trade or buying allowance- Offer of price reduction on purchase of specified quantity of a product.
·        Buy-back allowance- A secondary incentive which offers a certain sum of money to trade for each additional unit bought over and above the deal.
·        Count and recount allowance- When a specific amount of money is offered after ascertaining the number of units sold during a specified period during a specified period.
·        Merchandise (display) allowance- An allowance to trade for providing desired sales promotion and product displays.
·        Co-operative advertising & promotion allowance- Wherein a manufacture shares at an agreed rate the advertising and promotional cost incurred by the dealer in the promotion of manufacturer’s product.
  1. Consumer contests and Lucky draws- Where individuals are invited to compete on the basis of creative skills. The latter is based on the chance or luck factor.
  2. Dealer stock Display contests- It is a type of point-of-purchase advertising which uses the show windows of the dealers for providing exposure to the sponsor’s products. Dealers participating enthusiastically and creatively are awarded.
  3. Dealer Sales contests- Where participating dealers are invited to compete in terms of the sales performance.
  4. Discounts- Other than normal trade and cash discounts.
  5. Dealer gifts- Offer of useful articles and attractive gifts to dealers for his personal, family or office use.
  6. Point-of-Purchase- Those special displays, racks, banners, exhibits, that are placed in the retail store to support the sale of a brand.
  7. Merchandise Deals- Wherein additional quantity of the same or the same manufacturer’s another product is offered to trade. May be offered jointly by non-competing manufacturers.
  8. Premium or Push money- When an additional compensation is offered to trade or sales-force for pushing additionally a specific product or product line.

As mentioned above, the accomplishments of the desired promotion and marketing objectives ultimately depend on the extent of the desired response received from consumers, dealers and members of the sales force. In terms of the impact desired, the variety of sales promotion schemes offered are grouped into two categories: One, aimed at producing immediate impact, and the other delayed impact i.e. carrying on the impact over a period of time. Immediate impact schemes are those schemes where the consumer, dealer or salesperson gets the incentive on first contact, purchase or on performing a one-time act. On the other hand, under the delayed impact schemes, the consumer, dealer or sales force is called upon to comply with the scheme over a period of time before receiving the full benefit of the scheme. Price discounts, free samples or large quantity packs are the popular examples of immediate impact schemes, whereas coupons, trading stamps and contests are examples of delayed impact category of sales promotion schemes.
Location: United States


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