Sales promotion, types, features

1. RAHUL S
No. 4
S2.MBA

2.  Sales promotion is the process of persuading a potential
customer to buy the product.
 Sales promotions targeted at the consumer are called consumer
sales promotions.
 Sales promotions targeted at retailers and wholesale are called
trade sales promotions

3.  According to A.H.R. Delens: “Sales promotion means any steps that are
taken for the purpose of obtaining an increasing sale. Often this term refers specially
to selling efforts that are designed to supplement personal selling and advertising and
by co-ordination helps them to becomemoreeffective.”
 ‘’Those marketing activities, other than personal selling, advertising, and publicity that
stimulate consumer purchasing and dealing effectiveness, such as displays, shows and
exhibitions, demonstration and various non- recurrent efforts not in the ordinary
routine is known as sales promotion.”-American marketing
Association’’.

4. The basic and broad objectives of sales promotion
are:
 1.To Introduce New Products
 2.To attract New Customers
 3.To Induce Present Customers to Repeat Purchase More
 4.To Help the Firm RemainCompetitive
 5.To Increase Sales during Off Seasons
 7.To increase Loyalty.

5.  1.Increasesin sales :-
 2. Regular sales ofseasonal product :-
 3. Improve effectiveness of advertisement and personalselling :-
 4. Cooperation frommiddlemen :-
 5. Demand for product &services :-
 6. Able to capture newmarket :-
 7. Increasein goodwill :-
 8. Effective steps to face the competition:-

6. 1. Consumer sales promotions
 Any sales promotion activity that we do keeping the end consumer in mind is known as
consumersalespromotions.
 Example – if an e-commerce website gives 10% discount on its products, then it wants the
consumers to make the best of this deal. An existing customer might be asked to use a
Scratchcard so that he receives a gift. This is aconsumer focused promotional activity and
hencecanbecalledasconsumersales promotions.

7. 2. Trade Salespromotions
 If the promotional activities are focused on dealers, distributors or agents, then it is
known as trade promotions. There is a lot of competition in any field. And
in channel sales, to get the products moving and to motivate the dealer to perform
better, trade discounts are given.
 Example – we are a dealer for Televisions. Now sony comes and tells we, we will be
given 5% discount if we cross a sale of 100 televisions. Naturally, we will be very
motivated because 5% in television sales is huge. Plus selling sony TV’s is easy because
it is already a brand. Thus, we divert all potential customers to Sony Televisions so that
we can achieve the target.

9.  SAMPLING - Free distribution of a product to
obtain future sales
 Higher response rate than other forms of promotion
 Good for promoting new or unusual products
 Relatively expensive form of promotion

10.  COUPONS
 coupon is a ticket or document that can be redeemed
for a financial discount or rebate when purchasing
a product.
 Quite commonly used to motivate people to purchase
when they think the price is high or it can be incentive
to buy the product above the competitors.
Domino’s, Pizza hut and McDonalds very prominently
use coupons in their marketing. If we have their
coupon in hand, we get a discount of X amount on the
purchase.
.

11.  Premiums - Items given free or at reduced cost
with purchases of other products
 Premiums are promotional items —
toys, collectables, souvenirs and household
products — that are linked to a product
 Free premiums are sales promotions that
involve the consumer purchasing a product in
order to receive a free gift or reward.

12. Contestsand Sweepstakes
Contest - Sales promotion technique that requires entrants
to complete a task for the chance to win a prize. . Contests
can be as simple as winning a gift through a scratch card,
or it can be an in house game in a retail showroom or it
can be an online contest for which users have to enter
their information
Sweepstakes - Sales promotion technique in which prize
winners are selected by chance. Sweepstakes began as a
form of lottery that were tied to products sold.

13.  REFUNDS & REBATES
 refunds are a marketing tactic when we get an amount
refunded to us based on an action we have taken.
 In a Refund, the customer initially has to pay the whole
price of the product which is later on repaid to him.
 For example – if we bring the parking ticket to the
showroom, our parking amount will be refunded by the
store. Such refunds make the customer excited to visit a
store.
 In a Rebate, only a part of the total amount paid is repaid
back to the customer.
 In rebates, we fill forms while checking out of stores. And if
we have won the rebate, we will have to mail our details to
the company and the company will refund the rebate
amount in our bank or via a paypal account.

14.  Bonus pack - Specially packaged item that gives the
purchaser a larger quantity at the regular price.
 When an additional or extra number of items are
placed in a special product package, it is called
a bonus pack.
 Typical bonuses range from 20 percent to 100
percent of the normal number of units in a
package. A 30 percent bonus is the most common.

15.  Price off deals
 Price discounts or price-off deals: Price
deals are probably the most commonly used
promotional techniques. A price deal for a
customer means a reduction in theprice of the
promoted product and the consumer saves
money on purchase

16.  Loyaltyprograms
A customer loyalty program is a rewards program
offered by a company to customers who frequently
make purchases. A loyalty program may give a
customer free merchandise, rewards, coupons, or
even advance released products.
 For $99 a year, Amazon Prime users get free, two-
day shipping on millions of products with no
minimum purchase, among other benefits.
 It provides enough value to frequent shoppers for
them to feel like it's really benefitting them.

17. Exhibitions
 More commonly used in Food, Jewelry, Clothing,
Chemicals and similar such industries where sellers
want to showcase the products they have to their
buyers. These buyers might be consumers or they may
be industrial buyers. An exhibition generally consists of
one player who is exhibiting his goods. However, it can
also be a combination of players who are all there to
showcase their wares.

18.  Trade Shows
 While exhibitions are targeted
towards individual buyers, Trade shows are
targeted towards resellers, dealers, distributors
and bulk buyers.
 A trade show is typically a display point for all top
companies within an industry. These companies
are there to compete and grab the maximum
eyeballs of retailers, dealers and distributors.
 While Exhibitions are concentrated mostly on
individual buyers, trade shows are concentrated
towards bulk buyers.

19.  Trade allowances - Special financial incentives
offered to wholesalers and retailers that
purchase or promote specific products
 May give a discount on goods or include off-invoice
allowances

20.  Point-of-purchase (POP) advertising - Display
or other promotion located near the site of the
actual buying decision
20

21. Discounts
 The most common type of sales promotions is consumer
discounts or trade discounts. Be it E-commerce stores, retail
stores or anything else. The reason discount is most used is
because it actually works!
 If there is a 10% discount on the product for the consumer,
then it is known as consumer discount. However, if there is
a 10% discount to the dealer when he is purchasing from
the company, it is known as trade discount.

22. Exchange offers
 Exchange offers are quite commonly used all across the
world and used strongly in festive season when sales will
be more and people are in a purchasing mood. In exchange
offer, we can exchange an old product for a new product.
we will receive a discount based on the valuation of our old
product.
 So, if we had an old washing machine at home and there
was an Exchange offer in the market, then we will receive
an X amount for the washing machine which is decided by
the parent company or the retailer. This X amount will be
deducted from our final payable amount and will be
reduced under the header of “Exchange offer reimbursed”.

23. Free trial
 Chances are, we have come across several softwares or
online programs which offer a free trial to us before
purchase the product. Shareware programs are also a
kind of free trial programs where we can use the
product for some time but later on have to purchase
the product to use it completely.
 This is done so that the customer gets a chance to trial
run the product before he pays for the product in full.
Programs like Adobe Photoshop, Microsoft office 365
and others are known to give free trial programs of
upto a month so that the customer can know more
about the product, he can try it and then purchase.

25. 