Purpose of Sales Promotion:

Customers are more selective in; their buying choices and a good promotional
programme is needed to reach them. The main purpose of sales promotion is to
boost sales of a product by creating demand, that is, both consumer demand as
well as trade demand. It improves the performance of middlemen and acts as a
supplement to advertising and personal selling.

It helps in achieving the following purposes:

1. The basic purpose of promotion is to disseminate information to the potential

customers.

2. Sellers use incentive-type promotions to attract new customers, to reward loyal

customers and to increase the repurchase rates of occasional users.

3. To encourage the customers to try a new product. An interesting example: the

Brooke Bond Tea of India used to distribute free tea to every household during
1930s, in order to promote tea drinking habits among the people of Chennai.

4. Sales promotions yield faster responses in sales than advertising.

5. Sales promotion is considered as a special selling effort to accelerate sales.

6. Brand switchers are primarily looking for low price, good value and premiums.
Sales promotions are likely to turn them into loyal brand users.

7. It helps to defeat competitors promotional activities.

Importance of Sales Promotion:

In recent years, the importance of sales promotion has increased. The amount
spent on sales promotion now equals the amount spent on advertising. The sales
promotion increase is due to the changes in the marketing environment. The
importance of sales promotion increase is due to the thinking of new ideas for
creating a favourable condition of selling, promoting sales and future expansion
of sales.

It is a part of marketing strategy. It is essential for the survival of a manufacturer.

For the birth of new product or new brand, sales promotion is very important.
Advertising reaches the customers at their homes, or at the place of business or
in their travels, whereas sales promotional devices inform, remind or stimulate
the buyers at the point of purchase.

Hence it is the only device which is available to the consumers at the point of
purchase. A good sales promotional programme will remove the consumers
dissatisfaction with respect to retail selling. Sales promotion increases as a result
of the growing use of self-service and other sales methods.

In India lakhs of rupees are now being spent on sales promotional activities.
Now-a-days it becomes a necessity and it is not a luxury. All the marketing
devices, by which demand for a product is stimulated and re-stimulated are
known as sales promotion.

Reasons for the Rapid Growth of Sales Promotion:

This is due to several factors which contribute to the rapid growth of sales
promotion, particularly in consumer markets.

They are internal and external factors:

I. Internal Factors:

(a) Promotion is accepted by top management as an effective sales tool. Now-a-

days top level managers realize and accept that sales promotion effects sales. It
will increase the sales volume.
(b) Product managers are qualified to use sales promotion tools. Product
managers realize the importance of sales promotion. Hence they practise sales
promotion tools effectively.

(c) It is the duty of the product managers to increase the sales volume, and this
attracts the sales promotion tools to achieve the aimed objective.

II. External Factors:

(a) There is widespread use of branding. Promotional activities are essential as

they are more practical than advertising.

(b) Competitors have become promotional-minded. There is cut-throat

competition, and the market is flooded with numerous products. Hence,
promotional activities are essential.

(c) During the period of inflation and recession, the consumers are more deal-
oriented and the promotional techniques facilitate sales.

(d) The present stage of trade demands more deals from manufacturers.

Purpose of Sales Promotion:

Customers are more selective in; their buying choices and a good promotional
programme is needed to reach them. The main purpose of sales promotion is to
boost sales of a product by creating demand, that is, both consumer demand as
well as trade demand. It improves the performance of middlemen and acts as a
supplement to advertising and personal selling.

It helps in achieving the following purposes:

1. The basic purpose of promotion is to disseminate information to the potential

customers.
2. Sellers use incentive-type promotions to attract new customers, to reward loyal
customers and to increase the repurchase rates of occasional users.

3. To encourage the customers to try a new product. An interesting example: the

Brooke Bond Tea of India used to distribute free tea to every household during
1930s, in order to promote tea drinking habits among the people of Chennai.

4. Sales promotions yield faster responses in sales than advertising.

5. Sales promotion is considered as a special selling effort to accelerate sales.

6. Brand switchers are primarily looking for low price, good value and premiums.
Sales promotions are likely to turn them into loyal brand users.

7. It helps to defeat competitors promotional activities.

Sales Promotion is one such tool; Advertising, Personal Selling, Direct Marketing and
Public Relations are the rest of them. Each one has a specific purpose to serve, objective
to accomplish. They are used at different points in time during a products life cycle.

In order to increase their sales, trial or usage of a product or service, organizations make
use of initiatives such as Sales Promotion. It is essentially an inducement, a direct and
immediate one that prompts the customer/ dealer to buy the product. It does so by
adding extra value in the product than what is actually available at its normal price. The
offers are made at such places and usually at the time when the buying decisions are
being made. Sales promotion can hence be referred to as activities that offer incentive
and create interest. Generally, these activities are events that are short-term in nature.
Some of the objectives of sales promotion are to motivate and influence the customers
purchase, stimulate particular behavioral reactions from them.

In the light of the present competitive market conditions, sales promotions are very
common and are increasing at a very fast pace. In spite of the directness of Sales
promotion, it is considered to be fairly complicated. It is also known to be a useful tool of
marketing with numerous possibilities of creativity limited only by the promotion
planners imagination. Some common names by which Sales promotion is often referred
to are extra purchase value and below-the-line selling. In other words, Sales Promotion
can also be defined as techniques and incentives directed towards traders, dealers and
customers with a view to induce immediate or short-term sales effects.

The committee on definitions of the American Marketing Association (AMA) defines sales
promotion as follows:

In a specific sense, sales promotion includes those sales activities that supplement both
personal selling and advertising, and coordinate them and make them effective, such as
displays, shows, demonstrations and other non-recurrent selling efforts not in the
ordinary routine.

The AMA, in its Web-based "Dictionary of Marketing Terms," defines sales promotion as
follows.

"Media and non-media marketing pressure applied for a predetermined, limited period of
time in order to stimulate trial, increase consumer demand, or improve product
availability."

Some other definitions of sales promotion are:

"Sales promotion means any steps that are taken for the purpose of obtaining or
increasing sales."(A. H. R. Delons)

"Muddled misused misunderstood that is sales promotion.(W. Q. Kelly) According to him,

the field of sales promotion as a marketing activity, is still vaguely defined and
organized.

Examples of sales promotions can be seen anywhere and everywhere. A freestanding

insert in the Sunday newspaper may contain a coupon offering 10% off Caf Coffee Day
coffee. E-mail from ebay.com may offer free shipping on your next purchase over Rs.
5000. A point-of-purchase display in the local market tempts impulse buyers with a stack
of Real Fruit Juice. An executive may buy a new mobile phone and get an accessory free.
Hence, we can summarize that strong and early responses can be stimulated through
Sales Promotion.

Figure 3: Click on the links below to view the examples of Sales Promotion

Source: http://punjab.mallsmarket.com/sites/default/files/photos/deals/TheBodyShop_D
iwaliFlashSale_20Off_3_5Nov2012.jpg

Source: http://english.people.com.cn/200512/28/images/1227_B23.jpg

As shown in the figures above, Sales Promotion consists of offers such as a Festive
Season Discount. As in our example, a bag is being offered free of cost on purchase of
Wrangler goods worth Rs. 2499. It could also be a sale for a fixed period of time on
selected items or all items depending upon the terms and conditions. Such promotion
lures customers by offering products free or at reduced prices. There are various other
forms of promotional offers.

Sales Promotions consists of two kinds of blends. Both the blends are related to the
Channels of Distribution.
 Pull Blend: As shown in the figure below, the aim here is to make use of such
sales efforts and promotional campaigns that will pull the product from the
manufacturer without having to spend much on advertising and consumer
promotion. Impersonal sales efforts are of great importance here. Organizations
that make use of this strategy want the retailers and resellers to demand their
products. They expect the customers to seek their brand actively. The customers
demand the product from the retailer who in turn demands the same from
wholesaler, he in turn asks for the products from the manufacturer since the
commodity is in great demand.

Push Blend: Here, the emphasis is laid on personal selling. Hence, the firms following
such a strategy need to have a sound sales force at the distributor as well as the dealer
level. This strategy pushes the product through the channel of distribution. As shown in
the figure, the manufacturer pushes the product down to the retailer level by offering
certain incentives to stock his goods. The sales force of the retailer who are trained push
the product down to the customers by informing and convincing them about the benefits
and deals being offered with the product. The customers make purchase decisions on the
spot with the help of the sales people.

Figure 4: Marketing Made Simple

Value addition 1: Image

Sales Promotion Push Pull Strategy

Source:

http://www.bbmms.org/wordpress/wp-
content/uploads/2010/01/marketingsale029.gif
 Value Addition 2: Pause and Think

Enhance Brand Image

AKAI is well-known and well-established Japanese company that manufactures home

appliances, audio and video equipment and televisions. It became a market leader in
India in the TV industry. Its secret was its value-added sales promotion techniques. It
allowed its customers to exchange their old black and white TV sets with new color TV
sets, that too at a discount. It even offered free watches, calculators and many other
free gifts. AKAIs sales promotion strategy made it a popular choice among
customers. Its competitors like Sony, were never able to offer similar promotions.

Source: Kotler, Philip, Marketing Management, 11th ed., Pearson Education, Inc., New

Sales Promotion: Meaning, Definition,

Objectives and Importance of Sales
Promotion
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Sales Promotion: Meaning, Definition, Objectives and Importance of Sales

Promotion!
Meaning and Definition:
Sales promotion refers to those marketing activities that stimulate consumer
shows and expositions.
Purchasing and dealer effectiveness such as displays, demonstration and various
non- recurrent selling efforts not in the ordinary routine. 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 become more effective.

In the words of Roger A. Strong, Sales promotion includes all forms of

sponsored communication apart from activities associated with personal selling.
It, thus includes trade shows and exhibits, combining, sampling, premiums, trade,
allowances, sales and dealer incentives, set of packs, consumer education and
demonstration activities, rebates, bonus, packs, point of purchase material and
direct mail.

Objectives of Sales Promotion:

Sales promotion is a vital bridge or a connecting link between personal selling
and advertising.

Sales promotion activities are undertaken to achieve the following

objectives:
1. To increase sales by publicity through the media which are complementary to
press and poster advertising

2. To disseminate information through salesmen, dealers etc., so as to ensure the

product getting into satisfactory use by the ultimate consumers.

3. To stimulate customers to make purchases at the point of purchase.

4. To prompt existing customers to buy more.

5. To introduce new products

6. To attract new customers.

7. To meet competition from others effectively.

8. To check seasonal decline in the volume of sales.

Importance of Sales Promotion:

The importance of sales promotion has increased tremendously in the modern
times. Lakhs of rupees are being spent on sales promotional activities to attract
the consumers in our country and also in other countries of the world

Some large companies have also begun to appoint sales promotion managers to
handle miscellaneous promotional tools. All these facts show that the importance
of sales promotion activities is increasing at a faster rate.