SALES

PROMOTION

PRESENTED BY : DINESH NIKAM

ROLL NO. : MT14IND013
DEPARTMENT : MECHANICAL ENGINEERING
CLASS : INDUSTRIAL ENGINEERING
INSTITUTE NAME : VNIT
ACADEMIC YEAR : 2014-2015
 PROMOTION
The short term incentive to encourage consumers to
buy the products or it is a short term tool used to
persuade the prospective buyers towards the product at
point of sales.

Promotion is a form of communication with an additional

element of pursuasion to accept ideas, products, and
services. It is third element of marketing mix.

Promotion is the spark plug of our marketing mix and an

important marketing strategy.

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 PROMOTION
Promotion is the process of marketing communication to
inform, persuade, remind and influence consumers or
users in favor of your product or service.

People must know that the right product at the right

price is available at the right place.

In marketing, effective communication is absolutely

necessary even though you have a superb product, best
package and also you offer a fair price, People will not
buy your product, if they have never heard of it and
they are simply unaware of its existence.

DINESH NIKAM SALES PROMOTION 3

 PROMOTION
Promotion persuades and convinces the buyer and
influences his/her behaviour to take the desired
action. Promotional efforts act as powerful tools of
competition providing the cutting edge of its entire
marketing program.

Promotion has been also defined as the co-

ordinated self-initiated efforts to establish channels
of information and persuasion to facilitate or faster
the sale of goods or services, of the acceptance of
ideas or point of view.

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 SALES PROMOTION
Sales promotions are the set of marketing activities
undertaken to boost sales of the product or service.

The American Marketing Association (AMA) defines

sales promotion as "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
quality.

DINESH NIKAM SALES PROMOTION 5

 SALES PROMOTION
Businesses can target sales promotions at three different
audiences: consumers, resellers, and the company's own
sales force.

Sales promotion acts as a competitive weapon by

providing an extra incentive for the target audience to
purchase or support one brand over another.

It is particularly effective in product trial and unplanned

purchases. Most marketers believe that a given product
or service has an established perceived price or value,
and they use sales promotion to change this price-value
relationship by increasing the value and/or lowering the
price.

DINESH NIKAM SALES PROMOTION 6

 SALES PROMOTION
Compared to the other components of the
marketing mix (advertising, publicity, and personal
selling), sales promotion usually operates on a
shorter time line, uses a more rational appeal,
returns a tangible or real value, fosters an
immediate sale, and contributes highly to
profitability.

Sales promotion consists of a diverse collection of

incentive tools, mostly short-term, designed to
stimulate quicker and/or greater purchase of a
particular product by consumers to the trade.

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 GROWTH OF SALES PROMTION
Sales promotion has grown substantially in recent
years. There are several reasons for this dramatic
growth in sales promotion.

First, consumers have accepted sales promotion

as part of their buying decision criteria.

Second, the increasing tendency of businesses to

focus on short-term results has helped super growth
in sales promotion, which can provide an
immediate boost in sales.

DINESH NIKAM SALES PROMOTION 8

 GROWTH OF SALES PROMTION
Third, the emergence of computer technology has
enabled manufacturers to get rapid feedback on
the results of promotions.

Finally, an increase in the size and power of retailers

has also boosted the use of sales promotion.

DINESH NIKAM SALES PROMOTION 9

 SALES PROMOTION OBJECTIVES
The main objective of sales promotion is to bring about a
change in the demand pattern of products and services.
Basically, sales promotion has specific objectives are as
follows.

It is meant to provide important marketing information to

the potential buyers.

Objective is to convince and influence the potential

buyers through persuasive measures.

Sales promotion is meant to act as a powerful tool of

competition

DINESH NIKAM SALES PROMOTION 10

 SALES PROMOTION OBJECTIVES
To introduce new products or services.

To attract new customers.

To induce existing customers to buy more.

Helps the firm to remain competitive.

To increase sales in off-seasons.

To add to the stock of the dealers.

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 SALES PROMOTION OBJECTIVES
There can be number of sales promotion objectives,
depending upon the firms 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.

DINESH NIKAM SALES PROMOTION 12

 STRENGTHS OF SALES PROMOTION
It stimulates positive attitudes towards the product.

It gives extra incentive to the customer to make a

purchase.

It gives direct inducement to take immediate

action now rather than later.

It has flexibility and it can be used at any stage of a

new product introduction

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 STRENGTHS OF SALES PROMOTION
Sales promotion are very effective:
When a new brand is introduce.

When we have to communicate a major

improvement in our product.

When we want to amplify the results of the

advertising.

When we want to increase the number of retail

stores to sell our products.

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 SALES PROMOTION TOOL
Many sales promotion tools are available to
accomplish these objectives.

The main sales promotion tools are:

CONSUMER PROMOTION.
TRADE PROMOTION.
BUSINESS PROMOTION.

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 CONSUMER PROMOTION :
The promotion planner should take into account the
type of market, sales promotion objectives,
competitive conditions, and each tools cost-
effectiveness. The main consumer promotion tools are:
Samples : offer of a free amount of a product or
service delivered door-to-door, sent in the mall,
picked up in a store, attached to another product,
or featured in an advertising offer.

Coupons : Certificates entitling the bearer to stated

saving on the purchase of a specific product:
mailed, enclosed in other products or attached to
them, or inserted in magazine and newspaper ads.
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 CONSUMER PROMOTION
Cash Refund offers (rebates) : Provide a price reduction
after purchase rather than at the retail shop: Consumer
sends a specified proof of purchase to the
manufacturer who refunds part of the purchase price
by mail.

Price Packs ( cents-off deals): Offers to consumers of

savings off the regular price of a product, flagged on
the label or package. A reduced-price pack is a single
package sold at a reduced price (such as two for the
price of one.) A banded pack is two related products
banded together (such as a toothbrush and
toothpaste).

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 CONSUMER PROMOTION
Premiums (gifts) : Merchandise offered at a relatively
low cost or free as an incentive to purchase a
particular product. A with-pack premium
accompanies the product inside or on the package.
A free in-the-mail premium is mailed to consumers
who send in a proof of purchase, such as a box top or
UPC code. A self-liquidating premium is sold below its
normal retail price to consumers who request it.

Frequency Programs: Programs providing rewards

related to the consumer's frequency and intensity in
purchasing the company's products or services.

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 CONSUMER PROMOTION
Product Warranties: Explicit or implicit promises by
sellers that the product will perform as specified or
that the seller will fix it or refund the customer's
money during a specified period.

Tie-in Promotions: Two or more brands or

companies team up on coupons, refunds, and
contests to increase pulling power.

Cross-Promotions: Using one brand to advertise

another noncompeting brand.

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 CONSUMER PROMOTION
Point-of-Purchase (P-O-P) Displays and
Demonstrations: P-O-P displays and
demonstrations take place at the point of
purchase or sale.

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 TRADE PROMOTION:
Manufacturers award money to the trade
to persuade the retailer or wholesaler to carry the
brand.

to persuade the retailer or wholesaler to carry more

units than the normal amount.

to induce retailers to promote the brand by

featuring, display, and price reductions.

to stimulate retailers and their sales clerks to push the

product.

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 TRADE PROMOTION
Manufacturers use a number of trade promotion tools.
Price-Off (off-invoice or off-list): A straight discount
off the list price on each case purchased during a
stated time period.

Allowance: An amount offered in return for the

retailer's agreeing to feature the manufacturer's
products in some way. An advertising allowance
compensates retailers for advertising the
manufacturer's product. A display allowance
compensates them for carrying a special product
display.

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 TRADE PROMOTION
Free Goods: Offers of extra cases of merchandise
to intermediaries who buy a certain quantity or
who feature a certain flavor or size.

Sales Contests: A sales contest aims at inducing

the sales force or dealers to increase their sales
results over a stated period, with prizes (money,
trips, gifts, or points) going to those who succeed.

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 TRADE PROMOTION
Specialty Advertising: Specialty advertising
consists of useful, low-cost items bearing the
company's name and address, and sometimes
an advertising message that salespeople give to
prospects and customers, Common items are
ballpoint pens, calendars, key chains, flashlights,
tote bags, and memo pads.

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 SALES PROMOTION TOOLS &
MEASUREMENT TECHNIQUES
SR NO. Tools Techniques For Measurement
Sweepstakes or lucky
Perceived value of the prize associated
1 Draw
Premiums Attractiveness, value, utilitarian or hedonic nature
2
Consumer Psychographics: (relativistic and quantitative
Price Discount
3 reasoning)
Free Sample Ability to promote product trial
4
Believability; perceived value, purchase intention, sellers
Bonus Pack
5 motive, product quantity
Buy-One-Get-One-Free Acceptability to pilling up stock, pilferage associated
6
In-store Display Retention in memory and recalling power;
7
Seasonal Offers Perceived value and hedonic nature (quality and utility)
8
Capacity of Repeatable purchases and Customer
Use of Reward cards
9 Loyalty and Price sensitivity
Free gifts Believability; perceived value, purchase intention;
10
Effort required to be put in, its worthiness and
Refund Offers
11 meaningfulness
Money Off Association between price cut, display and Features
12
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SR NO. Tools Techniques For Measurement

Demonstrations and trials Customer's perceived risk

13
Discounted Prices Association between price cut, display and Features
14
Repeatable purchases and Customer Loyalty and
frequent user programs
15 Price sensitivity
Capacity of Repeatable purchases; Loyalty and Price
loyalty programs
16 sensitivity
price packs Association between price cut, display and Features
17
Shelf-price discounts Utilitarian V/S Hedonic
18
The couponed brand's repurchase probability; actual
Coupons
19 amount of cent off offered on the MRP.
price cuts Trade-off between price and the features offered
20
Dynamic variation in response and Monetary effect
Display
21 observed Post display promotion
Dynamic variation in response and Monetary effect
Features
22 observed Post Feature promotion
Bonus Points Frequency of usage and Repeatable purchases
23
Contests Consumer risk aversion and degree of subadditivity.
24
Event Marketing self-congruity with the promotional event
25
Point-of-Sale Materials; Perceived value of the prize associated
26
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 LIMITATIONS OF SALES PROMOTION
Sales promotion have temporary and short life not
exceeding three months, Sales promotion alone cannot
build up brand loyalty.

Sales promotions are only supplementary devices to

supplement selling efforts of other promotion tools.

They are non-recurring in their use. They have seldom

reuse values.

Too many sales promotion may affect adversely the

brand image, suggesting its lack of popularity or
overstocking by a company.

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 LIMITATIONS OF SALES PROMOTION
Advertising agencies accord low status to sales
promotion and usually employ junior staff for sales
promotion so that they may be trained for more
creative jobs.

Sales promotion are ineffective:

When established brand have a declining market.
There are no product improvements.
When there is intensive competition on consumer
sales promotion.

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 DEVELOPING THE SALES PROMOTION
PROGRAM
In deciding to use a particular incentive, marketers have to
consider:
the size of the incentive (a certain minimum is necessary
if the promotion is to succeed; a higher level will
produce more sales response but at a diminishing rate)

the conditions for participation (whether to offer the

incentive to everyone or to select groups)

the duration (if the period is too short, many prospects

will not be able to take advantage of itbut if it runs too
long, it loses some of its act now force)

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 DEVELOPING THE SALES PROMOTION
PROGRAM
The distribution vehicle (each distribution method
involves a different level of reach, cost, and
impact).

The timing (annually, one-time, or some other dates

which must be communicated and coordinated
with other departments).

The total sales promotion budget (including

administrative costs and incentive costs).

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 PRETESTING THE PROGRAM
Although most sales-promotion programs are
designed on the basis of experience, savvy
marketers use pretests to determine if the tools are
appropriate, the incentive size is optimal, and the
presentation method is efficient.

Promotions usually can be tested quickly and

inexpensively and that large companies should test
alternative strategies in selected market areas with
each national promotion.

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 IMPLEMENTING AND EVALUATING
THE PROGRAM
Implementation planning must cover lead time (the
time needed to prepare the program before the
launch) and sell-in time (which begins with the
launch and ends when approximately 95 percent
of the deal merchandise is in the hands of
consumers).

After implementation, manufacturers can measure

sales-promotion effectiveness using sales data,
consumer surveys, and experiments.

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 SUPPORT\Aaj se Recharge Nahin, FreeCharge.mp4

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 REFERENCES
Kotler, Philip, Keller, Kevin Lane, Koshy, Abrahan, & Jha,
Mithileshwar. (2009). Marketing Management (13th ed.). Dorling
Kindersley: pearson education in south Asia.
Sherlekar, S.A. (2006). Marketing Management (13th ed.).
mumbai: himalaya publishing house pvt.ltd.
Williams, Oyedapo, Babatunde, Akinlabi, & Jeleel, Sufian. (2012).
The impact of sales promotion on organization effectiveness in
Nigerian manufacturing industry. Universal Journal of Marketing
and Business Research, 1(4), 123-131.
Gupta, Madhurima, & Singh, Deepali. (2013). A Perceptual Study
of Relative Effectiveness of Tools and Techniques Used in Sales
Promotion. American International Journal of Research in
Humanities, Arts and Social Sciences, 4(1), 30-35.
< http://www.referenceforbusiness.com/small/Qu-SmSal/es-
Promotion.htm>
< http://www.yourarticlelibrary.com/sales/reasons-for-growth-of-
sales-promotion-with-advantages >

DINESH NIKAM SALES PROMOTION 34