sales promotion tools and techniques

Some sectors offer instant draws and assured gifts to their customers when they make purchases. Business and Sales force promotion tools– These are directed towards the company’s sales force so that they put in extra effort in making sales. x. These are all different approaches to offer immediate reward to the consumer at the time of purchase. Price Reductions on some specific occasions e.g., 20% to 30% discount on all products of Gandhi Ashram on Gandhi Jayanti. Essays, Research Papers and Articles on Business Management, Sales Promotion: Meaning, Merits, Limitations and Methods, Sales Promotion: Concept, Objectives, Types, Tools, Techniques, Advantages and Disadvantages, Essay on Sales Promotion: Top 4 Essays | Functions | Marketing Management, Advantages and Disadvantages of Franchising. Almost all promotions make use of one or more of these tools, alone or in some carefully developed combination. In this sales promotion technique, an additional amount of the product is offered without any additional cost, as an incentive to purchase a minimum quantity. Discount – This refers to reduction of certain percentage of price from list price for a limited period of time. Adv. viii. In the modern age of competition, it is an important purpose of promotion to help in stabilising sales volume by reassuring the customers about the quality and price of the product. Sales Promotion Contest: – Sales force contests are announced to stimulate company salesman to redouble their interest and efforts over a stated period with prizes to be the top performer. For example, companies distribute free samples of their new product. To reduce the perception of risk associated with the purchase of a product. This dampens the competition for a while. LIST OF TOOLS• Free samples: These are distributed to attract consumers to try out a new product and thereby create new customers. A sweepstakes is a random drawing and is sometimes called a chance contest. iv. 2. For examples, Big Bazaar issues coupons for selected items in their weekly flyers that are distributed via mail or along with newspapers. These objectives are for both marketers and traders. Premiums are of different types like packed premium, banded premium, personality premium and container premium. In this method of sales promotion, customers take part in small competitions on the basis of their creative and analytical skills. Pack premiums on packs, as bonus packs. Sales promotion essentials : the 10 basic sales promotion techniques-- and how to use them. Only products which are lacking in quality, or are not likely to be favoured by consumers, require sales promotion efforts. POP can be very effective if done properly i.e., using better quality POP materials instead of cheap paper signs or ill- conceived displays. Depending on the consumers’ value perception of the premium, the consumers may even be agreeable to purchase the product at a slightly high total price for the combination of the product and the premium. 5. If advertising is related to “buy our product” then sales promotion is the representation of “buy the product now”. At these fairs and exhibitions, business firms are allotted stalls wherein they display their products and attract the customers through gifts, special concessions and free demonstrations of technical and specialty products. It is a good device for creating new user and to strengthen the brand loyalty. The purpose is to increase customer loyalty. For instance, Taj Mahal tea leaves, Ariel detergent powder, Bournvita, Kissan jams, etc. A discount coupon is a certificate that entitles its holder to a specified saving on the purchase of a specified product. Buying allowance is a temporary price reduction offered to the retailer for purchasing specific quantity/units of the product. POP material is often tied in with television or print messages to increase effectiveness. a. In-Pack, On-Pack, and Container Premiums: These various terms for premiums are primarily used to distinguish the difference in methods of rewarding the consumers. Each pack of flour contained a coupon with certain half-word or one-third word printed on it. For example- few car retailers offer free servicing for the first 6 months if certain car components are damaged or are under performing. Conventions displaying their wares to large audiences at relatively low cost. A coupon is a certificate that offers a price reduction for some specified items to the holder. To decide which entries are first second, or third, etc., an expert or a panel of experts examines the entries and judges the winning ones. For instance, in case the manufacturer plans to distribute free samples of a product, it can cost far more than the total money spent by the manufacturer for the prizes. iv. The prizes may be gold or silver jewellery, hefty sums of money, cars, two-wheeler autos, colour televisions, computers, music systems, free air tickets, stay in five star hotels, holiday in health resorts, and anything else depending on the imagination of the marketer. 3. The basic purpose of sales promotion is to increase the sales of a product by creating demand. When consumers do not perceive any meaningful persuasive differentiation between brands and the market is competitive, such promotions work very well. But many retailers do not patronise this method because it involves financial and accounting problems for them. It is possible that a customer using a particular brand, may buy another because the other brand is promoted in an effective manner. We'll cover promotions to increase sales, to encourage repeat business, and to boost brand awareness. are made available in special containers which could be reused in kitchens after the product has been consumed. (iv) Drives customer decision making – Limited availability offers can create a sense of scarcity in your customers that get them to act. Such contests are held through radio, T.V., newspapers, magazines, etc. Several types of coupons are in use viz., (a) Coupon with a rub-off spot, (b) Instant coupons, easily detachable to buy immediate package, and (c) Special Price Coupons. Consumer sends proof of purchase and manufacturer sends the refund part of the purchase price to the consumer. Among all the sales promotional devices, probably the most exciting and highly rewarding are the contests and sweepstakes. How to choose your sales tools. Reputed retail stores, use timely sales promotion tactics like sales during off­ seasons two clearance or special prices and incentives (like buy two get one- free, credit cards accepted during sales), samples for introducing new products (to sell their own brand of tea), Gifts based on a number of visits, point of purchase displays, or visiting celebrities. While some of the techniques of sales promotion do in fact advertise a product or … Promotion can be launched directed at consumer or trade. Learn about:- 1. For example, during off season (winter), ceiling fans, coolers and refrigerators may be offered at 20 to 30% off price. Advertising. A contest is based on testing the skill or ability and may not involve the proof-of-purchase (this is called a “consideration”) to enter the contests. This helps in launching the new product. Akai offered a 14″ colour television on purchase of 21″ colour television. This would help to load-up the consumer. e. Samples given to professionals to recommended product; e.g., doctors by pharma Cos. 2. Travel Agents and Sellers . Share Your PDF File Sales promotions are those activities, other than advertising and personal selling that stimulate market demand for products. Consumer-oriented Promotion Tools B. Trade-oriented Sales Promotion. The duration of contests and sweepstakes varies considerably, depending on the objectives set for sales promotion. 1. In case of bonus pack offer, an additional quantity of the same product is offered free when the standard pack size of the product is purchased at the regular price. A BIG discount/giveaway/prize – depending on your business type and audience, you could cut your prices or give away goods. Major Sales Promotion Techniques Companies use various sales promotion techniques to promote their products. Refunds and Rebate – An offer by manufacturer to give back certain amount of money to consumer. xiii. https://www.slideshare.net/.../techniques-of-sales-promotion This is an example of a very clever sales promotion of a product, which is considered a commodity. Disclaimer Copyright, Share Your Knowledge (iii) Creates upsell and cross sell opportunities – When you package or bundle products around a theme or solution, you can often generate sales of multiple items rather than a single item. These samples may be distributed door-to-door (through personal selling) or retail stores. Due to the adversity of markets, the importance of sales promotion has increased tremendously. The basic purpose is to stimulate on the spot buying by prospective customers through short-term incentives. (i) Creates differentiation – When you launch a new product or ask customers to engage with your business in a new way, this sets you apart from your competition. Price packs (cents-off deals) – Offers consumers saving off the regular price of the product, directly cuts price on the label, or combination of two products (tooth paste and tooth brush). Patronage reward – Cash or gift, for the regular use of a particular product of the company like privilege card membership given by the company to the regular user of the products. Khadi Gram Udyog offers rebates on Khadi cloth and readymades to coincide with the month of Gandhi Jayanti every year. Types of Programs 7. BDM's embody the old school face-to-face methods of sales promotion in contrast to Internet marketing and other less personal modern techniques. If you are trying to start-up a business or already own a business, it is vitally important that you start with a good marketing strategy and use continuous marketing even after getting established. Industrial shows and annual industrial exhibition, exhibition of home appliances, consumer goods or gym equipment, etc. Sales promotion acts as a bridge between advertising and personal selling. When consumers increase purchase quantity, they carry more stocks of the product and stay out of markets. The prizes, depending on the announced number of prizes, are declared. Sales Promotion is one such strategy which is used by marketers to attract new & prospective customers towards their products and retain the existing ones. Image Guidelines 4. So, the methods of sales promotion can be divided in three groups as consumer, promotion, middlemen/trade promotion and sales-force promotion. Dealers promotion methods are those which encourage dealers and distributors to buy and resell more and more quantity of the product. It is also different from advertising. Sales promotion tools used for consumer-oriented promotion are – Free Samples: Distributing free samples increases brand awareness and triggers the psychology of ownership where the person … 8. Tools and Programmes for Dealers/Distributors Sales Promotion: There is provision of free display of material either at the point of purchase (POP) or at the point of sale (POS), depending on one’s view point. Producers/retailers may promise free service to consumers for a specified period of time after sales. A lottery prize is decided on the basis of chance and requires a “consideration” for entry that may be proof-of-purchase of ticket or a product. One of the most crucial challenges for any type of business is to collect an in-depth understanding of the market. Welcome to EconomicsDiscussion.net! These tools are unique in their way and directed differently to these three groups. Manufacturers devise the strategy such that the customer qualifies for a refund only when he makes multiple purchases. programme. This means a refund is repayment of total money paid for purchase, while the rebate represents repayment of only of part of the money paid for purchase. Content Guidelines 2. Under this, the product is offered at a price lower than the normal price. A gift for an order is a premium given to the retailer for buying certain quantities of goods or for special display done by the retailer. To add an element of extreme urgency and speed up the response, early bird prizes are announced for the first 25 to 50 or 100 entries. This is where the different types of marketing analysis methods, techniques, and tools come to help.. The types of sales promotion techniques used by the company depend upon the sales promotion objectives set by the company. Promotion mix is the name given to the combination of techniques used in communicating with customers. Under these promotions… To make the contest or sweepstakes more tempting, there may be more than one winner of first prize (such as 10 first prizes for ten lucky winners). Free-in-mail premiums are unique because the promotion objectives may be quite different. Community smaller than society. Their interest is not tied up with any brand or manufacturer, unless there has been an agreement with the marketer of some co-operative venture. On one coupon would be ‘SA’ the other two coupons should have ‘NT’ and ‘RO’, thereby completing the word Santro and entitling the consumer to win a Santro car by submitting the three coupons. Special Rebate 9. The promotion said, “buy any scooter, scratch a card, and win a sure prize”. After sale service free of cost during certain period. Sales promotion devices at the point of purchase inform, remind, and stimulate buyers to purchase products. Dealer sales promotion provides the selling devices. Inducing retailers to promote the brand by local advertising and POP display. 30,000 in 12 equal instalments of 2,500 each by post-dated cheques and get a bike on the spot.” This tool of promotion misleads the customers and so should be avoided by the marketers. For example, if a customer buys toothpaste, he gets a toothbrush free. 1) Manufacturers organise sales contests wherein the winners are rewarded by way of money, incentives, trips, gifts, etc. a. It is a kind of offer of a refund of money to customer for mailing in a proof of purchase of a particular product, it induce trial from primary users and motivate several product purchase. ‘Readers Digest’ regularly makes this offer. Sales promotion has two components consumer promotion and trade promotion : Consumer promotion is for the common customer, this promotion is supported by advertisements, publicity, direct selling etc. Sales promotion tools vary in their specific objectives. These include greetings or thanks in newspapers, donating space for noble causes, offer of Privileged Citizen Card, etc. These are at the heart of sales promotion. Sales promotion activities are more common for consumer goods marketing than for industrial goods. Tools and Programmes for Consumer Sales Promotion: Also known as consumer sample or free samples and given to consumers to introduce a new product or to expand the market. This is useful for drawing attention to product improvement. Before looking at the tools and techniques of (CSP) let us look at some of its specific goals: a) Encourage trial: Most new products fail because too few people try the product or because trial does not lead to repeat purchase. A price deal for customers means a reduction in the price of promoted product and the customer saves money on purchase. Coupons originating from the manufacturers are redeemable at any retail shop that carries the promoted product. Concept and Nature of Sales Promotion 2. Retailers obtain gifts only when they buy specific quantities of goods or fulfill a given sales target. The retailers serve as the agents of manufacturer in accepting and redeeming the coupons and send the collected to the concerned manufacturer along with their claims of reimbursement. Marketers employ a remarkable variety of sales promotion tools in marketing. Sales promotion efforts attempt to attract the attention of customers at the point of sale and enhance sales volume. Sales promotions are those activities, other than advertising and personal selling that stimulate market demand for products. 3000 and the next lesser model is priced at Rs. After the receipt of the proof, the marketer sends the premium to the consumer. The winners are decided in two stages. For example, to win a Santro car, the consumer was required to collect three coupons that would complete the name of the prize, that is, Santro. Thus, retails stores try to focus customer attraction by carrying out sales promotion techniques. This too may or may not involve the purchase of any product or service. Sellers give buying allowance of a certain amount of money for a product bought. According to the American Association of Advertising Agencies, “A contest is an event that invites the customer to apply skill to solve or complete a special problem”. Getting a printer free with the purchase of a computer, or getting a bar of detergent free with the purchase of four cakes of toilet soap, or getting a Swiss knife well below the market when the consumer purchases a microwave oven, are typical examples of premium. The flexibility of sales promotion has the potential of being used by small and large companies, selling goods or services, and by profit and non­profit organisations. Coupons are particularly attractive to consumers who are price sensitive. The same agency says. In these contests, participants compete for prizes on the basis of their skill or creative ideas. In fact, in most households the flour comes from flourmills where people take their wheat to be converted into wheat flour. Sales promotions encourage the customers to try a new product. Sales Promotion Tools and Techniques – 12 Commonly Used Tools: Coupons, Free Samples, Price-Off Offer, Fairs, Exhibition, Free Gifts, Competitions and a Few Others. Starting from such low-priced product as “Pan Masala” or expensive products such as cars, and almost everything in between, including sporting events, use contests and sweepstakes. Money-Back Offer 12. It increases sales and makes sales of slow moving products faster and stabilize fluctuating sales pattern. Need and Importance 5. Booster for Dealers – For example, Telco offered 2% discount to dealers if payments, made upfront to reduce mounting inventories and boost sagging morale of dealers. Sales contests are conducted to attract new customers or to introduce new products. 1. Promotion helps in differentiating a particular product of the firm from the competing products of other firms. By announcing a price discount on some popular consumer item, the retailer’s intention is to increase store-traffic. Such premiums are attached either to the product, enclosed with the product, or otherwise available with the product when the consumer buys the product. Free Goods – An attractive coffee mug free with a pack of 200 gms. Marketers can offer an article of merchandise as an incentive in order to sell product or service these are known as premiums, as the customer gets something in addition to the main purchase. Sometimes, coupons are introduced either through press advertising or through the package of the product itself, which induce the consumer to buy the product at a concessional price. It attracts channel members to participate in manufacturer promotion effort. Especially when the concept is new, most people are hesitant to take risks. A visit to your nearby supermarket will reveal numerous sales promotion schemes of various products, simultaneously vying for our attention. The offer was valid for a month only. of Nescafe coffee. The assurance given to customers is that if the product is not liked after usage for any reason, total money will be refunded or the customer will have the option to buy any other product of choice. A free sample stimulates consumer trial, while a free management advisory service cements a long-term relationship with a retailer. Example—”Exchange your black and white television with a colour television.”. Tools or Techniques used for sales promotion: i. Sales Promotion Techniques Targeted To Consumers. 5. This Topic is part of topic Promotion of chapter - Marketing Management of class 12 Business Studies. When coupons are offered by the manufacturer all the costs associated with advertising and distributing the coupons, redeeming their face values, and paying retailers a fee for handling, are borne by the manufacturer. The reusable containers for packaging often have special appeal to the consumers who don’t have to pay anything extra for the product. Consumers kept on buying the same brand and collected many coupons, most not winning anything because in most cases the coupons had the same or different letters, not fit to complete the desired word. CODES (3 days ago) trade sales promotion examples - My Best Coupon Codes (6 days ago) (2 days ago) In a nutshell, trade promotion is a marketing tactic aimed at retailers by manufacturers, with the goal of increasing the demand for their products. The coupons are also issued through newspapers and magazines. The first part involves a contest in terms of skill, or knowledge. According to American Marketing Association, “Sales promotion includes those marketing activities, other than personal selling, advertising, and publicity, that stimulate consumer purchasing and dealer effectiveness, such as displays, shows and expositions, demonstration, and various non-recurrent selling efforts not in the ordinary routine.”. Advertising supports sales promotion activities by informing the public about such efforts of the company. Limitations. Trade promotion can persuade the wholesaler, retailers or distributor to carry a brand, advertise or give a shelf space to the products of a particular company. All these sales promotion schemes work on the principle that few people can resist a free gift, price reduction or special offer. This method may be used in products like washing machine. These activities might include extra cash or trade discount on the basis of orders placed. Just buy a scooter, scratch a card and win a sure prize. 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