In order to encourage the sale or purchase of a product or service, short term incentives are given which are known in sales promotion. Sales promotion offers reasons to purchase now whereas personal selling & advertising offer causes to purchase a product or service.
Factors Affecting Sales Promotion
There are many factors affecting sales promotion that gives the quick growth of sales, especially in consumer markets. First, within the business organization, a lot of pressure is faced by product manager to increase their existing sales, and promotion is considered as a useful short run instrument.
See Also: Total Promotion Budget and Mix Advertising
Secondly, in external environment, competition is faced by business organization and there is less differentiation of the competing brands. Enhancing, sales promotion is used by competitors in order to get assistance in differentiating their products.
Third, advertising efficiency has fallen because media clutter, rising costs and legal constraints. Finally, more deals are demanded by ever-bigger retailer from producers because of the fact that customers have become more deal oriented.
Promotion clutter is resulted from growing use of sales promotion, similar to advertising clutter. Promotions are to be tuning out increasingly by the customers, weakening their capacity to activate immediate purchase.
Producers are now finding ways to increase above the clutter, such as developing more point-of-buy displays or offering larger coupons values.
Objectives of Sales Promotion
There is wide variation in objectives of sales promotion. Consumer promotions are employed by sellers to assist build long-term market share or to increase short term sales.
Goals for trade promotions contain making retailers to take more inventories & new items, give the product more shelf space & make it more advertise, and make the product to purchase ahead.
For the sales force, goals contain making more sales force assistance for new or existing products, or new accounts are signup by the salespeople.
Sales promotions are generally employed along with the personal selling and advertising. Consumer promotion should generally be advertised and can combine pulling power and excitement to ads.
The business organizations’ personal selling process is supported by trade and salesforce promotions. Generally sales promotion is like building consumer relationship.
They should assist to strong the position of the product and develop long-term relationships with consumers, rather than temporary switching or creating short-term sales.
Major Sales Promotion Tools
In order to accomplish sales promotion objectives, there are many tools for this purpose. These tools are as follow
- Consumer Promotion Tools
- Trade Promotion Tools
- Business Promotion Tools
Developing the Sales Promotion Program
In order to define entire sales promotion program, the marketer must make many other decisions. The size of the incentive is the first decision that marketer must consider.
If the promotion must be succeeding, then a particular minimum incentive is essential. More sales response will be produced by a larger incentive.
The conditions for participation are also set by marketer. Either everyone is offered incentives or particular group is offered incentives.
In order to how to promote and distribute the promotion program itself, marketer should make decision. A 40-cents-off coupon could be provided at the store, in a package, in an advertisement or by mail.
A different level of reach and cost is involved in each distribution method. Several media are blending by marketer into total campaign concept. The length of promotion is also significant.
Many prospects will miss it if sales promotion period is too short. The deal will lose some of its “act now” force, if the promotion runs too long.
Evaluation is also very significant. The sales promotion programs are fail to evaluate properly by the business organization or in some case these business organizations evaluate superficially.
One of the several evaluation methods are used by producers. To compare sales before, during and after a promotion is the most common method.
The types of people who responded to promotion are also shown by consumer research and what they did after it ended.
Surveys can give data on how many consumers remember the promotion, what they consider of it, how many get benefit of it, and how it influenced their purchasing.
Experiments are also used to evaluate sales promotion that change factors like length, incentive value and distribution method.
In the total promotion mix, sales promotion plays a significant role. To employ it properly, the marketer should specify the sales promotion goals, choose the best instruments, design the sales promotion programs, apply the program, and measure the results.
See Also: Major Advertising Decisions
Within the integrated marketing communications program, sales promotion should be properly coordinated with other promotion mix elements.
Sales Promotion Uses and Limitations
Sales promotion instruments are useful for the business organizations in various aspects like they can be utilize to launch new products, making current customers to purchase more.
Appeal new customers, keep sales in off seasons, combat competition, tie in personal selling & advertising, increase retail inventories, enhance personal selling struggle.
Sales promotion has many limitations as well besides these advantages, like cannot overcome, cannot reverse falling sales trend, may promote competitive retaliation, inferior product and may hurt profit.
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