Premium Essay

Sales Promotion

In: Business and Management

Submitted By priyadharshini
Words 2810
Pages 12
Sales Promotion

Lesson 24

Sales Promotion

Suppose you go to the market to buy soap. The shopkeeper suggests that if you buy two soap cakes, an extra soap cake will be given to you free of cost under “buy 2 get 3” scheme. You feel attracted to buy as by doing so you are saving money on one soap. Moreover, soap is an item which is required on a regular basis, and so you can keep the extra two cakes to be used later. This is an approach of increasing sale of a product and it is quite different from what you have learnt in the earlier two lessons. Let us learn more about it in this lesson.

24.1 Objectives
After studying this lesson, you will be able to: explain the meaning of sales promotion; state the objectives of sales promotion; describe the various tools used in sales promotion; recognise the role of each tool in promoting sales; and describe the importance of sales promotion in business.

24.2 Meaning of Sales Promotion
Every businessman wants to increase the sale of goods that he deals in. He can adopt several ways for that purpose. You might have heard about “lakhpati bano”, “win a tour to Singapore”, “30% extra in a pack of one kg”, “scratch the card and win a prize” etc. You might also have seen gifts like lunch box, pencil box, pen, shampoo pouch etc. offered free with some products.

115

Business Studies

There are also exchange offers, like in exchange of existing model of television you can get a new model at a reduced price. You may have also observed in your neighbouring markets notices of “winter sale”, “summer sale”, “trade fairs”, “discount upto 50%” and many other schemes to attract customers to buy certain products. All these are incentives offered by manufacturers or dealers to increase the sale of their goods. These incentives may be in the form of free samples, gifts, discount coupons, demonstrations, shows, contests etc....

Similar Documents

Premium Essay

Sales Promotion

...Abstract Sales promotion has been in constantly growth since the 1960’s and have today become one of the key factors in the promotional mix. The methods used have become more sophisticated and an increasing number of companies are realizing the importance of a well structured promotion strategy. The purpose of this thesis is to provide a better understanding on how sales promotion is used in B2B setting. In order to reach this purpose, research questions focusing on the objectives of sales promotion, as well as which sales promotion tools that were used were stated. Based on these research questions, a review of the relevant literature was conducted, resulting in a conceptual framework, which was used to guide this study's data collection. A qualitative, case study approach was used, using interviewing at an industrial company in Sweden as the primary data collection tool. The findings indicate that, although the individual objectives of the tools can be different they can still be used overall to lead to the same overall goal. It was also found that the focus is not always on using sales promotion tools to generate sales, but to improve relationships. As for the tools used, it was found that there are commonly used sales promotional tools in B2B settings. More specifically, gift giving can be deemed inappropriate in certain contexts and should be used carefully. Table of Contents TABLE OF CONTENTS 1. INTRODUCTION .........................................................

Words: 15132 - Pages: 61

Premium Essay

Sales Promotion

...Sales promotion From Wikipedia, the free encyclopedia Sales promotion is one of the seven aspects of the promotional mix. (The other six parts of the promotional mix are advertising, personal selling, direct marketing, publicity/public relations, corporate image and exhibitions.) Media and non-media marketing communication are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability. Examples include contests, coupons,freebies, loss leaders, point of purchase displays, premiums, prizes, product samples, andrebates Sales promotions can be directed at either the customer, sales staff, or distribution channel members (such as retailers). Sales promotions targeted at the consumer are calledconsumer sales promotions. Sales promotions targeted at retailers and wholesale are called trade sales promotions. Some sale promotions, particularly ones with unusual methods, are considered gimmicks by many. Sales promotion includes several communications activities that attempt to provide added value or incentives to consumers, wholesalers, retailers, or other organizational customers to stimulate immediate sales. These efforts can attempt to stimulate product interest, trial, or purchase. Examples of devices used in sales promotion include coupons, samples, premiums, point-of-purchase (POP) displays, contests, rebates, and sweepstakes.[1] |Content| |s | |  [show| |]  ......

Words: 2464 - Pages: 10

Premium Essay

Sales Promotion

...Objectives of Sales Promotion You have learnt that the main objective of sales promotion is to increase sales. i. To introduce new products ii. To attract new customers and retain the existing ones iii. To maintain sales of seasonal products iv.To meet the challenge of competition Let us learn about these objectives in details. (i) To introduce new products: Have you ever heard about distribution of free samples? Perhaps you know that many companies distribute free samples while introducing new products. The consumers after using these free samples may develop a taste for it and buy the products later for consumption. (ii) To attract new customers and retain the existing ones: Sales promotion measures help to attract or create new customers for the products. While moving in the market, customers are generally attracted towards the product that offers discount, gift, prize, etc on buying. These are some of the tools used to encourage the customers to buy the goods. Thus, it helps to retain the existing customers, and at the same time it also attracts some new customers to buy the product. (iii) To maintain sales of seasonal products: There are some products like air conditioner, fan, refrigerator, cooler, winter clothes, room heater, sunscreen lotion, glycerin soap etc., which are used only in particular seasons. To maintain the sale of these types of products normally the manufactures and dealers give off-season discount. For example, you can buy air......

Words: 8537 - Pages: 35

Premium Essay

Essay on Sales Promotion

...1.1 Introduction Integrated marketing communications refer to a specific mix of advertising, personal selling, sales promotion and public relations a company uses to pursue its advertising and marketing objectives. Sales promotion is a form of short-term incentives to encourage purchase or sales of a product or service. While its main purpose is to stimulate quick response at targeted consumers, it is not effective at building long-term brand preferences. There are essentially three types of benefits of sales promotion: utilitarian, where the consumer is able to justify value of product through utility; hedonic, how one is able to derive pleasure from; and affective, which are additional utilitarian benefits. If a consumer feels that his purchased product is being utilized to its capabilities, he would derive a sense of pleasure that he paid good money for the product. In other words, utilitarian and hedonic benefits are related to one another. 1.2 Utilitarian and Hedonic benefits relating to cost, value and benefits Utilitarian benefits also relate to economic utility that a consumer would get through a purchase. This would be in the form of direct savings, quality and convenience. Very often, firms would choose monetary promotions (i.e. price discounts, two-for-one bundles) to capture consumer’s attention. Marketers would benefit by enjoying higher sales with regards to everyday products or fast consumer moving goods, while customers benefit by enjoying more......

Words: 1256 - Pages: 6

Premium Essay

Sale Promotion

...Sale promotion Techniques By one get one free, receive a free gift bag with this purchase, free samples to try, Voucher and coupons for extra discount, Prize draws or zero percent financing have you ever herd these words or read them in a news paper magazine or internet or maybe even seen it on TV or your local mall or even a bus ride to work or home, these are all examples of sales promotion. According to Dave Dolak (2010), Sales promotions are short-term incentives to encourage the purchase or sale of a product or service. But first sales promotion could be directed towards Trade or consumers and some times both trade is the retail store or the sales men and maybe the whole sale distributor that the company must work with to sell its product wile on the other hand consumers are people who are there to buy the product. Different companies or firms or even people use different techniques of sales promoting some of them are discount and deals, increasing industry visibility, price based consumer sales promotion and attention getting consumer sales promotion Moving on to the first technique, which is discount and deals this is done by giving a price break to seller or whole seller or some times even the sales men or by lowering the prices of the product. The Firm or company can do this by offering merchandizing allowance, according to MIMI.HU web site (2010) states “Merchandise allowance a manufacturer's agreement to pay resellers certain amounts of money for providing......

Words: 907 - Pages: 4

Premium Essay

Sales Promotion Strategy

...Sales Promotion Suppose you go to the market to buy soap. The shopkeeper suggests that if you buy two soap cakes, an extra soap cake will be given to you free of cost under “buy 2 get 3” scheme. You feel attracted to buy as by doing so you are saving money on one soap. Moreover, soap is an item which is required on a regular basis, and so you can keep the extra two cakes to be used later. This is an approach of increasing sale of a product and it is quite different from what you have learnt in the earlier two lessons. Let us learn more about it in this lesson. Objectives After studying this lesson, you will be able to: explain the meaning of sales promotion; state the objectives of sales promotion; describe the various tools used in sales promotion; recognise the role of each tool in promoting sales; and describe the importance of sales promotion in business. Meaning of Sales Promotion Every businessman wants to increase the sale of goods that he deals in. He can adopt several ways for that purpose. You might have heard about “lakhpati bano”, “win a tour to Singapore”, “30% extra in a pack of one kg”, “scratch the card and win a prize” etc. You might also have seen gifts like lunch box, pencil box, pen, shampoo pouch etc. offered free with some products. Business Studies There are also exchange offers, like in exchange of existing model of television you can get a new model at a reduced price. You may have also observed in your neighbouring markets......

Words: 1941 - Pages: 8

Premium Essay

Sales Promotion Techniques

...Marketing firms use many sales promotion techniques to attract and retain customers. There are four that are the main ones. They are the use of: (1) discounts and deals (2) increasing industry visibility, (3) price based consumer sales promotion, and (4) attention- getting consumer sales promotion. Discounts and deals can be summarized as enticing customers through some offer that can considered a “good” deal. For example, things like “buy one get one free” offers can be considered in the discounts and deal category of sales promotion techniques. In a way, discounts and deals are promotions where the company selling the product are giving away their product on a structured price or offer where it is different from its normal circumstances. Another example can be a something found in today’s economy where many retailers are offering 20% off discounts on all older car models or anything of that sort. Though these examples are geared to everyone in general, discounts and deals usually can be geared towards trade among wholesalers and retailers. An example for that can be salesmen within the company can receive bonuses if they can push more products out the door. The second category of sales promotion techniques is increasing industry visibility. In short, this technique just makes the product well known in smaller ways and even bigger ways. For example, a company might put their logos on coffee mugs or refrigerator magnets. Many realtors do this, they want to promote their......

Words: 573 - Pages: 3

Premium Essay

Sales Promotion

...1. Free Maintenance As we know that Dr.Martens is with the light skinned shoes boots. If shoes do not maintenance will easy get dirty and look old. Nowadays, people are regard to designer shoes but they only buy the shoes do not know how to maintenance. As I know in Malaysia do not have this kind of after sales service and the maintenance thing of shoes are not popular in Malaysia. Moreover, shoes has maintenance compare with those which do not maintenance are easier to distinguish, although those pirated products are look exactly the same as original’s but you get what you pay for. Those pirated are using inferior material to produce with a time period people can distinguish the original and pirated. Therefore, Dr.Martens should using this for sales promotional tools to promote their shoes, FIRST that other brands do not have this kind of service; SECOND easy to defeat those pirated products to imitate Dr.Martens design. 2. Lucky Draw Lucky draw is the simple way to attract people attention but the important part is the reward of the lucky draw. Dr.Martens can provide the 1st place a pair of special design shoes that the design is not selling at all. When the reward was attractive, Dr.Martens should set the condition of the lucky draw. The condition of lucky draw can be buy over RM1000 can get 2 name card for lucky draw. However, Dr.Martens normal price is between RM500-RM600, people may find friend to buy together or buy over RM1000 by himself because of the special......

Words: 949 - Pages: 4

Premium Essay

Best Buy Sales Promotion

...MKTG - 410 Sales Promotion Objective: For the objective of the sales promotion plan this is more aimed towards the people they're looking to save money by using coupons, discount codes, and other sorts of items I'll take a certain percentage of off of items. We are going to want to be sending out more of these coupons try to get more people in this door whether the actual physical store or through our online website and catalog. Throughout the year will be having different sales and promotions and some will include Black Friday, Easter, Christmas, New Year's, and super bowl sales. The research and analysis of past markets we are able to understand that with promotions during these times sales dramatically increase. This is similar to the Internet marketing and direct marketing segment seeing how we will be both e-mailing and physically sending newsletters to the people that have signed up for the service, we will also be adding this into our weekly and monthly newsletters that are available for pickup at any local store across the nation. Along with our normal newsletters that we have organized a special want they'll give the people their Best Buy reward zone customers a special 40% off any item in the store two times a year. By doing this we are not be able to draw more people in both landline and in the physical store to help increase sales for the fiscal year outperformed the previous years. Budget: For the sales promotion plan that we're going to create......

Words: 1052 - Pages: 5

Premium Essay

Sales Promotion and Consumer Loyalty: a Study of Nigerian Tecommunication Industry

...Sales Promotion and Consumer Loyalty: A Study of Nigerian Tecommunication Industry Oyeniyi Omotayo Abstract In today’s competitive business world customers are considered to be kings. Customers have several choices to make among alternative products, and they exercise a high level of influence in the market with respect to product size, quality and price. Hence, it is important for producers to meet the needs of customers in order to stay competitive. One of the marketing communication tools that is used in attracting the attention of the customer and build their loyalty is sales promotion. The aim of this paper therefore is to determine the effect of sales promotion on customer loyalty in the telecommunication industry. In this study, the survey method was used in gathering information from the respondents. Simple random sampling was used to select a sample size of 310, while descriptive and inferential statistical analyses were conducted with the aid of SPSS software. Producers spend a large part of their total marketing communication expenses on sales promotion. Hence, this paper attempts to find the effect of sales promotion on customer loyalty using a sample of customers of mobile telecommunication services. The paper found that, there is positive relationship between sales promotion and customer loyalty. More importantly, it was discovered that non-loyal customers are more prone to switch to competing products as a result of sales promotion than loyal......

Words: 3933 - Pages: 16

Premium Essay

Personal Selling and Sales Promotion

...Chapter 17: Personal Selling and Sales Promotion 1. Under what conditions does personal selling typically become a primary component of the firm’s promotional mix? * Consumers: geographically concentrated and relatively low number of them * Product: expensive, custom made, special handling requirements * Price: relatively high * Channels: relatively short 2. Describe over-the-counter and field selling. Which is more expensive? Over-the-counter selling: personal selling conducted in retail and some wholesale locations in which customers come to the seller’s place of business Field Selling: sales presentations made at prospective customer’s locations on a face-to-face basis *More expensive 3. Distinguish between inbound and outbound telemarketing. Inbound: customers who initiate calls to obtain information and place orders Outbound: salesperson who makes a call to the customers 4. List/discuss the three major personal selling approaches. Relationship Selling: regular contacts between sales rep and customers over an extended period of time to establish a sustained buyer-seller relationship Consultative Selling: meeting customer’s needs by listening to them, understanding their problems, paying attention to details, and following through after the sale Team Selling: selling situation in which several sales associates or other members of the organization are recruited to help the lead sales rep reach all those who influence the......

Words: 670 - Pages: 3

Premium Essay

What Is Meant by Sales Promotion? Describe Briefly the Various Methods of Sales Promotional Tools Used by Business Organizations to Boost the Sales. Explain Any Four Methods of Sales Promotion?

...What is meant by sales promotion? Describe briefly the various methods of sales promotional tools used by business organizations to boost the sales. Explain any four methods of sales promotion? Sales promotion refers to activities or inducements meant to make people come and buy more of your product, especially in the short term. Sales promotion consists of short term incentives to encourage the purchase or sales of a product or service thus offering reasons to buy product or services now. Using different methods of promotion such as; giving away coupons, offering discounts, cash refunds, patronage rewards and samples makes customers decide to buy now. Sales promotion is targeted for business and industrial goods also Industrial products differ with that of consumer goods. The tools which are used are- 1) Trade shows:- The industrial products are displayed and demonstrated to the members of trade and industry. The representatives explain about the products. The trade shows can be useful for smaller firms which can’t much in advertising and also salesman can make for more contacts. Trade shows are important rules for reaching potential wholesalers & distributers for a company’s brand. 2) Business gifts:- These gifts are given as a part of building and maintaining a close working relationship with suppliers business gifts may include small items of jewellary, watch, electronic items, expensive trips. 3) Trial offers:- Trial offers are particularly well suited......

Words: 1202 - Pages: 5

Premium Essay

Sales Promotion Schemes Project Report Mba

...Sales Promotion Schemes Project Report MBA   One of the most difficult marketing decisions facing companies is how much to spend on promotional John Wanamaker, the departmental - store magazine, said, "I know that half of my advertising is wasted but I don't know which half." Thus it is not surprising that industries and companies vary considerably in how much they spend on promotion. Promotional expenditures might amount to 30-50% of sales in case in cosmetics industry and only 10-20% in the industrial equipment industry. Within a industry, a low and high spending companies can be found. How do companies decide on their promotion budget? There are mainly four methods of sales promotion :• Affordable Method :Many companies set the promotion budget at what they think the company can afford. One executive explained this method as follows : "Why, it’s simple. First I go upstairs to the controller and how much they can afford to give us this year. He says a million and half. Later, the boss comes to me and asks how much we should spend and I say ‘Oh about a million and half."It is a method which is uncertain one and makes long term planning difficult.• Percentage of Sales Method :Many companies set their promotion expenditures at a specified percentage of sales. Accordingly the sales is set on the basis of sales. | Advertising Effectiveness Project ReportInternal Customer Satisfaction Project Report | In this a specified sales percentage is decided for the promotional......

Words: 3276 - Pages: 14

Premium Essay

Promotion Sales

...1 6 CHAPTER Advertising, Publicity, and Sales Promotion In the summer of 1965, 17-year-old Fred DeLuca was trying to figure out how to pay for college. A family friend suggested that Fred open a sandwich shop—and then the friend invested $1,000 to help get it started. Within a month, they opened their first sandwich shop. From that humble start grew the Subway franchise chain with more than 33,000 outlets in 91 countries. Targeted advertising, timely publicity, and sales promotion have been important to Subway’s growth. For more than 10 years, memorable Subway ads featured Jared Fogle, a college student who was overweight but lost 245 pounds by only eating Subway’s low-fat sandwiches like the “Veggie Delite.” Jared says it was a fluke that he ended up in Subway’s ads. After all, he was recruited to do the ads because of good publicity that Subway got after national media picked up a story that Jared’s friend wrote about him in a college newspaper. Subway’s strategy at that time focused on its line of seven different sandwiches with under 6 grams of fat. The objective was to set Subway fare apart from other fast food, position it to appeal to health-conscious eaters, and spark new sales growth. Jared already knew he liked Subway sandwiches, but the “7 under 6” promotion inspired him to incorporate them into his diet. As soon as Jared’s ads began to run, word of his inspiring story spread and consumer awareness of Subway and its healthy fare increased. It’s always hard......

Words: 19343 - Pages: 78

Premium Essay

Sales Promotion

...interest in the product being promoted. + Attract more attention and interest than sweepstakes. (Effort in the entries) + Can be design to have public relations value. + Allow companies to solve marketing problems (contest about What the coolest computer can do) - Most people enter only once or a few times. Sales Force Contests Designed to encourage company, distributor, or retail sales forces to work hard to sell the product. ex, reward the top salesperson Spliffs – reward retail- or distributor-level salespeople with a certain amount of cash for each item they sell. Mystery Shopper – usually consist of actors, hired by manufacturers, who visit retail outlets asking for assistance and recommendations. If salespeople respond by suggesting the “right” brand, they can win a prize. Instant win – find out directly if they’ve won Other sweepstakes may give consumers game pieces that include entry numbers or symbols; individuals must then visit a specific retailer, watch a particular TV show, or take some action to find out if the have won a prize. Uses of Sweepstakes & Contests 1. Create consumer interest and excitement. 2. Joint promotion can be developed with manufacturers of relatively high-priced goods, who provide prizes at cost, or free, in exchange for the publicity value. 3. Attract free media attention, especially contests. 4. Good way to collect information about its consumers for a costumer...

Words: 2553 - Pages: 11