Usually free samples are given to introduce new products to customers. Deflect customers attention from price. Why Sales Promotion Increases Sales. The target group of consumers, their behavioural patterns, their attitude and perceptions should be given due importance in order to ascertain the effectiveness of the programme. Sales force promotion: It involves efforts targeted towards the sales force to boost the morale of salesmen. 3. The retailer is not actively involved in them. The main purpose of sales promotion is to introduce a new product among customers. Before publishing your Articles on this site, please read the following pages: 1. 60, making the effective price only Rs. These samples aim at inducing trial of the product. money-off vouchers, trade-in allowances. Everything about contest, whether display or sales, should convey the idea that it is something special. (iii) To push stocks of the old brand before the introduction of new model. A free sample is generally welcome to almost all consumers and increases the probability of trial and, in some cases, purchase as well. Encourage Repeat Purchase: Encourage Dealers to Participate in Display and Sales Contests, Objective # 7. 2. Gifting. Done well, they boost short-term sales but also attract new customers, prompt positive online reviews, and lead to repeat purchases. Opportunities that are ideal for a cross-promotional sales strategy include an upcoming industry conference, a concert or a major sporting event. To gain additional market share or additional revenue. Informing buyers of new brand and new package. This objective may also be accomplished for certain consumer durable goods in case of trade segment. 5. Objectives Of Sales Promotion. The manufacturer or marketer has a good product, reasonable price, attractive package, a good sales force. Share Your PPT File, Sales Promotion Objectives: Increase in Sales Volume, Encourage Repeat Purchase and To Block Competitor Moves, – Top 7 Objectives: Launch New Products and Increase Trail, Encourage Dealers to Participate in Display and a Few Other Objectives. Price increase can often have negative effect on sales. The various objectives of sales promotion can be summed up as follows:-, 1. It also stimulates interest into a new product. Promotion Objectives . Promotional features should highlight the suitability of special attributes to specific targeted segments. In order to establish high brand equity and to generate brand loyalty, the promoted brands or the products should be easily accessible and readily available to the consumers. Sales promotion is most effective when it is tailored to the buying behavior of a particular target. Detergent powders and cakes toilet-soaps, shampoos, oral hygiene products, and many other non-durable products, which are consumed every day, may respond well to such promotions. Spend one hour each day prospecting to find good-fit leads. Displays serve them as reminders, encourage unplanned purchases and increase store traffic. ADVERTISEMENTS: a. Sales promotion is a tool used to achieve most of the five major promotional objectives discussed in the Promotion Decisions Tutorial:. >> increase in sales promotion is motivated by marketing plans and reward systems geared to short-term performance and immediate generation of sales volume >> fixation on market share not only to introduce products >> view consumer and trade promotions as the most dependable way to generate short-term sales, particularly when they are price-related. Sales persons persuade consumers to buy products. 55/- whereas the MRP is Rs. These trade promotions are targeted to marketing intermediaries such as – wholesalers and retailers. To Assist a Salesman in Selling 7. 8. Contestants were required to suggest one word as a prefix or suffix to describe ‘Nescafe’. Some of the important objectives are mentioned below, and the more important ones have been discussed briefly: 2. When the decision is to discontinue a product, or close down the business. (6) To Face Competition Effectively – Promotional activities help the producer or seller to meet the competitive situations in the market. iv. Of course the coupon should be of immediate value, instantly redeemable “on-package”, or the discount should be given at the time of purchase. There was no limit on the number of entries one could send. Thus, its major role is persuasive communication. Sales promotion is a blend of marketing activities and promotional items to intensify the efforts of your sales force, induce your intermediaries to stock and sell your products, and to persuade your customers to purchase the offering within a … BIG discounts. 2. They should, therefore, be informed of the new product and told that the new product works better than all similar existing products. A number of personal care products, such as shampoos, cosmetics, toilet soaps or laundry products, such as detergent powders and cakes etc., have been introduced successfully in the last few years. 50 before the price rise, and the new price is Rs. It covers non-personal and non-media activities like free samples, coupons, rebates, discounts, etc. Free samples may be distributed to leading consumers who may be a source of advertisement for other prospective consumers. Section 24.4 describes how promotions affect sales, and discusses the sources of incremental volume associated with a promotion. (1) Providing Information – Promotion is an exercise in information, persuasion and influence. (b) Increasing the size of the average sale: (i) Promotions can be introduced on high-margin goods, so the overall profitability improves. That is, the retailer needs to see over the collection and redemption of coupons, reorganisation of the store layout, shelf displays, etc. 2. Usually, it is mentioned on the pack that a certain amount is off. To combat or offset competitors' marketing efforts. An important area that concerns sales promotion objectives is directly related to the specific promotional techniques to be used. However, they may vary with the type of target market and points of channel. Introducing new products – To induce buyers to purchase a new product, free samples maybe distributed or money and merchandise allowance maybe offered to business to stock and sell the product. Displays attract consumer attention who, are passers-by, or window shopper, displays serve them as reminders, encourage unplanned purchases, and increase store traffic. The suppliers tend to associate the charisma associated with these personalities with their products. (5) To Induce Middlemen – The middlemen-wholesalers and retailers are induced to purchase more stock of company’s product by offering more facilities such as credit facilities, higher cash and trade discounts, free gifts etc. And since the customer also sends in some amount of money, the purchase price is easily covered. They must have some knowledge about the product offered by the producer. Before publishing your Articles on this site, please read the following pages: 1. Objectives of Sales Promotion: Top 7 Objectives. The objectives for retailers may be to carry new items, encourage off-season buying, and offset competitive promotions, build brand loyalty, and so on. To supplement and co-ordinate efforts of Advertising/Personal Selling. Speed up the sales of slow moving products. Other sale techniques are used to the customers to purchase the product even in the off season. The retailer plays no part in such promotional activities; he sells the merchandise as usual, with no significant effort and expenses from his end. 7. Sales Promotion Objectives. If the promotion objectives have consumer and trade orientation the sales promotion strategies focus on different consumer promotions and trade deal. This is due to managers need to increase sales (inte… For example, the store could offer a money-off voucher with the hair gel bottle or the customer would be entitled to get a shampoo if they purchase the hair gel. Objectives of Sales Promotion. Reminder promotion is very active during the maturity stage of product life cycle. You might catch something, but the results are iffy at best. In an average store, there may not be more than ten or fifteen items that get major display space at any given time. To provide Information regarding the quality, uses, different uses of the products, 5. The objectives for the sales force may be to encourage a new product or model, stimulate off-season sales, and persuade more prospective buyers, and so on. The producer through promotional means provides information regarding the quality, different uses and the price of the product or service to the consumers. So, many companies now use personalities selectively to avoid overexposure. Sales promotional tactics include contests, coupons, freebies, loss leaders, point-of-purchase displays, premiums, prizes, product samples, and rebates. Such a threatened firm would plan to loan load consumers so that they are in no need to go shopping for that product category. Marketers attempt to increase sales for an established brand in several ways, and sales promotion can play an important role in each. The purpose of advertising is to improve dispositions towards a brand, while the objective of sales promotion is to translate favourable attitudes into actual purchase. Therefore, no company can escape from sales promotion activities. Here two or more packs are attached and sold for a better and attractive price than the price of the items singly. Encourage dealers to participate in display and sales contests. 8. Sales promotional devices help introduce new products in the market. A free sample, along with a coupon of attractive value, may prove to be more effective in inducing trial of a new product by consumers and may also lead to purchase of the regular pack from the market. In its absence, it is useless to imagine an increase in sales. An Overreliance on Promotions. It is necessary while introducing the product to the market and thereafter, if there is any change in these elements, through various promotion tools i.e., advertising, salesmanship, publicity, point of purchase etc. To Promote a New Product: In a large and decentralized market, market promotion is an inevitable … Promotional activities increases the sales by changing the elasticity of demand of the product through various techniques i.e. Sales promotion programme should be developed to generate the confidence of the consumers regarding the claims focused. Promotional tools should be developed and applied as a supplementary to the other devices like public relations, publicity, advertising etc. Advertising cannot normally close a sale because its impact is too far from the point of purchase, but sales promotion can. The idea being that the customer would be attracted towards purchasing the product. Objectives of sales promotion. These are in the form of small gifts that a customer gets on purchasing a product. Such contest should be held infrequently and not become a routine feature, which would reduce their importance and lead to decline in interest. Hasbro, a toy company, teamed with the retailer Toys R Us to create direct mail booklets offering discounts on Hasbro toys only at Toys R Us stores. In its absence, the old customers are not attracted towards the latest goods of the seller. Sales promotion directed towards the sales people is referred to as sales force promotions. They supply comparative information on various products so that consumers may be willing to purchase the products promoted by them. It covers non-personal and non-media activities like free samples, coupons, rebates, discounts, etc. At the salesman’s level, the objective of sales promotion is to achieve more sales. Objective # 6. The main objective of a commercial concern is to increase its sale. Sales promotion objectives are consistent with marketing objectives. There can be a number of sales promotion objectives, depending upon the firm’s 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. Sales quotas serve as the basis for preparing the budget for advertising and sales promotion. If the price of the product was Rs.50 before the price rise, and the new price is Rs.60, then a coupon with a face value of Rs.5 is provided that places the product’s price between Rs.50and Rs.60, making the effective price only Rs.55. Usually additional customers are won away from other firms. Thus, a quicker sales response results from sales promotion. Making consumers to switch brands in favour of firm. It is used to maintain relationship with the customer. Inducing retailers to promote the brand by local advertising and POP display. The following are the main in-store promotional activities: The product is sold at a reduced price from its normal selling price. These immediate value promotions can be directed toward those who like trying new products, and those who are regular users of the product. Large scale production can be achieved only with the methods of large scale selling which is possible only through the promotional activities. To influence consumers behavioural patterns. The objectives for consumers may be to encourage more usage and purchases of a larger number of units and attract competitors’ brand users. Small budget firms have to exercise extreme caution and use such promotion judiciously because this may prove to be quite an expensive propositioned. For this purpose, it provides suitable knowledge for recollection. Fast Sales Boost. Some outdated brands may also be withdrawn from the regular market and may be disposed off, adopting different schemes, allowing the consumers to buy the products at a concessional rate. ix. Persuading generally becomes the main promotion goals, when the product enters the growth stage of its life cycle. We all wait for the summer/winter clearance sale to finally buy items we’ve spotted but couldn’t afford to buy during the season. They should build confidence in the mind of customer about the product through promotion and personal selling. Promotional activities such as advertising giving information regarding price and quality of the product as compared to other similar products existing in the market or offering various facilities to middlemen with a view to sell company’s goods in preference to other goods or offering gifts and discounts to customers, help arrest competition. store ‘club’ cards, or continuity programmes such as collecting a dinner service. The promotional means may be salesmen, dealers, press, and other supplementary activities. The producers encourage current customers to purchase more through different promotional methods like premium, reduction in price, competition etc. They may read not only the headline but also the copy, and may get exposed to the advantages and benefits associated the brand. Stimulating sales – Sales promotion helps in promoting larger sales in certain specified segments of market. 5. For example, companies distribute free samples of their new product. In this stage target market has general product awareness and some knowledge about the product how the product fulfil their wants. To fascinate new consumers; New consumers can be fascinated by the allocation release of … Frequent-flier offer by some airlines is one such scheme, where the customer is allotted certain number of points, and on collecting specified points, gets a free offer of value. 24.3 Objectives of Sales Promotion You have learnt that the main objective of sales promotion is to increase sales. Price discounts can take different forms ranging from straight price discou nts to buy- The reasons for the growth of sales promotion is mainly due to: 2. Encourage Dealers to Participate in Display and Sales Contests: 6. To introduce new products or services: Sales promotion is often used to motivate prospective consumers to try new products and services. To increase the sales and encourage the present customers, 3. 7. Privacy Policy3. 10. v. Enhancing advertising and marketing efforts. — A.H.R. The goodwill can be created by schemes like continuity programmes or store cards. The desire may be created by advertising, but its conversion into sales would be done by sales promotion by offering a short-term incentive. 11. Through some sales promotion scheme or offer, the retailer can attract more number of customers to his outlet. Some of the important objectives are mentioned below, and the more important ones have been discussed briefly and can accomplish many sales promotion objectives: ii. Contests and Sweepstakes – A contest is a promotion where consumers compete for prizes or money on the basis of skills or ability. Helping firm remain competitive – Sales promotions maybe undertaken to meet competition from a firm. With the advent of scientific development, the products are available to the consumers according to their need and specifications. Such a threatened firm would plan to load consumers so that they are in no need to go shopping for that product category. (ii) To increase the stock-holding of retailers, or even consumers, before the introduction of a competing brand, or. Launch New Product and Increase Trial  3. Through the medium of sales promotion institutions make the work of sellers easy and direct contact is established with customers. However, it reduces the cost of promotion because of the low ‘redemption rate’. This is achieved by instilling loyalty among the customers through previous purchases. It helps marketers to realize a variety of objectives. 4. The effectiveness of this type of promotion can be significantly reduced if the store allows the coupon to be redeemed for different products. To Supplement Advertising and Personal Selling Efforts. The objective of sales promotion is to induce the consumer to purchase more and more products and thus demand for the product is created. Customers are told new methods how to use the product and this is done through work demonstration and cinema. vii. Informing is to educate the consumers about the product. Competition in similar products may be quality competition or price competition. Everything about a contest, whether display or sales, should convey the idea that it is something special. Speed up the sales of slow moving products, ix. Launch new product and increase trial. 8. Sales promotion can be developed as part of the social media or e-commerce effort just as advertising can, but the methods and tactics are much different. These new tie-ups mean more branding and sales opportunity for the company as well. Rapid growth: A decade ago, ad-to-sales promotion ratio was about 40:60, now is like 25:75 & growing. However, the appeal of these personalities may be declining because so many companies use the same celebrity models. To Develop Preferences and Convictions of Buyers: Sales Promotion Objectives – 9 Main Objectives, Sales Promotion Objectives – Informing, Persuading and Reminding, Sales Promotion Objectives – Dual Objectives of Sales Promotion, 1. They supply comparative information on various products so that consumers may be willing to purchase the products promoted by them. To … For example, a children’s product may use a person dressed as their logo (for example a teddy bear) in the store. Sales promotion objectives could be either proactive or reactive. You might set a sales objective to improve your percentages of upsells. To Add to the Stock of the Dealers. Its sales in Chennai, which is one of the largest markets for toilets soaps, were below all India levels. Improving the Public Image of the Firm: Huge amounts are now being spent on determining appeals for arresting the attention of the prospect towards the product. This strategy is usually brought to use in the following cases – to introduce new products, sell out existing inventories, The marketer or producer try to fulfil all the requirements, as desired by the consumers. 55. Promotions, such as discount coupons, not only encourage existing consumers but may also stimulate purchase by infrequent buyers, or even new tries. Sales promotion means and includes all the activities that are performed by a producer, a dealer or a businessman to increase his sales. Sales promotions ideas & examples 1. Then the customers come across the variety and novelty offered by the retailer, which they might not know before. This promotion is used selectively, normally in supermarkets, department stores, etc. Aggressive advertising and sales promotion campaigns back up new product launches by competing companies. Calling attention to new products and product improvements. Marketing planning and reward systems may lead to an increase in the use of sales promotion because sales promotions encourage: the use of price-oriented promotions to generate short-term sales. The purpose of sales promotion is to reduce the seasonal decline. Such promotions can be particularly useful in new markets, and can also be used to introduce a sense of urgency in consumer or the trade to buy the product now. Bowman (1980) cited the evidence indicating that print advertisements containing coupon are more likely to be noticed and recalled than are the same advertisements not containing coupons. Demand of the distributors, dealers and sales force to introduce and enhance promotions. Sales promotion is often used to motivate consumers to try a new product. Objective # 3. Colgate offers 25gm extra on their 200gm pack at the same price. Content Guidelines 2. Motivate dealers to stock and sell more. In a nutshell, informative promotion helps in increasing awareness of a new brand, product class, building, product image. Increasing sales in off season – Buyers may be encouraged to use the product in off seasons by showing them the variety of uses of the product. Sales promotion is also done so that the present customers may increase the use of a product. It helps marketers to realize a variety of objectives. Consumer-Oriented Sales Promotion, Consumer-Oriented Sales Promotion Techniques, Objectives – Increase in Sales Volume, Stock Clearance, Emphasizing Variety, Tempting Customers, Seeking More Involvement and Introducing New Arrivals, Providing Information, Increase Sales Volume, To Keep the Memory Alive, To Arrest Seasonal Decline, To Induce Middlemen and a Few Others. Providing information . Product adoption increased just by stimulating trial rate by consumers, leading to growth in sales which was maintained subsequently. These fittings make the product prominent compared to other .products, kept in normal racks. State the main goals of a sales promotion. Since many products have seasonal demand like fans, refrigerators, an important aim of sales promotion of such goods is to encourage the purchase in off-seasons. To Induce Middlemen to Purchase More – The middlemen whole sellers and retailers are induced to purchase more stock by offering more facilities such as credit facilities, higher trade and cash discount and free gifts etc. The final aim is to persuade customers to return again and again to the store trading on the goodwill and loyalty that previous purchases have, hopefully, instilled, e.g. During four-month period (February-May 1990). The objectives of a sales promotion is to increase consumer demand, stimulate market demand, to get potential buyers to heed a call to action, increase the size of purchases and improve product availability using media and non-media marketing communications. The first prize was Rs. 8/- reduction is offered. 2. tasting a food buying new T shirts and jeans; brass wares, etc. Inducing present customers to buy more – Present customers may be induced to buy more by knowing more about a product, its ingredients, and uses. 200,000. Hasbro, a toy company, teamed with the retailer Toys R Us to create direct mail booklets offering discounts on Hasbro toys only at Toys R Us stores. TOS4. Display is a powerful tool to enhance sales. ii. The products are categorised and standardised to suit the specific consumer demand. 2. Other objectives include but are not limited to – To Create Market For New Products. While brand awareness is a key promotional objective, a number of other important business objectives are served by promotional activities. Repeat Purchase 12. 3. ix. Samples distributed free, with or without a coupon, are often used to introduce a new product or induce trial of even an existing product by consumers. Market research studies revealed that the cause of below-level acceptance was inherent conservatism of the consumers in this market. The customer needs to follow the instructions and apply. Trade promotion: All sales promotion efforts are targeted towards the middlemen to push the product towards the end consumer. Small budget companies who cannot afford sustained advertising expenditures to introduce new products, or match the competitive advertising blitz, find sales promotion to be more cost-effective and helpful in generating more sales volume. Disclaimer Copyright, Share Your Knowledge It supplements and coordinates effort in these two areas. They should, therefore, be informed of the new product and told that the new products works better than all similar existing products. The competition may be from manufacturers or sellers of similar products or of substitutes. For example, the customer could get a jigsaw puzzle inside a ‘ pack of cornflakes, or a free mug with the purchase of a health drink. It would be ‘economical’ for the customers to buy a pack of three as it is available at the price of two packets. Short term sales increase is required to reduce inventories, meet budgets prior to … Launch New Products and Increase Trail: Objective # 3. Objectives of Sales Promotion. Increasing consumption of an established brand, iv. While brand awareness is a key promotional objective, a number of other important business objectives are served by promotional activities. Sales promotion consists of short-term incentives to encourage purchases or sales of a product or service. To introduce new products ii. Increasing the inventories of business buyers – Retailers may be induced to keep in stock more units of a product so that more sales can be affected. This is in the form of a discount where a customer has to pay less to purchase a product. Sales Promotion Objectives: 15 Objectives of Sales Promotion. Sales promotion secures the following objectives: 1. Generally sales promotion techniques are designed to create interest in the mind of customer and customer is interested to take action for purchasing the product or service. Wholesalers and retailers purchase goods for resale. The basic goal of most consumer-oriented sales promotion programs is to induce purchase of a brand. Menu. However, they may vary with the type of target market and points of channel. Introducing new arrivals and creating platform/awareness for newly launched products. To supplement advertising and personal selling efforts, xvi. To overcome the seasonal fluctuation of products. Besides advertisement promotional activities help achieve this objective. The old stock may be disbursed through the outlets, adopting different promotional schemes like ‘price-offs’ or sale of ‘seconds.’ This is generally known as ‘stock clearance sale’. 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