Types of Sales Promotion

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Types of Sales Promotion

Sales promotion can be classified based on the primary target audience to whom the promotion is directed.

Sales promotion can be broadly divided into three types:

  1. Sales Promotions Directed at Consumers
  2. Sales Promotions Directed at Trade Partners
  3. Sales Promotions Directed at Sales Force

Sales Promotions Directed at Consumers

We present herewith a selected list of consumer promotion tools:

  • Prize Schemes: Prize schemes are one of the most important methods of sales promotion. A prize scheme is designed for both the public and the dealers. To make the scheme effective, it should be advertised through the product packages, retailer store point of purchase promotion, advertising in press, posters and televisions.

  • Fairs and Exhibitions: Fairs or melas are very common in India. They play a substantial role in selling goods of different varieties to different people. Though the objective of visiting a fair is social in India, marketers use these fairs and melas as an opportunity to promote their products and services.

  • Free Samples: These are used for sales promotion of consumer goods and fast-moving consumer goods in particular. Free samples are generally used to introduce a new product and as a sales, tool to attract the attention of prospective buyers. Such sample distribution not only saves time but also eliminates the need for inspection or testing of goods by the buyer.

  • Correspondence: This is an effective device for sales promotion. Companies send letters, brochures and other kinds of correspondence to prospective customers through correspondence.

  • Catalogues: Catalogues play a dominant role, both in advertising and sales promotion campaigns. Catalogues are largely used when a firm manufactures different types of products with distinguished size, shape and other features. It is from the catalogue files that one can get the information required about different products of a particular manufacturer.

  • Advertising Novelties: Small, interesting, and personally useful items can be used for sales promotion. To be effective, an advertising novelty should not be a high-cost item; the novelty item should be usually eye-catching and should be useful to customers.

  • Entertainment of Customers: Entertainment is essential when a standardised product is sold in bulk costs. In such a case, entertainment of customers acts as a primary promotional device. However, when the product is sold on a routine basis, customer entertainment is neither necessary not justified.

  • Sales Contest: The main aim of sales contests is to motivate the sales personnel and increase sales, and bring more profit to the company. Under this scheme, special incentives in the form of prizes or awards are offered.
  • Price-off: A price-off is simply a reduction in the price of the product to increase sales and is very often used in introducing a new product. A reduction in price always increases sales but the use of this technique should be carefully considered in the current market situation.

  • Refund: A refund may consist of straight cash, coupon values or a product offered to the consumer in return for proof of purchase of a specified product or service. A refund is also an effective tool for sales promotion.

  • Point-of-Purchase Material: Point-of-Purchase (POP) materials are sales promotion material displayed at the point of sales. The POP display persuades, reminds and gives details to the consumers about a specific brand.

  • Coupons: These are certificates entitling the owner of the certificate to a stated saving on the purchase of a particular item. The coupon can be with the product, attached to the product, with the advertisement and can be sent by mail.

  • Price Packs: These are special packs given by the company in which consumers are offered a saving on the regular purchase.

  • Premiums: These are merchandise offered at a lower cost or free as an incentive to purchase a particular product. A premium is a product accompanied inside or on the package. A free in the mail premium is mailed to consumers when they send a proof of package.

  • Patronage Awards: These are the value in cash or in other forms that are proportional to patronage of a certain vendor or group of vendors.

Sales Promotions Directed at Trade Partners

Following are some of the popular trade promotion schemes used

  • Sales Competition: In this case, the dealers are motivated to participate in the trade promotion program with a reward program linked to their performance. For dealers, sales competition is arranged, prizes are announced or special offers are made if they show substantial progress in sales.

  • Boosters for Dealers: In a bid to reduce its mounting inventories and boost the sagging morale of its dealers, companies offer two per cent discount to dealers on purchase of a truck if payment is made up-front.

  • Price Offs: If the tradesman purchases a certain number of units within an announced period, he obtains a straight price off or discount on the quantity purchased. This motivates the dealer to buy larger quantities and also support a new product.

  • Free Merchandise: These are the free goods given to intermediaries who buy a desired quantity of the product. The intermediaries are free to sell these goods or use for personal consumption.

  • Allowances: Many companies provide different kinds of trade allowances in the form of advertising allowances and display allowances. The manufacturer bears the cost of store advertising and sometimes rewards for displaying his product or brand in the store.

  • Tradeshows and Conventions: These are the tradeshows and conventions organised by industry associations and government

Sales Promotions Directed at Sales Force

The other key player in product and brand promotion is the sales force, which also carries the message and the product to the end consumer. Companies organise sales force promotion programs to motivate them to support the company’s offerings.

The tools used for sales force promotion include

  • Sales and contests
  • Conferences
  • Seminars
  • Higher commissions
  • Bonus
  • International tours

Many of the trade promotion tools are also used for sales force promotion. In insurance sector there is a huge emphasis on sales staff training as the staff deals directly with customers. The thrust is upon making the sales force well-versed with the present promotional techniques, so as to enable them in making an effective sale.

Reference

  • V. S. Ramaswamy, S. Namakumari; 2009; Marketing Management; MacMillan Publishers Pvt Ltd.
  • Kotler, Keller, Koshy, Jha; 2009; 13th Edition; Marketing Management: A South Asian Perspective.

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