Sales Promotion includes all activities which promote sales of the company’s product and services. vii. Development of the effective distribution systems. ix. The wholesalers and retailers who have a variety of goods in their shop can sell more efficiently and easily to customers. The supplier provides his own personnel to explain the benefits of the displayed products to the customers. Buy Bigger 9. It helps marketers to realize a variety of objectives. 55/- whereas the MRP is Rs. The objectives of sales promotion are described below in detail: Today, in the scientific age of specialization, sales promotion has become a vital need. They should build confidence in the mind of customer about the product through promotion and personal selling. Reminding the consumers of their past satisfaction will persuade them to stay with the product and prevent them from shifting to competitors. Or another variant could be that he buys three packets and gets the fourth one free. To encourage consumers to buy from the promoters, a stainless steel teaspoon was given with only one cake of ‘Palmolive’ soap; subsequent cakes were sold on a marginal discount. The main objective of this research is to investigate the influence of sales promotion and physical surroundings that is situational factor on consumer buying behavior. Sales increased substantially in March, and informed people say, it almost doubled by the end of the April 1990. Sales promotion is the avenue to reach the product or the brand in the mind of the prospective consumers and to develop a brand image with favourable attitude towards the product. To combat or offset competitors' marketing efforts. Encourage Repeat Purchase: Encourage Dealers to Participate in Display and Sales Contests, Objective # 7. The marketer or producer try to fulfil all the requirements, as desired by the consumers. 4. It would be more appropriate to choose selected markets with high potential. For this purpose, it provides suitable knowledge for recollection. The main objective of a commercial concern is to increase its sale. Section 24.4 describes how promotions affect sales, and discusses the sources of incremental volume associated with a promotion. Encourage Dealers to Participate in Display and Sales Contests: 6. Sales quotas serve as the basis for preparing the budget for advertising and sales promotion. Regular users of coffee, or even occasional users, responded with enthusiasm, because not only the contest was exciting, the prize money too, were quite substantial. Many retailers use the display material provided by suppliers very selectively due to the danger of producing a cluttered and uncoordinated retailing environment. 200,000. To create goodwill among the prospective customers, 4. Everything you need to know about the objectives of sales promotion. Deflect Customer’s Attention from Price  7. Supporting and supplementing the advertising and personal selling efforts. 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. This work is done mainly by advertisement but other promotional activities help achieve this objective. Customers and middlemen are offered attractive discounts and free gifts along with their products to induce the persons to purchase their products. For example, the cold drinks companies start prize winning schemes to maintain their sales. For example, people who buy spices rarely, or in small quantities, decide to buy more often or in larger volume if they received free recipes in return. 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. Ready stock should be made available through different outlets, approachable and accessible to the target consumers. Delayed-value promotions that may require multiple purchases are also quite effective. Informing is to educate the consumers about the product. Therefore, people would tend to believe his statements. An important objective of sales promotion is to encourage re-seller participation in displays and contests. To encourage repeat purchase, extra benefit offers are particularly effective. One way to increase product consumption is by identifying new uses for the brand. 8. To Increase Sales Volume 2. Colgate offers 25gm extra on their 200gm pack at the same price. 7. It is the focus of market-driven companies to develop and sustain relationships with the consumers. Sampling – Consumers are given some quantity of a product for no charge to induce trail. store ‘club’ cards, or continuity programmes such as collecting a dinner service. iv. Sales promotion objectives are consistent with marketing objectives. Persuading generally becomes the main promotion goals, when the product enters the growth stage of its life cycle. “Sales promotion is referred to the promotional activities other than personal selling, advertising and publicity, which stimulate consumer purchasing and dealer effectiveness.”. As these fittings are large and attractive, and kept at conspicuous places, they attract the attention of the customers. Aggressive advertising and sales promotion campaigns back up new product launches by competing companies. The number of customers visiting must be large enough to cover the costs involved. Everything about a contest, whether display or sales, should convey the idea that it is something special. As stated by Schultz and Robinson in ‘Sales Promotion Management’ the objectives should be – a) Specific, b) Clean and concise, c) Practical and realistic, d) Measurable, e) Affordable and f) Attainable. This is called ‘mal-redemption’. Usually free samples are given to introduce new products to customers. Companies, who have a small market share, cannot match the substantial advertising budgets of market leaders in the same industry. He also spends lot of money on advertising, but the product may not sell by itself to achieve his target. v. Refunds or Rebates – Refunds also known as rebates are offers by the manufacturer to return a portion of the product purchase price, usually after the consumer supplies some proof of purchase. Product’s design, colour, packaging and price, all communicate something. The idea being that the customer would be attracted towards purchasing the product. The promotional programmes may be consumer -oriented or trade-oriented. Generally, proof of purchase (may be in the form of empty packs) is required to participate in the competition, but not necessarily so. Consumers get points on every purchase and get the offers from the companies as points accumulate. 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. It shall attempt to generate a bondage between the awareness and perception of the consumers and the personality of the brand and its features. Under the situation, the organisation may decide to dispose of the excess stock in a short period of time, introducing different promotional schemes to attract the prospective consumers to sell the products immediately. 24.3 Objectives of Sales Promotion You have learnt that the main objective of sales promotion is to increase sales. To introduce new products or services: Sales promotion is often used to motivate prospective … Sales promotion has a capability to complement and supplement the advertising functions of the marketing. The promotional activity may be such that it does not directly hint at a purchase, but just a free trial. Launch New Product and Increase Trial  3. Big discounts may be as old as the trade industry, but it’s an evergreen method of increasing sales volume. iv. This objective may also be accomplished for certain consumer durable goods in case of trade segment. 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. The main objective of a commercial concern is to increase its sale. The products are kept in the special racks or stands provided by the suppliers. For example, Hindustan Lever Ltd., offering with their Brooke Bond BRU 50 gm coffee packs an attractive glass bowl. Generally these displayed items generate a higher sales volume. Usually additional customers are won away from other firms. In case of competition from substitutes having superior technology, promotional activities cannot help much. 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. Small budget companies, who cannot afford sustained advertising expenditures to introduce new products, or match the competitive advertising blitz, find sales promotions to be more cost effective and helpful in generating sales volume. viii. It is regarded as an investment in today’s business. (3) To keep the Memory Alive – One of the objectives of the sales promotion is to keep the memory of the product alive in the minds of the present customers. Promotional activities increases the sales by changing the elasticity of demand of the product through various techniques i.e. 7. Motivate dealers to stock and sell more. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. (vi) To Induce Present Customers to Buy More: Sales promotion devices are also used to induce present customers to buy more. There are three main objectives of sales promotion: Informative promotion tends to convert existing needs into want. So, many companies now use personalities selectively to avoid overexposure. 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. To Increase Goodwill 8. They may read not only the headline but also the copy, and may get exposed to the advantages and benefits associated the brand. money-off vouchers, trade-in allowances. To introduce new products ii. Encourage dealers to participate in display and sales contests, xv. Having persuaded customers to enter the shop, they could now be encouraged to buy by presenting the merchandise in such a manner as to create the purchase instinct in the customer’s mind; e.g. also gives a hint to sales promotion objectives, the main objective being lifting the sales temporarily. They should, therefore, be informed of the new product and told that the new product works better than all similar existing products. Share Your PPT File, Learn about the Sales Promotion Objectives, Sales Promotion Objectives – Top 6 Objectives, Sales Promotion Objectives – 8 Main Objectives. A business firm always adopts sales promotion … ADVERTISEMENTS: a. ‘Nescafe’ as proof of purchase. To do that, you could look into your sales reps’ commission packages and provide a heightened incentive to achieve the objective. discounts are offered, com munications of sales promoti ons and objectives of the promotion. Couponing – Coupon is one of the oldest and most effective sales promotion tools used by marketers. Objective # 2. Sales promotional devices at customers level include samples, coupons, demons­tration, contacts, money refund offers, premium offer, free trials etc. These products are such that customers, if left on their own, would be reluctant to spend money and give them a try. A free sample is generally welcome to almost all consumers and increases the probability of trial and, in some cases, purchase as well. To Assist a Salesman in Selling 7. 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. For the constant sales-increase, it is better to determine the sales promotion programmes on the basis of changing policies and to implement them with new strategies. The producer generally provides information regarding the quality, uses, different uses of the products and the price, etc. Objectives of Sales Promotion. During Super Bowl weekend, Pepsi introduces a … This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. Encourage Dealers to Participate in Display and Sales Contest  6. There should be reliable information about the competitive moves, and the inventory holding costs should not be high. This means higher margins to the retailer. Share Your Word File Sales promotion is a marketing strategy where the product is promoted using short-term attractive initiatives to stimulate its demand and increase its sales. It also stimulates interest into a new product. Consumers develop a new reference price for the product and the increase does not appear to be as high as it was perceived earlier. The reasons for the growth of sales promotion is mainly due to: 2. Price increase can often have negative effect on sales. Sales promotion means and includes all the activities that are performed by a producer, a dealer or a businessman to increase his sales. The basic purpose of sales promotion is to increase the sales of a product by creating demand. Gifting. Targeting a specific market segment, or. To influence consumers behavioural patterns. The information about these competitions is usually printed on the packs. A firm that feels threatened would like to protect its loyal customers from switching to the new competing brand. vii. Sales promotion is usually targeted toward either of two distinctly different markets. The purpose of sales promotion is to increase sales. This free access may include receiving product information via email. (something more for the same price) Sales promotion is an important instrument in marketing to accelerate the marketing effort. They should, therefore, be informed of the new product and told that the new product works better than all similar existing products. Sales promotion encourages consumers also to buy the product. To Develop Preferences and Convictions of Buyers. To reduce seasonal decline, create the promotional activities help in maintaining the sales of the product in slack season, 6. Sales promotions are used to stimulate purchasing and sales by way of giving incentives or offers, and the objectives are to increase sales by informing […] 11. Key Points. Offer Details: The basic purpose of sales promotion is to increase the sales of a product by creating demand. One possibility, though, cannot be ignored that these brand switchers sometimes get exposed to better products and some of them may become repeat purchasers, almost every sales promotion that offers immediate value at the time of purchase may contribute to increasing sales-volume. These trade promotions are targeted to marketing intermediaries such as – wholesalers and retailers. For example, racks provided by toothbrush suppliers, dry-battery stands, glass case for watches, etc. 55. The popularity of the institution grows when customers are offered free gifts and prices are reduced after a fixed time. Sales promotion keeps and memory of the product alive in the minds of the customers. 2. There were 1565 prizes to be won. On the other hand, trade-oriented promotions inspire the middlemen like dealers, distributors, wholesalers, retailers to work hard to gear up their business in order to reap more profit. 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. It helps marketers to realize a variety of objectives. In these conditions, sales promotion devices are started to counter the other sellers’ plans. Either the number of transactions is increased or the size of the average sale is increased. In order to provide better facilities the organisations should concentrate on effective distribution system and should establish scientific logistic framework to satisfy the demand of the consumers. Sales promotion is a $300 billion—and growing— industry. One of the first objectives of trade promotions is to increase the distribution level of a company. Consumers desire superior customer value, which includes quality products and service that are competitively priced. Free premiums are usually free gifts or merchandise included in the product package. Sometimes, two or more products share and fund a joint in-store promotion. For them, it would be appropriate to choose selected markets with high potential. This situation is generally known as ‘sales-promotion-trap’. vi. A diverse collection of incentive tools, mostly short term, designed to stimulate quicker &/or grater purchase of particular products/services by consumers or the trade. Promoters called on about half a million households in this city. Some products are used in a particular season. Consumers often use samples that are distributed free, with or without a coupon, to introduce a new product or induce trial of even an existing product. Repeat Purchase 12. In particular conditions an institution follows sales promotion policies so that the popularity of the institution may increase. Ultimately, they enhance the public image of the firm. Launch a new product; Attract new clients; Stay competitive; Make existing customers buy more; Sell during off-season; Run clearance campaigns; Although the main goal of sales promotion is to increase demand in a particular product, you can reach several important goals. Then, the hotel operator needs to come up with a promotion that can coincide with the event, ultimately allowing them to earn an influx of bookings that they may not otherwise have had. (1) Providing Information – Promotion is an exercise in information, persuasion and influence. To attract new customers and retain the existing ones iii. It shall develop a strong positive impact on the purchase decision, a preference for the brand for the extra value offered. Displays attract consumer attention who, are passers-by, or window shopper, displays serve them as reminders, encourage unplanned purchases, and increase store traffic. Sales promotion has a capability to complement and supplement the advertising functions of the marketing. This can be achieved by a number of activities; some of them are listed below: (a) Increasing the number of transactions: (i) Sales promotion methods can be used to persuade more people into the store and convince them to buy. The various objectives of sales promotion can be summed up as follows:-, 1. viii. These objectives are for both marketers and traders. Spend one hour each day prospecting to find good-fit leads. In Order to Dispose off Excessive Inventory: In some situations, organisations may feel that excessive stock should be disposed off in a quicker fashion in order to allow the fresh stock to come in. Introducing new arrivals and creating platform/awareness for newly launched products. 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 product may be entirely new and customers may have little knowledge about them. Although it is expensive sampling is generally considered the most effective way to generate trial. 7. Sales promotion is often referred to by the names of “Extra Purchase-Value” (EPV) and “Below-the-line-selling”. The basic objective of sales promotion, is to develop good relationship with the customers and to establish a better understanding. 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. Different lucrative offers are launched to generate a favourable attitude of the consumers. Coupons: The distribution of coupons is a common sales promotion tactic to encourage customer sales. A firm that feels threatened would like to protect its loyal customers from switching to the new competing brand. Sales promotion objectives should be specific, measurable, clear and concise, practical and realistic, affordable and attainable. It should be adapted to their needs and requirements. It is also difficult for smaller companies to get proper shelf-space in retail shops without offering incentives to the re-sellers, or encourage trail by consumers without offering some immediate or extra benefit. TOS4. When the coupon would not be available, the new price does not appear to be so high relative to the new price of the product. More the objective of sales promotion is to improve are attached and sold for a new brand, product image department stores, etc sellers and. 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