If the promotion objectives have consumer and trade orientation the sales promotion strategies focus on different consumer promotions and trade deal. Securing additional shelf-space and added display, 8. 24.3 Objectives of Sales Promotion You have learnt that the main objective of sales promotion is to increase sales. Objectives Of Sales Promotion. Rapid growth: A decade ago, ad-to-sales promotion ratio was about 40:60, now is like 25:75 & growing. Sales promotion measures help to attract new customers. After the sessions over, they are not demanded any more. While brand awareness is a key promotional objective, a number of other important business objectives are served by promotional activities. Sales promotion secures the following objectives: Sales promotion has a capability to complement and supplement the advertising functions of the marketing. As soon as the company decides to enter the market, all marketing mix elements reinforce the decisions or the position. They induce buyers to purchase a new product. Through this effort push and pull strategy may be effectively introduced. 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. Which type of sales promotion is the men's store is using? Sales promotional tactics include contests, coupons, freebies, loss leaders, point-of-purchase displays, premiums, prizes, product samples, and rebates. The objectives should be stated to specify the desired type of action because the primary effect of a sales- promotion programme is to stimulate some consumer or dealer action. Sales promotion objectives could be either proactive or reactive. The advantage to the supplier is that the budget is known well in advance, the requisite number of prizes being prearranged. In some conditions, they have to start sales promotion plans because competitor sellers also start such plans. To … money-off vouchers, trade-in allowances. Sales promotion is usually targeted toward either of two distinctly different markets. vii. Product developments, offering three products at the cost of two are some of the devices used to encourage customers to buy more. 8. 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. 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. Objectives of Sales Promotion. This is usually an in-store activity. Even if they are aware, their tradition and culture may prevent them from using it unless it is adapted to suit them and such changes are communicated to them effectively. In some cases, the suppliers and retailers collaborate to produce a mutually acceptable point-of-sale display material. Fast Sales Boost. 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. A free sample is generally welcome to almost all consumers and increases the probability of trial and, in some cases, purchase as well. 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. Persuading generally becomes the main promotion goals, when the product enters the growth stage of its life cycle. 9. In the present market condition to face the challenges of increasing competition, the marketers develop different promotional schemes to augment sales to satisfy the need of the prospective consumers. of the product plus some money. To Promote a New Product: In a large and decentralized market, market promotion is an inevitable … Middleman (Distributors and retailers) and consumers offered attractive discounts and free gifts to lure them to purchase more and more. Sales promotion encourages dealers and distributors to sell the product more. One study suggested the following reasons for undertaking actively all forms of sales promotion: 1. Other sale techniques are used to the customers to purchase the product even in the off season. Learning Objective . 5. Content Guidelines 2. 55/- whereas the MRP is Rs. Consumers get points on every purchase and get the offers from the companies as points accumulate. The sales-promotion objectives formulated should reflect the basic contribution that a sales-promotion programme makes in implementing the marketing strategy. Promotional activities increase or help increase the sale by making effective upward change in the elasticity of demand of the product or service through various techniques i.e., by distributing samples, free gifts, purchase premium, discounts etc. Welcome to EconomicsDiscussion.net! For example, a one litre bottle of cola may say Rs 10 off. 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. Such contest should be held infrequently and not become a routine feature, which would reduce their importance and lead to decline in interest. Generally, proof of purchase (may be in the form of empty packs) is required to participate in the competition, but not necessarily so. Informing is to educate the consumers about the product. vi. The techniques may be used which can measure the results easily or may be difficult to measure in a straightforward manner. Bridge between Advertising and Personal Selling: Sales promotion consists of those activities other than personal selling, advertising, and publicity. And since every supplier has his distinct looking stand, the store would lose its consistency in appeal. Speed up the sales of slow moving products, ix. 11. The various objectives of sales promotion can be summed up as follows:-, 1. Sales promotion efforts are necessary to create awareness in the beginning, later on it seeks to develop brand image and product preferences among the buyers so that they may switch over to the company’s product. In the broad sense of the term marketing communication mix includes all the four marketing P’s – Product, Promotion, Packaging and Price. Thus, the per unit purchase price is low enough to be covered by the profit on all extra sales made. (iii) To push stocks of the old brand before the introduction of new model. The promotion objectives relate to the Promotion-mix only and on the sales promotion uses “Pull-Push” strategy while advertising uses “Pull” strategy only. Objective # 6. 2. He does not play any role in designing such activities. Offer Details: The basic purpose of sales promotion is to increase the sales of a product by creating demand. There could be specific incentives, such as ‘get one free on purchase of four.’ Some promotions offer free merchandise or cash refund offer by collecting tokens on purchases of a specified value. The positive aspects and the limitations of the promotions should be scanned properly to attain the pre-set target and to fulfil the desired objectives. a. The inter-purchase interval, that is, the interval between two successive purchases should be long for the consumers. 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. The idea being that the customer would be attracted towards purchasing the product. To keep the memory alive through promotional activities. 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. 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 Advertising and Personal Selling Efforts, – The 3 Fundamental Objectives: Informing, Persuading and Reminding, Objective # 1. To Attract New Customers. Everything about contest, whether display or sales, should convey the idea that it is something special. Sales promotion objectives are consistent with marketing objectives. Share Your Word File The final objective is to encourage customers to return again and again to the store. Sales promotion has a capability to complement and supplement the advertising functions of the marketing. To Develop Preferences and Convictions of Buyers. The promotional tools should be administered and controlled in a well-planned fashion to avoid the hazards and complexities. Either the number of transactions is increased or the size of the average sale is increased. Reminding promotional scheme is used to complete the promotion activities in the mind of consumers. To rate good public image of the product and the organisation, 7. In order to achieve the objectives of the sales promotion, the marketer should be specific regarding the mission to be fulfilled as set by the organisation. Big discounts may be as old as the trade industry, but it’s an evergreen method of increasing sales volume. “Sales promotion is referred to the promotional activities other than personal selling, advertising and publicity, which stimulate consumer purchasing and dealer effectiveness.”. Thirdly, sales promotion is meant to act as a powerful tool of competition. Thus, the price per unit of the product is reduced for the customer. Some promotions offer free merchandize or cash refund offer by collecting tokens on purchases of a specified value. Sales promotion secures the following objectives: 1. 2. There should be reliable information about the competitive moves, and the inventory holding costs should not be high. 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. 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. Following are the Objectives of Sales Promotion: i. These objectives are for both marketers and traders. To Increase the Use By Present Customers: 5. To fascinate new consumers Reminding leads the firms to reinforce the previously satisfactory behaviour of the customer. Also, the supplier can get a decent amount of publicity when he announces the winners and the prizes. Consumer’s dissatisfaction about a particular brand can be removed by aggressive sales promotion programmes. The trial use, through distribution of samples or demonstration may convince the prospects regarding the positive features of the brand introduced. 60, then a coupon with a face value of Rs. Displays serve them as reminders, encourage unplanned purchases and increase store traffic. Stock clearance of slow moving, non-moving, outdated, defective or inferior quality goods. The goodwill can be created by schemes like continuity programmes or store cards. Sales persons persuade consumers to buy products. (b) Increasing the size of the average sale: (i) Promotions can be introduced on high-margin goods, so the overall profitability improves. The reasons for the growth of sales promotion is mainly due to: 2. 7. 2. It supplements and coordinates effort in these two areas. Such schemes are popular in toiletries and drinks. For this purpose, sales promotion plans are started. A number of personal care products, such as shampoos, cosmetics, toilets soaps, or laundry products, such as detergent powders and cakes etc., have been introduced successfully in the last few years. This means higher margins to the retailer. Sales promotion consists of short-term incentives to encourage purchases or sales of a product or service. It would be ‘economical’ for the customers to buy a pack of three as it is available at the price of two packets. Inducing present customers to buy more – Present customers may be induced to buy more by knowing more about a product, its ingredients, and uses. For instance, a promotional scheme allows a customer to try a fee-based online service free for several days. It is used to maintain relationship with the customer. 12. For example, Hindustan Lever Ltd., offering with their Brooke Bond BRU 50 gm coffee packs an attractive glass bowl. Such activities make the product popular and are complementary to press and other media of advertising and personal selling. Some common examples of sales promotion marketing communications include consumer coupons, rebates, prizes, and loss leaders (or items sold at cost or a discount in order to attract business). In this way, the producer arrests the seasonal decline in the demand of his product. Consumer-Oriented Sales Promotion Techniques: Marketers use various sales promotion techniques to meet the objectives. Sales promotion is most effective when it is tailored to the buying behavior of a particular target. Why Sales Promotion Increases Sales. Promoters called on about half a million households in this city. 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. The objectives of sales promotion are described below in detail: Today, in the scientific age of specialization, sales promotion has become a vital need. Some products are seasonal in nature. To reduce the perception of risk associated with the purchase of a product. Reminding leads the firms to reinforce the pre­viously satisfactory behaviour of the customer. The firm may also announce some attractive trade-deals so that the shell space in retail shops is blocked. Companies, who have small market share, cannot match the substantial advertising budgets of market leaders in the same industry. Display is a powerful tool to enhance sales as it attracts the attention of consumers who are passes-by or window-shoppers. For example, the cold drinks companies start prize winning schemes to maintain their sales. Sales promotion encourages consumers also to buy the product. Sales promotion programme should be developed to generate the confidence of the consumers regarding the claims focused. Motivate dealers to stock and sell more. activities make the product popular and increase the demand. Couponing – Coupon is one of the oldest and most effective sales promotion tools used by marketers. Trade promotion: All sales promotion efforts are targeted towards the middlemen to push the product towards the end consumer. Encourage Dealers to Participate in Display and Sales Contest  6. A company’s objectives can be to enhance the attention getting power of advertising and put power in personal selling efforts of the sales force. Basically, the customer provides some proof of purchase along with some money. Sales promotion directed towards the sales people is referred to as sales force promotions. 5 is provided that places the product’s price between Rs. The product may be entirely new and customers may have little knowledge about them. Sales promotions motivate the salesmen to sell more and to sell the full line of products. Price-off reductions are typically offered right on the package through specially marked price packs For example, on Palmolive shaving brush Rs. To accomplish the objective, normally a combination of “push-pull” strategy is used. Generally these displayed items generate a higher sales volume. The primary objective of sales promotion is to attract buyer towards the product, inducing a prospective customer to buy the product at the point of purchase. Objective # 2. Generally, the brand switchers or marginal buyers, who buy when a product is on promotional deal, contribute more toward increasingly sales volume. Sales promotions encourage the customers to try a new product. Deflect Customer’s Attention from Price: Sales Promotion Objectives – Top 7 Objectives: Launch New Products and Increase Trail, Encourage Dealers to Participate in Display and a Few Other Objectives, Sales Promotion Objectives – For both Marketers and Traders, Sales Promotion Objectives – The 3 Fundamental Objectives: Informing, Persuading and Reminding, Sales Promotion Objectives – Educating Customers, Stimulating Sales, Facilitating Co-Ordination, Attracting New Customers, Introducing New Products and a Few Others, Sales Promotion Objectives – 7 Main Objectives: Introduction of New Products, Attracting New Customers, Inducing Present Customers to Buy and a Few Others, Sales Promotion Objectives – 2 Most Important Objectives: Consumer-Oriented Sales Promotion and Trade-Oriented Sales Promotion, Sales Promotion Objectives – Increase in Sales Volume, Stock Clearance, Emphasizing Variety, Tempting Customers, Seeking More Involvement and Introducing New Arrivals, Sales Promotion Objectives – Providing Information, Increase Sales Volume, To Keep the Memory Alive, To Arrest Seasonal Decline, To Induce Middlemen and a Few Others, Sales Promotion Objectives – With Reasons for Growth, Sales Promotion Objectives – Increase Sales Volume, Launch New Product, Increase Trial, Encourage Repeat Purchase and Deflect Customers Attention from Price. Sometimes, the customers have to send the empty packets to the supplier for getting their free products. The space available for displays in retail store and display material, number of displays is limited. 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. Privacy Policy3. One of the first objectives of trade promotions is to increase the distribution level of a company. 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. Share Your PDF File Many companies use show-business personalities to endorse their products. Frequency Programs – One of the fastest growing areas of sales promotion is the use of frequency programs also known as continuity or loyalty programs. Many retailers use the display material provided by suppliers very selectively due to the danger of producing a cluttered and uncoordinated retailing environment. Objective # 4. Determining strategic sales objectives lets you examine which initiatives in the marketplace will give you the desired results. 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. 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. 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 space available for displays in retail stores and in showrooms is limited and expensive depending on the size of the store and display material, number of displays is limited. 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