117 Sales Promotions

Learn about different types of sales promotions companies use to get customers to buy their products.

Understand the different types of sales promotions companies use with their business customers.

Understand why sales promotions have become such an integral part of an organizations promotion mix.

Differentiate between push and pull strategies.

Sales promotions are activities that supplement a companys advertising, public relations, and professional selling efforts. They create incentives for customers to buy products more quickly and make larger purchases. Sales promotions are often temporary, but when the economy is weak, sales promotions become even more popular for consumers and are used more frequently by organizations.

Samples, coupons, premiums, contests, and rebates are examples of consumer sales promotions. Do you like free samples? Most people do. A freeallows consumers to try a small amount of a product so that hopefully they will purchase it. The strategy encourages trial and builds awareness. You have probably purchased a product that included a small free sample with itfor example, a small amount of conditioner packaged with your shampoo. Have you ever gone to a store that provided free samples of different food items? Although sampling is an expensive strategy, it is usually very effective for food products. People try the product, and the person providing the sample tells them about the product and mentions any special prices for it.

In many retail grocery stores, coupons are given to consumers with the samples.provide an immediate price reduction off an item. The amount of the coupon is later reimbursed to the retailer by the manufacturer. The retailer gets a handling fee for accepting coupons. When the economy is weak, more consumers cut out coupons and look for special bargains such as double coupons and buy-one-get-one-free (BOGO) coupons. They may also buy more store brands.

Consumers cut out and use more coupons in a weak economy.

Carol Pyles Coupon Pile Stock Pile CC BY 2.0.

While many consumers cut coupons from the inserts in Sunday newspapers, other consumers find coupons online or on their cell phones., including coupon machines placed next to products in stores, encourage consumers to buy a brand or product immediately. When a consumer sees a special display or can get a coupon instantly, manufacturers hope the sales promotion increases sales. Stores may also provide coupons for customers with loyalty cards to encourage them to select particular brands and products.

Mobile marketing and the Internet provide consumers in international markets access to coupons and other promotions. In India, the majority of coupons used are digital, while paper coupons have the largest share in the United States. Over 80 percent of diapers are purchased with coupons; imagine how much easier and less wasteful digital coupons scanned from a mobile phone are for both organizations and consumers.

Other sales promotions may be conducted online and include incentives such as free items, free shipping, coupons, and sweepstakes. For example, many online merchants such as Shoe Station and Zappos offer free shipping and free return shipping to encourage consumers to shop online. Some firms have found that the response they get to their online sales promotions is better than response they get to traditional sales promotions.

Another very popular sales promotion for consumers is a premium. Ais something you get either for free or for a small shipping and handling charge with your proof of purchase (sales receipt or part of package). Remember wanting your favorite cereal because there was a toy in the box? The toy is an example of a premium. Sometimes you might have to mail in a certain number of proofs of purchase to get a premium. The purpose of a premium is to motivate you to buy a product multiple times. What many people dont realize is that when they pay the shipping and handling charges, they may also be paying for the premium.

Contests or sweepstakes also attract a lot of people.are sales promotions people enter or participate in to have a chance to win a prize. The Publishers Clearing House Sweepstakes and the Monopoly Game at McDonalds are both examples. The organization that conducts the sweepstakes or contest hopes you will not only enter its contest but buy some magazines (or more food) when you do.

The Fantanas are back! Watch the video for a contest being conducted by Fanta soft drinks. As with other sales promotion tools, the idea is to get you to buy a product and more specifically to make repeat purchases.

are sales promotions designed to get repeat business. Loyalty programs include things such as frequent flier programs, hotel programs, and shopping cards for grocery stores, drugstores, and restaurants. Sometimes point systems are used in conjunction with loyalty programs. After you accumulate so many miles or points, an organization might provide you with a special incentive such as a free flight, free hotel room, or free sandwich. Many loyalty programs, especially hotels and airlines, have partners to give consumers more ways to accumulate and use miles and points.

are popular with both consumers and the manufacturers that provide them. When you get a rebate, you are refunded part (or all) of the purchase price of a product back after completing a form and sending it to the manufacturer with your proof of purchase. The trick is completing the paperwork on time. Although different types of sales promotions work best for different organizations, rebates are very profitable for companies because many consumers forget or wait too long to send in their rebate forms. Consequently, they do not get any money back. Rebates sound great to consumers until they forget to send it back.

In business-to-business (B2B) marketing, sales promotions are typically called trade promotions because they are targeted to channel members who conduct business or trade with consumers.include trade shows, conventions, event marketing, trade allowances, training, and special incentives given to retailers to market particular products and services, such as extra money, in-store displays, and prizes.

Trade shows are one of the most common types of sales promotions in B2B markets. Ais an event in which firms in a particular industry display and demonstrate their offerings to other organizations they hope will buy them. There are typically many different trade shows in which one organization can participate. Using displays, brochures, and other materials, representatives at trade shows can identify potential customers (prospects), inform customers about new and existing products, and show them products and materials. Representatives can also get feedback from prospects about their companys products and materials and perhaps about competitors.

Companies also gather competitive information at trade shows because they can see the products other firms are exhibiting and how they are selling them. While approximately 75 percent of representatives attending trade shows actually buy the product(s) they see, 93 percent of attendees are influenced by what they see at the trade shows. However, only 20 percent of organizations follow up on leads obtained at trade shows and only 17 percent of buyers are called upon after they express interest in a particular companys products (Tanner Pitta, 2009).Figure 11.13is an example of a booth display at a trade show showcasing the Korean electronics firm Samsung. Trade shows can be very successful, although the companies that participate in them need to follow-up on the leads generated at the shows. With changing technology, Webinars are being used to reach businesses that may not be able to attend trade shows. Follow-up after a Webinar is also essential.

, or meetings, with groups of professionals also provide a way for sellers to show potential customers different products. For example, a medical convention might be a good opportunity to display a new type of medical device. Sales representatives and managers often attend conventions to market their products.

Intuitive Surgical is the maker of the da Vinci robot, a new type of technology used to make surgeries easy to perform and less invasive. Intuitive Surgical often demonstrates the robot at surgical conventions.

Docor Comunicacion Da Vinci robot CC BY-NC-ND 2.0.

, which are often held by manufacturers or vendors, provide incentives for salespeople to increase their sales. Often, the contests focus on selling higher-profit or slow-moving products. The sales representative with the most sales of the product wins a prize such as a free vacation, company recognition, or cash.

give channel partnersfor example, a manufacturers wholesalers, distributors, retailers, and so forthdifferent incentives to push a product. One type of trade allowance is an(money) to advertise a sellers products in local newspapers. An advertising allowance benefits both the manufacturer and the retailer. Typically, the retailer can get a lower rate than manufacturers on advertising in local outlets, saving the manufacturer money. The retailer benefits by getting an allowance from the manufacturer.

Another sales promotion that manufacturers, such as those in the tool or high tech industries, offer businesses isto help their salespeople understand how the manufacturers products work and how consumers can be enticed to buy them. Many manufacturers also provide in-storeto show a channel partners customers how products work and answer any questions they might have. Demonstrations of new video game systems and computers are extremely popular and successful in generating sales.

, such as a tool, television, or other product produced by the manufacturer, can also be used to get retailers to sell products to consumers. In other words, a manufacturer of televisions might offer the manager of a retail electronics store a television to push its products. If a certain number of televisions are sold, the manager gets the television. Have you ever been to an electronics store or a furniture store and felt like the salesperson was pushing one particular television or one particular mattress? Perhaps the salesperson was getting, or a cash incentive from the manufacturer topusha particular item. The push to sell the item might be because there is a large amount of inventory of it, it is being replaced by a new model, or the product is not selling well.Figure 11.15 Examples of Sales Promotionsrecaps the different types of sales promotions designed for both consumers and businesses.

Figure 11.15Examples of Sales Promotions

Businesses must also decide whether to use a push strategy, a pull strategy, or both push and pull strategies. Ainvolves promoting a product to businesses (middlemen), such as wholesalers and retailers, who thenpushthe product through the channel promoting it to final consumers. Manufacturers may set up displays in retail outlets for new products or provide incentives such as price discounts to the retailer so the retailer can promote or push the product to consumers.

Companies use awhen they target final consumers with promotions. In other words, a company promotes it products and services to final consumers topullconsumers into the stores or get the consumers asking for the product. If a company sends coupons to the consumers, hopefully the consumers will take the coupons (sales promotion) to the store and buy the product. A manufacturer promotes its new product on television to consumers and places coupons in the newspaper inserts, hoping consumers will demand the product. Their pull causes wholesalers and retailers to buy the product to try to meet the demand.

Many manufacturers use both a push strategy and a pull strategy, promoting their products and services to both final consumers and their trade partners (e.g., retailers and wholesalers).Figure 11.16 A Push versus a Pull Strategyshows how push strategy differs from a pull strategy.

Figure 11.16A Push versus a Pull Strategy

Companies use sales promotions to get customers to take action (make purchases) quickly. Sales promotions increase the awareness of products, help introduce new products, and often create interest in the organizations that run the promotions. Coupons, contests, samples, and premiums are among the types of sales promotions aimed at consumers. Trade promotions, or promotions aimed at businesses, include trade shows, sales contests, trade allowances, and push money.

What are the objectives of sales promotions?

Identify and provide an example of three sales promotion tools targeted at consumers.

Identify and provide an example of three sales promotion tools targeted at businesses.

Explain the difference between a push strategy and a pull strategy.

Tanner, J. F. Jr., and Dennis Pitta, Identifying and Creating Customer Value (special session presentation, Summer Educators Conference, Chicago, 2009).

This is a derivative ofPrinciples of Marketingby a publisher who has requested that they and the original author not receive attribution, which was originally released and is used under CC BY-NC-SA. This work, unless otherwise expressly stated, is licensed under aCreative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

1.4 Themes and Organization of This Book

1.5 Discussion Questions and Activities

2.2 Components of the Strategic Planning Process

2.3 Developing Organizational Objectives and Formulating Strategies

2.4 Where Strategic Planning Occurs within Firms

2.5 Strategic Portfolio Planning Approaches

2.6 Discussion Questions and Activities

Chapter 3: Consumer Behavior: How People Make Buying Decisions

3.1 Factors That Influence Consumers Buying Behavior

3.2 Low-Involvement Versus High-Involvement Buying Decisions and the Consumers Decision-Making Process

3.3 Discussion Questions and Activities

Chapter 4: Business Buying Behavior

4.1 The Characteristics of Business-to-Business (B2B) Markets

4.4 Stages in the B2B Buying Process and B2B Buying Situations

4.5 International B2B Markets and E-commerce

4.7 Discussion Questions and Activities

Chapter 5: Market Segmenting, Targeting, and Positioning

5.1 Targeted Marketing versus Mass Marketing

5.3 Selecting Target Markets and Target-Market Strategies

5.4 Positioning and Repositioning Offerings

5.5 Discussion Questions and Activities

6.3 Types of Business-to-Business (B2B) Offerings

6.4 Branding, Labeling, and Packaging

6.6 Discussion Questions and Activities

Chapter 7: Developing and Managing Offerings

7.1 The New Offering Development Process

7.2 Managing New Products: The Product Life Cycle

7.3 Discussion Questions and Activities

Chapter 8: Using Marketing Channels to Create Value for Customers

8.1 Marketing Channels and Channel Partners

8.3 Functions Performed by Channel Partners

8.6 Discussion Questions and Activities

Chapter 9: Using Supply Chains to Create Value for Customers

9.2 Demand Planning and Inventory Control

9.4 Track and Trace Systems and Reverse Logistics

9.5 Discussion Questions and Activities

Chapter 10: Gathering and Using Information: Marketing Research and Market Intelligence

10.2 Steps in the Marketing Research Process

10.3 Discussion Questions and Activities

Chapter 11: Integrated Marketing Communications and the Changing Media Landscape

11.1 Integrated Marketing Communications (IMC)

11.2 The Promotion (Communication) Mix

11.3 Factors Influencing the Promotion Mix, Communication Process, and Message Problems

11.4 Advertising and Direct Marketing

11.8 Discussion Questions and Activities

Chapter 12: Public Relations, Social Media, and Sponsorships

12.1 Public Relations Activities and Tools

12.3 Discussion Questions and Activities

13.1 The Role Professional Salespeople Play

13.2 Customer Relationships and Selling Strategies

13.4 Ethics in Sales and Sales Management

13.5 Integrating Sales and Marketing

13.6 Outsourcing the Sales Function

13.7 Discussion Questions and Activities

Chapter 14: Customer Satisfaction, Loyalty, and Empowerment

14.4 Ethics, Laws, and Customer Empowerment

14.5 Discussion Questions and Activities

Chapter 15: Price, the Only Revenue Generator

15.1 The Pricing Framework and a Firms Pricing Objectives

15.2 Factors That Affect Pricing Decisions

15.4 Discussion Questions and Activities

16.2 Functions of the Marketing Plan

16.4 Ongoing Marketing Planning and Evaluation

16.5 Discussion Questions and Activities

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Sales Promotion – Encyclopedia – Business Terms

Sales promotion is one level or type of marketing aimed either at the consumer or at the distribution channel (in the form of sales-incentives). It is used to introduce new product, clear out inventories, attract traffic, and to lift sales temporarily.

Sales promotion is one level or type of marketing aimed either at the consumer or at the distribution channel (in the form of sales-incentives). It is used to introduce new product, clear out inventories, attract traffic, and to lift sales temporarily. It is more closely associated with the marketing of products than of services. The American Marketing Association (AMA), in its Web-based Dictionary of Marketing Terms, defines sales promotion as media and nonmedia marketing pressure applied for a predetermined, limited period of time in order to stimulate trial, increase consumer demand, or improve product availability. Business pundits and academic students of business have developed almost fancifully sophisticated views of sales promotion. In down-to-earth terms it is a way of lifting sales temporarily by appealing to economic motives and impulse-buying behavior. The chief tools of sales promotion are discounts (sales), distribution of samples and coupons, the holding of sweepstakes and contests, special store displays, and offering premiums and rebates. All of these techniques require some kind of communication. Thus sales promotion and advertising are difficult to distinguish.

The need for promotion arises from the intensity of competition. Sellers must somehow attract customers attention. In the open markets of old (and farmers markets of today), sellers did and do this by shouting, joking with customers, and sometimes by holding up a squealing piglet for everyone to see. Priya Raghubir and his coauthors, writing inCalifornia Management Review, identify three faces of consumer promotions: these are information, economic incentive, and emotional appeal. Information may take the form of advertising the availability of something, incentives are offered in the form of discounts, and emotional appeals are made by displays and, of course, by the low price itself.

Precisely because sales promotions must provideincentiveswhether to the distribution channel, the companys own sales people, or to the consumerthey cost money by definition and must produce additional volume to pay for the expenditures. A grand sale that clears out the inventory but, with added advertising costs factored in, reduces margin too isa failure. Sales promotions therefore must be carefully calibrated to achieve the purpose. Holding promotions too frequently will habituate customers to buy only when promotions are in effect. Avoiding promotions altogether will let competitors draw customers away. Alas, business never fails but to challenge the participant�.

Craig Endicott and Kenneth Wylie, writing forAdvertising Agein the magazines 62nd annual Agency Report, indicate a continued shift of revenues in advertising from traditional to new forms of media. They label the new forms as marketing services and comment as follows: Marketing servicesidentified as all forms of interactive, sales promotion and direct marketing in this reportgrew 11.3% to $7.66 billion in revenue in the U.S. [in 2005]; traditional advertising and its media component advanced to $12.02 billion, a 5.1% advance that was slightly stronger than last year. The growth of sales promotion, a significant portion of total marketing services expenditures, is no doubt in part due to the proliferation of media channels by cable, the availability of the Internet to channel direct marketing messages, and simply the fact that advertising has become so ubiquitous it has become less effective: people tune (or mute) it out.

Consumer sales promotions are steered toward the ultimate product userstypically individual shoppers in the local marketbut the same techniques can be used to promote products sold by one business to another, such as computer systems, cleaning supplies, and machinery. In contrast, trade sales promotions target resellerswholesalers and retailerswho carry the marketers product. Following are some of the key techniques used in consumer-oriented sales promotions.

A consumer price deal saves the buyer money when a product is purchased. The main types of price deals include discounts, bonus pack deals, refunds or rebates, and coupons. Price deals are usually intended to encourage trial use of a new product or line extension, to recruit new buyers for a mature product, or to convince existing customers to increase their purchases, accelerate their use, or purchase multiple units. Price deals work most effectively when price is the consumers foremost criterion or when brand loyalty is low.

Buyers may learn about price discounts either at the point of sale or through advertising. At the point of sale, price reductions may be posted on the package, on signs near the product, or in storefront windows. Many types of advertisements can be used to notify consumers of upcoming discounts, including fliers and newspaper and television ads. Price discounts are especially common in the food industry, where local supermarkets run weekly specials. Price discounts may be initiated by the manufacturer, the retailer, or the distributor. For instance, a manufacturer may pre-price a product and then convince the retailer to participate in this short-term discount through extra incentives. For price reduction strategies to be effective, they must have the support of all distributors in the channel. Existing customers perceive discounts as rewards and often respond by buying in larger quantities. Price discounts alone, however, usually do not induce first-time buyers.

Another type of price deal is the bonus pack or banded pack. When a bonus pack is offered, an extra amount of the product is free when a standard size of the product is bought at the regular price. This technique is routinely used in the marketing of cleaning products, food, and health and beauty aids to introduce a new or larger size. A bonus pack rewards present users but may have little appeal to users of competitive brands. A banded pack offer is when two or more units of a product are sold at a reduction of the regular single-unit price. Sometimes the products are physically banded together, such as in toothbrush and toothpaste offers.

A refund or rebate promotion is an offer by a marketer to return a certain amount of money when the product is purchased alone or in combination with other products. Refunds aim to increase the quantity or frequency of purchase, to encourage customers to load up on the product. This strategy dampens competition by temporarily taking consumers out of the market, stimulates the purchase of postponable goods such as major appliances, and creates on-shelf excitement by encouraging special displays. Refunds and rebates are generally viewed as a reward for purchase, and they appear to build brand loyalty rather than diminish it.

Coupons are legal certificates offered by manufacturers and retailers. They grant specified savings on selected products when presented for redemption at the point of purchase. Manufacturers sustain the cost of advertising and distributing their coupons, redeeming their face values, and paying retailers a handling fee. Retailers who offer double or triple the amount of the coupon shoulder the extra cost. Retailers who offer their own coupons incur the total cost, including paying the face value. In this way, retail coupons are equivalent to a cents-off deal.

Manufacturers disseminate coupons in many ways. They may be delivered directly by mail, dropped door to door, or distributed through a central location such as a shopping mall. Coupons may also be distributed through the mediamagazines, newspapers, Sunday supplements, or free-standing inserts (FSI) in newspapers. Coupons can be inserted into, attached to, or printed on a package, or they may be distributed by a retailer who uses them to generate store traffic or to tie in with a manufacturers promotional tactic. Retailer-sponsored coupons are typically distributed through print advertising or at the point of sale. Sometimes, though, specialty retailers or newly opened retailers will distribute coupons door to door or through direct mail.

The main difference between contests and sweepstakes is that contests require entrants to perform a task or demonstrate a skill that is judged in order to be deemed a winner, while sweepstakes involve a random drawing or chance contest that may or may not have an entry requirement. At one time, contests were more commonly used as sales promotions, mostly due to legal restrictions on gambling that many marketers feared might apply to sweepstakes. But the use of sweepstakes as a promotional tactic has grown dramatically in recent decades, partly because of legal changes and partly because of their lower cost. Administering a contest once cost about $350 per thousand entries, compared to just $2.75 to $3.75 per thousand entries in a sweepstakes. Furthermore, participation in contests is very low compared to sweepstakes, since they require some sort of skill or ability.

According to the consulting firm International Events Group (IEG), businesses spend over $2 billion annually to link their products with everything from jazz festivals to golf tournaments to stock car races. In fact, large companies like RJR Nabisco and Anheuser-Busch have special divisions that handle only special events. Special events marketing offers a number of advantages. First, events tend to attract a homogeneous audience that is very appreciative of the sponsors. Therefore, if a product fits well with the event and its audience, the impact of the sales promotion will be high. Second, event sponsorship often builds support among employeeswho may receive acknowledgment for their participationand within the trade. Finally, compared to producing a series of ads, event management is relatively simple. Many elements of event sponsorship are prepackaged and reusable, such as booths, displays, and ads. Special events marketing is available to small businesses, as well, through sponsorship of events on the community level.

A premium is tangible compensation that is given as an incentive for performing a particular actusually buying a product. The premium may be given for free, or may be offered to consumers for a significantly reduced price. Some examples of premiums include receiving a prize in a cereal box or a free garden tool for visiting the grand opening of a hardware store. Incentives that are given for free at the time of purchase are called direct premiums. These offers provide instant gratification, plus there is no confusion about returning coupons or box tops, or saving bar codes or proofs of purchase.

Other types of direct premiums include traffic builders, door openers, and referral premiums. The garden tool is an example of a traffic-builder premiuman incentive to lure a prospective buyer to a store. A door-opener premium is directed to customers at home or to business people in their offices. For example, a homeowner may receive a free clock radio for allowing an insurance agent to enter their home and listening to his sales pitch. Similarly, an electronics manufacturer might offer free software to an office manager who agrees to an on-site demonstration. The final category of direct premiums, referral premiums, reward the purchaser for referring the seller to other possible customers.

Mail premiums, unlike direct premiums, require the customer to perform some act in order to obtain a premium through return mail. An example might be a limited edition toy car offered by a marketer in exchange for one or more proofs-of-purchase and a payment covering the cost of the item plus handling. The premium is still valuable to the consumer because he or she cannot readily buy the item for the same amount.

Continuity programs retain brand users over a long time period by offering ongoing motivation or incentives. Continuity programs demand that consumers keep buying the product in order to get the premium in the future. Trading stamps, popularized in the 1950s and 1960s, are prime examples. Consumers usually received one stamp for every dime spent at a participating store. The stamp company provided redemption centers where the stamps were traded for merchandise. A catalog listing the quantity of stamps required for each item was available at the participating stores. Today, airlines frequent-flyer clubs, hotels frequent-traveler plans, retailers frequent-shopper programs, and bonus-paying credit cards are common continuity programs. When competing brands have reached parity in terms of price and service, continuity programs sometimes prove a deciding factor among those competitors. By rewarding long-standing customers for their loyalty, continuity programs also reduce the threat of new competitors entering a market.

A sign of a successful marketer is getting the product into the hands of the consumer. Sometimes, particularly when a product is new or is not a market leader, an effective strategy is giving a sample product to the consumer, either free or for a small fee. But in order for sampling to change peoples future purchase decisions, the product must have benefits or features that will be obvious during the trial.

There are several means of disseminating samples to consumers. The most popular has been through the mail, but increases in postage costs and packaging requirements have made this method less attractive. An alternative is door-to-door distribution, particularly when the items are bulky and when reputable distribution organizations exist. This method permits selective sampling of neighborhoods, dwellings, or even people. Another method is distributing samples in conjunction with advertising. An ad may include a coupon that the consumer can mail in for the product, or it may include an address or phone number for ordering. Direct sampling can be achieved through prime media using scratch-and-sniff cards and slim foil pouches, or through retailers using special displays or a person hired to hand out samples to passing customers. Though this last technique may build goodwill for the retailer, some retailers resent the inconvenience and require high payments for their cooperation.

A final form of sample distribution deals with specialty types of sampling. For instance, some companies specialize in packing samples together for delivery to homogeneous consumer groups, such as newlyweds, new parents, students, or tourists. Such packages may be delivered at hospitals, hotels, or dormitories and include a number of different types of products.

A trade sales promotion is targeted at resellerswholesalers and retailerswho distribute manufacturers products to the ultimate consumers. The objectives of sales promotions aimed at the trade are different from those directed at consumers. In general, trade sales promotions hope to accomplish four goals: 1) Develop in-store merchandising support, as strong support at the retail store level is the key to closing the loop between the customer and the sale. 2) Control inventory by increasing or depleting inventory levels, thus helping to eliminate seasonal peaks and valleys. 3) Expand or improve distribution by opening up new sales areas (trade promotions are also sometimes used to distribute a new size of the product). 4) Generate excitement about the product among those responsible for selling it. Some of the more common forms of trade promotionsprofiled belowinclude point-of-purchase displays, trade shows, sales meetings, sales contests, push money, deal loaders, and promotional allowances.

Manufacturers provide point-of-purchase (POP) display units free to retailers in order to promote a particular brand or group of products. The forms of POP displays include special racks, display cartons, banners, signs, price cards, and mechanical product dispensers. Probably the most effective way to ensure that a reseller will use a POP display is to design it so that it will generate sales for the retailer. High product visibility is the basic goal of POP displays. In industries such as the grocery field where a shopper spends about three-tenths of a second viewing a product, anything increasing product visibility is valuable. POP displays also provide or remind consumers about important decision information, such as the products name, appearance, and sizes. The theme of the POP display should coordinate with the theme used in ads and by salespeople.

Thousands of manufacturers display their wares and take orders at trade shows. In fact, companies spend over $9 billion yearly on these shows. Trade shows provide a major opportunity to write orders for products. They also provide a chance to demonstrate products, disseminate information, answer questions, and be compared directly to competitors. Related to trade shows, but on a smaller scale, are sales meetings sponsored by manufacturers or wholesalers. Whereas trade shows are open to all potential customers, sales meetings are targeted toward the companys sales force and/or independent sales agents. These meetings are usually conducted regionally and directed by sales managers. The meetings may be used to motivate sales agents, to explain the product or the promotional campaign, or simply to answer questions. For resellers and salespeople, sales contests can also be an effective motivation. Typically, a prize is awarded to the organization or person who exceeds a quota by the largest percentage.

Similarly, push money (PM)also known as spiffsis an extra payment given to salespeople for meeting a specified sales goal. For example, a manufacturer of refrigerators might pay a $30 bonus for each unit of model A, and a $20 bonus for each unit of model B, sold between March 1 and September 1. At the end of that period, the salesperson would send evidence of these sales to the manufacturer and receive a check in return. Although some people see push money as akin to bribery, many manufacturers offer it.

A deal loader is a premium given by a manufacturer to a retailer for ordering a certain quantity of product. Two types of deal loaders are most typical. The first is a buying loader, which is a gift given for making a specified order size. The second is a display loader, which means the display is given to the retailer after the campaign. For instance, General Electric may have a display containing appliances as part of a special program. When the program is over, the retailer receives all the appliances on the display if a specified order size was achieved.

Trade deals are special price concessions superseding, for a limited time, the normal purchasing discounts given to the trade. Trade deals include a group of tactics having a common themeto encourage sellers to specially promote a product. The marketer might receive special displays, larger-than-usual orders, superior in-store locations, or greater advertising effort. In exchange, the retailer might receive special allowances, discounts, goods, or money. In many industries, trade deals are the primary expectation for retail support, and the marketing funds spent in this area are considerable. There are two main types of trade deals: buying allowances and advertising/display allowances.

A buying allowance is a bonus paid by a manufacturer to a reseller when a certain amount of product is purchased during a specific time period. For example, a reseller who purchases at least 15 cases of product might receive a buying allowance of $6.00 off per case, while a purchase of at least 20 cases would result in $7.00 off per case, and so forth. The payment may take the form of a check or a reduction in the face value of an invoice. In order to take advantage of a buying allowance, some retailers engage in forward buying. In essence, they order more merchandise than is needed during the deal period, then store the extra merchandise to sell later at regular prices. This assumes that the savings gained through the buying allowance is greater than the cost of warehousing and transporting the extra merchandise. Some marketers try to discourage forward buying, since it reduces profit margins and tends to create cyclical peaks and troughs in demand for the product.

The slotting allowance is a controversial form of buying allowance. Slotting allowances are fees retailers charge manufacturers for each space or slot on the shelf or in the warehouse that new products will occupy. The controversy stems from the fact that in many instances this allowance amounts to little more than paying a bribe to the retailer to convince him or her to carry your companys products. But many marketers are willing to pay extra to bring their products to the attention of consumers who are pressed for time in the store. Slotting allowances sometimes buy marketers prime spaces on retail shelves, at eye level or near the end of aisles.

The final type of buying allowance is a free goods allowance. In this case, the manufacturer offers a certain amount of product to wholesalers or retailers at no cost if they purchase a stated amount of the same or a different product. The allowance takes the form of free merchandise rather than money.

An advertising allowance is a dividend paid by a marketer to a reseller for advertising its product. The money can only be used to purchase advertisingfor example, to print flyers or run ads in a local newspaper. But some resellers take advantage of the system, so many manufacturers require verification. A display allowance is the final form of trade promotional allowance. Some manufacturers pay retailers extra to highlight their display from the many available every week. The payment can take the form of cash or goods. Retailers must furnish written certification of compliance with the terms of the contract before they are paid. Retailers are most likely to select displays that yield high volume and are easy to assemble.

Boone, Louis E.Contemporary Marketing 2006. Thomson South-Western, 2006.

Cummins, Julian, and Roddy Mullin.Sales Promotion: How to Create, Implement and Integrate Campaigns That Really Work. Kogan Page, 2002.

Endicott, Craig R., and Kenneth Wylie. Agency Report.Advertising Age. 1 May 2006.

Raghubir, Priya, J. Jeffrey Inman, and Hans Grande. The Three Faces of Consumer Promotions.California Management Review. Summer 2004.

Taylor, Derek.Hospitality Sales and Promotion. Butterworth-Heinemann, 2001.

van Heerde, Harold J., Peter S.H. Leeflang, and Dick R. Wittink. Decomposing the Sales Promotion Bump with Store Data. Marketing Science.Summer 2004.

consumer promotion

Actions intended to convince individuals topurchasea good or service. Awill onlyoffera consumer promotion like a reduced price,orbonusoffer for a shortperiodinorderto stimulatedemandfor andawarenessof theproductbeing promoted.

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What Are Some Examples of Personal Selling?

Personal sales representatives sell products and services such as real estate, insurance and cars to consumers, as well as office equipment, supplies and resale goods to business buyers.Personal selling includes direct communication with any consumer or business prospect in an effort to make a sale.

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Personal selling to consumers takes place through retail and direct-to-consumer channels. In retail, sales representatives interact with customers who come to the business in pursuit of products or services. The rep asks questions, listens to buyer concerns and recommends the right product or service solution. In an electronics store, for instance, a seller promotes goods such as televisions, wireless devices and computers. In a furniture store, the rep promotes couches, chairs and tables.

Business sellers promote products and services used by companies for business purposes. Companies buy various office supplies to operate their day-to-day business. They pay for services such as telecommunications and transportation to facilitate important business activities. Trade sellers include manufacturing sales reps and wholesale reps who sell to businesses that purchase goods for resale. A hospital equipment manufacturer relies on sales reps to sell equipment to medical practices. A food producer needs sales reps to meet with wholesale or retail buyers to convince them to carry his goods.

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Consumer Sales Promotion and Methods of Promoti

Price deals are probably the most commonly used promotional techniques.

A price deal for a customer means a reduction in the price of the promoted product and the consumer saves money on purchase.

Colgate fresh energy ice blue gel (Colgate India) 50 gm pack, Rs. 5.50 off on normal price, now available at Rs. 12.50 only.

Price discounts are communicated through POP advertising, window displays, sales people, advertising in newspapers, magazines and TV ads.Such promotions work very well in gaining the attention of consumers, particularly at the point of purchase among similar brands and may also encourage unplanned or impulse buying.

Price pack deals are also called value packs. They can take any of the two forms:

In case of a bonus pack, an additional quantity of the same product is offered free when the standard pack size of the product is purchased at the regular price.

Godrej Colour Gloss triple action shampoo, offers 20% extra free. 100ml +20ml.

Sunsilk shampoo (HLL) 400ml bottle gives 33% more free.

Dettol shaving cream  get 40% extra free.

Bisleri 20% extra free (Bada Bottle, Same price)

The Banded pack is when the marketer develops special packs of the product containing more quantity but the price is proportionately low. This is a method to load the consumer up with the product. This technique is often used to introduce a new large size of the product or to encourage continued usage and also to increase consumption.

The offer is termed as banded pack when 2 or more units of the products are sold at a reduced price compared to the regular price.

Another variation of this technique is buy 1 get 1 free or some similar offer, it could be same for less or more for the same.

The main advantage of this tool is that extra product may encourage increased usage and help sustain the habit. Also among other similar brands, a bonus pack stands out at the point of sale.

Refund is the repayment of total money paid for purchase, while the rebate represents repayment of only part of the money paid for the purchase. Refund offers seems to work very well in guaranteeing the trial of a product or service since there is no risk involved for the customer because of the promise of total refund of the purchase amount.

Refunds and Rebates play an important role in the consumer durable segment because the product price is reduced to a great extent because of the rebate offer.

Taj mahal Tea guaranteed its taste by openly telling the public of its offer that agar chai pasand nahi aaie, toh pure paise vaapas!

After having launched it new product Whisper Ultra Thin, confident about the product quality and confident about offering the promised product, to increase its trail and usage, had started the money back offer.

A coupon entitles a buyer to a designated reduction in price for a product or service. Coupons are the oldest and most widely used form of sales promotions. Coupons bear an expiry date and cannot be redeemed after the cut off date.

Fair and Lovely dark circle removal cream to create more product trials has coupons in the newspapers and magazines which avail you of Rs.10/- off on a 40 gm pack.

Contests and sweepstakes can draw attention to a brand like no other sales promotions technique.A contest has consumers compete for prizes based on skill or ability. Winners in a contest are determined by a panel of judges or based on which contestant comes closest to a predetermined criterion for the contest.

Contests were very often used earlier where people has to write slogans, poems, stories etc. generally I like the product because and the best ones won prizes. But off lately, contests are becoming less and sweepstakes increasing. People are more willing to play on luck rather than participate by showing their abilities.

A sweepstake is a promotion in which winners are determined purely by chance.

Consumers need only to enter their names in the sweepstakes as a criterion for winning. Some popular types of sweepstakes also use scratch-off cards.

Contests and sweepstakes often create excitement and generate interest for a brand, but the problems of administering these promotions are substantial. One problem is that the game itself may become the consumers primary focus, while the brand becomes secondary. The technique thus fails to build long-term affinity for the brand.

Britannia khao world cup jao campaign has taken the market by a swing.

Under the offer you collect points available on Britannia biscuit packets and exchange 100 points for a scratch card, which has various gifts and the 100 world cup tickets. The offer was actually introduced during the last world cup and had shown phenomenal results. Sale increased tremendously; there was an increase in the sales by 25%, claims the company.  So it is being done this year too. This year too the contest is showing good results.

Getting consumers to simply try a brand can have a powerful effect on future decision-making. Sampling is a sales promotion technique designed to provide a consumer with an opportunity to use a brand on a trial basis with little or no risk. Saying that sampling is a popular technique is an understatement. Sampling is particularly useful for new products, but should not be reserved for new products alone. It can be used successfully for established brands with weak market share in specific geographic areas.

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Consumer Sales Promotion Methods

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Consumer & Trade Promotions As Marketing Strategies

Examples of Price Promotion Methods

Consumer sales promotions are discounts and incentives offered to consumers as an inducement to get them to buy. The short-term orientation of sales promotions contrasts longer-term objectives of advertising to build brand awareness. Such promotions are used to generate revenue or cash flow, clear out merchandise, or launch new products. Companies can choose from several common tools, but each one has pros and cons.

Coupons are among the most common types of consumer sales promotions. The major benefit of a coupon is that only the holder can get a discounted price. This allows a company to use discriminatory pricing practices to get higher regular prices from customers who are unaware of the coupon promotion, or are unconcerned about paying the sticker price. You can also attract new customers or get customers to switch with coupons. Difficulty in controlling redemption, costs of administration and distribution, and fraud potential are drawbacks with coupons.

One of the simplest sales promotions is the straightforward percentage or price-off deal. This is where you mark down all products, specific types of products, or a single product by a set dollar amount or a percentage. Products regularly priced at $20 on sale for 25 percent off would have a sale price of $15, for instance. The general objective is to enhance the value proposition by indicating a lower price for the same quality or service. Errors in price adjustments can lead to alienated customers.

Rebates are a crafty sales promotion technique where you actually honor the promotional inducement after the sale is completed. The customer buys an item and submits a rebate application, often including a form, product labels and receipts. Long waits for payout, and the time and costs to prepare and submit applications, lead to a low redemption rate on rebate offers. Thus, companies use them to attract customers, yet dont always have to pay out on the offer.

Contests and sweepstakes are offered to consumers to generate excitement for a company or a new product launch. In some cases, the prize is unrelated to the company offering it. Other times, the prize is the product being promoted, such as with a movie or music album. Contests require acts of skill or accomplishment to win, while sweepstakes are random drawings or entry processes.

Premiums and ad specialties are also considered consumer sales promotions in many instances, Premiums are free gifts or products that consumers get when they buy the product carrying the promotion. Buying a box of cereal and sending in for a free toy is a premium. The free gift is the inducement to buy the original product. An ad specialty is a gift branded with the givers name or logo. Pens, pencils, calendars, mugs and t-shirts are common ad specialties that companies give away to consumers.

Free product samples and trials are an effective sales promotion category. To offset the risk customers might perceive in buying an unfamiliar item, you allow them to try a product or use a product or service before buying. Grocery stores regularly offer consumers free food samples to promote certain brands. Online service providers commonly offer one-week or two-week trials to attract new customers in hopes they will continue with the service after the trial.

University of Dayton: Consumer-Oriented Sales Promotion

University of Delaware: Chapter 18, Promotion Process, Sales Promotion and Publicity, Class Notes

Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. He has been a college marketing professor since 2004. Kokemuller has additional professional experience in marketing, retail and small business. He holds a Master of Business Administration from Iowa State University.

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Consumer Sales Promotions

Sales promotions that are primarily directed at the final consumer normally in the form of an incentive to make a purchase or undertake some other activity.

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