7 Main Objectives of Sales Promotion

The main objective of sales promotion is to bring about a change in the demand pattern of products and services. Basically, sales promotion has three specific objectives. First, it is meant to provide important marketing information to the potential buyers. The second objective is to convince and influence the potential buyers through persuasive measures. Thirdly, sales promotion is meant to act as a powerful tool of competition. The specific objectives of sales promotion are as follows: a. To introduce new products or services: Sales promotion is often used to motivate prospective consumers to try new products and services. Dealers are also induced to introduce new products and services in the market. Usually, free samples are provided through dealers during such introduction. Similarly, discounts in cash or goods may also be offered to dealers to stock new products or deal with new services. Free samples, trade discounts, cash discounts are basically sales promotion measures. b. To attract new customers: Sales promotion measures also play an important role in attracting new customers for an organisation. Usually, new customers are those persons that are won away from other firms. Samples, gifts, prizes, etc. are used to encourage consumers to try a new brand or shift their patronage to new dealers. c. To induce existing customers to buy more: Sales promotion devices are most often used to induce the existing customers of a firm to buy more. Product development, offering three products at the cost of two, discount coupons, are some of the sales promotion devices used by firms to motivate the existing buyers to buy more of a specific product. d. Helps the firm to remain competitive: Most of the companies undertake sales promotion activities in order to remain in the competitive market. Therefore, in the modern competitive world no firm can escape the responsibility of undertaking sales promotion activities. e. To increase sales in off-seasons: Many products like air-coolers, fans, refrigerators, air-conditioners, cold drinks, room heaters, etc. have seasonal demand. Manufacturers and dealers dealing with such type of goods make every effort to maintain a stable demand throughout the year.

In other words, firms try to encourage the purchase of such goods in off-seasons also. That is the main reason behind discounts and off-season price reductions of such items in the market during slack seasons. f. To add to the stock of the dealers: Dealers like wholesalers and retailers usually deal with a variety of goods. Their selling activity becomes easier when the manufacturer supplements their efforts by sales promotion measures. When a product or service is well supported by sales promotion, dealers are automatically induced to have more of such items.

Objectives of a Sales Promotion

The objectives of a sales promotion are to increase consumer demand, stimulate market demand, and improve product availability. Key Points

Sales promotional tactics include contests, coupons, freebies, loss leaders, point-ofpurchase displays, premiums, prizes, product samples, and rebates. Sales promotions can be directed to consumers, sales employees, or other retailers. To encourage supermarkets and stores to stock and display their products, retailers use sales promotion techniques including deal loaders and trade allowances.

Terms

couponing

The use or distribution of money-saving coupons.

Objectives of a Sales Promotion

Sales promotion is one of the many tools used in a retailers promotional mix. Sales promotional tactics include contests, coupons, freebies, loss leaders, point-of-purchase displays, premiums, prizes, product samples, and rebates. Sales promotion may be referred to as "below the line" or "point of sale." For example, price reductions at the cash register or complimentary gifts with purchases all fall under sales promotional tactics. The objectives of a sales promotion is to increase consumer demand, stimulate market demand, and improve product availability using media and non-media marketing communications. Figure 1
Sales Promotion Techniques

Sales promotions can be directed to consumers, sales employees, or other retailers. Sales and coupons are some of the most common sales promotion tactics to stimulate interest and encourage consumers to purchase products. Reward programs focus on customer retention and

repeat purchases, awarding customers points, miles, or credits for purchases and future redemptions. Besides price reduction and loyalty programs, point-of-purchase displays are a common tactic used by brands to prompt "impulse" customer purchases. For example, chewing gum and candy are often placed next to the register to increase sales of those products. Other promotional tools include coupon booklets, mobile couponing, on-shelf couponing, as well as product signage and packaging, which are strategically placed to encourage immediate customer sales. For new marketing initiatives, brands implement retail "mechanics" such as Buy One, Get One Free Or Three for Two promotions to encourage consumers to buy new market releases. Brands also use sales promotion techniques to encourage supermarkets and stores to stock and display their products. Some of these trade promotion activities are:

Trade allowances - Short-term incentives offered to retailers to stock up on a product. Dealer loaders - Incentives used to persuade retailers to purchase and display a product. Trade contests - Contests used to reward retailers that sell the largest quantity or highest units of a brands product. Training programs - Training instructing dealer employees in selling the brands product. Push money (also known as "spiffs") - Extra commission paid to retail employees to push products. Trade discounts (also called functional discounts) - Payments to distribution channel members for performing certain functions.

Objectives of Sales Promotion

Sales promotion is a tool used to achieve most of the five major promotional objectives discussed in the Promotion Decisions tutorial:

Building Product Awareness Several sales promotion techniques are highly effective in exposing customers to products for the first time and can serve as key promotional components in the early stages of new product introduction. Additionally, as part of the effort to build product awareness, several sales promotion techniques possess the added advantage of capturing customer information at the time of exposure to the promotion. In this way sales promotion can act as an effective customer information gathering tool (i.e., sales lead generation), which can then be used as part of follow-up marketing efforts. Creating Interest Marketers find that sales promotions are very effective in creating interest in a product. In fact, creating interest is often considered the most important use of sales promotion. In the retail industry an appealing sales promotions can significantly increase customer traffic to retail outlets. Internet marketers can use similar approaches to bolster the number of website visitors. Another important way to create interest is to move customers to experience a product. Several sales promotion techniques offer the opportunity for customers to try products for free or at low cost. Providing Information Generally sales promotion techniques are designed to move customers to some action and are rarely simply informational in nature. However, some sales promotions do offer customers access to product information. For instance, a

promotion may allow customers to try a fee-based online service for free for several days. This free access may include receiving product information via email. Stimulating Demand Next to building initial product awareness, the most important use of sales promotion is to build demand by convincing customers to make a purchase. Special promotions, especially those that lower the cost of ownership to the customer (e.g., price reduction), can be employed to stimulate sales. Reinforcing the Brand Once customers have made a purchase sales promotion can be used to both encourage additional purchasing and also as a reward for purchase loyalty (see loyalty programs below). Many companies, including airlines and retail stores, reward good or preferred customers with special promotions, such as email special deals and surprise price reductions at the cash register.

The Impact of Sales Promotions

by Neil Kokemuller, Demand Media
Promotion is the component of the marketing mix strategy that emphasizes the use of various communication tools to promote the value of your company, products or services. While much of promotion is focused on long-term communication objectives, sales promotions have a specific motive of creating immediate sales.

Effect of Sales Promotion on Brands

ales promotions are discounts or inducements used to get customers to buy products more quickly or in greater volume than they otherwise would. Companies use sales promotions for various purposes, including generating revenue or cash flow, clearing out excess inventory or encouraging brand switching. Sales promotions can impact the long-term value of brands.

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Sales promotions are discounts or inducements used to get customers to buy products more quickly or in greater volume than they otherwise would. Companies use sales promotions for various purposes, including generating revenue or cash flow, clearing out excess inventory or encouraging brand switching. Sales promotions can impact the long-term value of brands.
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Understanding Brands
To appreciate the effects sales promotions can have on brands, you have to understand brands and what companies try to achieve with them. A brand is the meaning behind a name, logo, symbol, words or images commonly associated with the company or product. Brands are reputations developed over time through investment in quality products and services and marketing, which is used to convey benefits of the brand to targeted customers. Strong brand value can lead to customer loyalty and greater profit margins.

Price Orientation
The value equation suggests customers see value as the correlation between a product's price and the benefits it offers. Brand building is generally intended to strengthen customer perception of quality benefits to enable the company to charge higher prices. Sales promotions emphasize reduced prices as the reason for increased value in a purchase offer. Getting customers to focus on price versus quality impacts their perception of your product's worth. In essence, a sales promotion or price inducement suggests you can't sell the product at the prescribed regular price because demand for your brand was limited.

Minimizes Investment
Not only do sales promotions possibly instill a price orientation in customers, they can also serve to counter your ongoing investment in brand development or management. Over time, companies invest in advertising to build and maintain a brand image. Consistently dropping prices can severely undercut your promotional efforts and limit your returns. On one hand, your ads tell customers how incredible and valuable your brand is; on the other, your sales promotions imply that you must offer discounts to attract interest.

Loyalty Issues
Part of branding is connecting with targeted customers and getting them to feel loyalty to your company or product. Creating sales through discounts may attract price-conscious consumers, but price alone rarely leads to a strong bond with your brand. Struggling fashion retailer JC Penney found this out when it tried to change from a heavy emphasis on regular sales promotions to a more value-oriented approach with no sales beginning in 2011. As of late 2012, the company was still struggling to generate customer traffic and sales because of the lack of interest from previous customers who were primarily motivated by price and not loyalty to the store.

Tools of Promotion - Advertising, Sales Promotion, Public Relation & Direct Marketing

The 4 Ps of marketing are product, price, place and promotion. All four of these elements combine to make a successful marketing strategy. Promotion looks to communicate the companys message across to the consumer. The four main tools of promotion are advertising, sales promotion, public relation and direct marketing.
Advertising

Advertising is defined as any form of paid communication or promotion for product, service and idea. Advertisement is not only used by companies but in many cases by museum, government and charitable organizations. However, the treatment meted out to advertisement defers from an organization to an organization. Advertising development involves a decision across five Ms Mission, Money, Message, Media and Measurement. Mission looks at setting objectives for advertising. The objectives could be to inform, persuade, remind or reinforce. Objective has to follow the marketing strategy set by the company. Money or budget decision for advertising should look at stage of product life cycle, market share and consumer base, competition, advertising frequency and product substitutability. Messages development further is divided into four steps, message generation, message evaluation and selection, message execution, and social responsibility review. Once the message is decided the next step is finalizing the media for delivering the message. The choice of depends on reach of media, frequency of transmission and potential impact on customer. Based on this choice of media types are made from newspaper, television, direct mail, radio, magazine and the internet. After which timing of broadcast of the message is essential as to grab attention of the target audience. Checking on the effectiveness of communication is essential to companys strategy. There are two types of research communication effect research and sales effect research.
Sales Promotion

Promotion is an incentive tool used to drive up short term sales. Promotion can be launched directed at consumer or trade. The focus of advertising to create reason for purchase the focus of promotion is to create an incentive to buy. Consumer incentives could be samples, coupons, free trial and demonstration. Trade incentive could be price off, free goods and allowances. Sales force incentive could be convention, trade shows, competition among sales people. Sales promotion activity can have many objectives, for example, to grab attention of new customer, reward the existing customer, increase consumption of occasional users. Sales promotion is usually targeted at the fence sitters and brand switchers.

Sales promotional activity for the product is selected looking at the overall marketing objective of the company. The final selection of the consumer promotional tools needs to consider target audience, budget, competitive response and each tools purpose. Sales promotion activity should under-go pretest before implementation. Once the activity is launched it should be controlled as to remain within the budget. Evaluation program is a must after implementation of the promotional scheme.
Public Relations

Companies cannot survive in isolation they need to have a constant interaction with customers, employees and different stakeholders. This servicing of relation is done by the public relation office. The major function of the public relation office is to handle press releases, support product publicity, create and maintain the corporate image, handle matters with lawmakers, guide management with respect to public issues. Companies are looking at ways to converge with functions of marketing and public relation in marketing public relation. The direct responsibility of marketing public relation (MPR) is to support corporate and product branding activities. MPR is an efficient tool in building awareness by generating stories in media. Once the story is in circulation MPR can establish credibility and create a sense of enigma among sales people as well as dealers to boost enthusiasm. MPR is much more cost effective tool than other promotional activities.
Direct Marketing

The communication establishes through a direct channel without using any intermediaries is referred to as direct marketing. Direct marketing can be used to deliver message or service. Direct marketing has shown tremendous growth in recent years. The internet has played major part in this growth story. Direct marketing saves time, makes an experience personal and pleasant. Direct marketing reduces cost for companies. Face to face selling, direct mail, catalog marketing, telemarketing, TV and kiosks are media for direct marketing. Advertisement, Promotional activity, Public relation and direct marketing play an essential role in helping companies reaches their marketing goals.