Sales promotion

Above Sales promotion guidelines

sales promotion refers to those marketing activities, other than personal selling, advertising, and publicity, that stimulate consumer purchasing and dealer effectiveness, such as displays, show and expositions, demonstration and various non-recurrent selling, efforts, not in the ordinary routine",

in the words of Roger A. Strong, sales promotion is defined as all form of sponsored communication apart from activities associated with personal selling. it, thus, include trade shows and exhibits, couponing and sampling, premiums, trade allowances, sale; and dealer incentives, cents off packs, consumer education and demonstration activities, rebates, bonus, packs, point of purchase material and direct mail."

Sales promotion aimed at consumers is known as ‘consumer sales promotion’. This promotion requires the participation of customers. Customers are motivated to invest their time and effort in the sales promotion campaign. Some of the important consumer sales promotions are as follows:

Price discounts•

On this offer, products are made available at a lower price than the normal, for a limited period. This motivates the customers to buy the product immediately, e.g., buy before

31st March 07 and get discount up to Rs. 500/-.

Free samples•

Free samples are offered to convince customers to try the product. This is a good tool to enter a new market. This strategy is very useful in the FMCG (Fast Moving Consumer Goods) sector. Samples can be offered by the sales team, retailers, direct mail, through newspapers or on-pack or in the pack.

Consumer contests•

Here the consumers are invited to take part in quiz contests, rallies, beauty contests, slogan suggestion, brand name suggestion, logo suggestion, etc. Contests are conducted to generate customer interest and excitement. Contests also help in creating product awareness and push store traffic or inquiries.

Gift schemes•

Gift schemes are intended to create additional sales and value addition to the product and customer benefits. Gifts may include. walkmans, dinner sets, pens, sunglasses, cell phones, gold coins, helmets, a tankful of Petrol, accessories etc.

Finance, hire purchase offers

This is a very commonly used promotional tool in consumer durables and automobiles. Private banks and nationalized banks are aggressively financing automobiles. This tool is extremely useful in attracting lots of customers who are interested in buying but have less money to invest. Typically up to 80% financing is offered by the banks.

Exchange offers

In exchange offers, customers can surrender their used two-wheelers, cars, TV sets, gas stoves, pressure cookers, refrigerators for a price and take home a brand new product.

Demonstrations

Product demonstrations are organized to improve and increase awareness, particularly new products in the markets. A free test ride is a commonly used tool in selling 4 wheelers and 2 wheelers. Demonstrations can be organized at various housing colonies, retail malls in schools or door - to - door. Demonstrations are a great support to the company’s advertising campaign. Dealers, company, sales force or an outside agency are involved in product demonstration.

Objectives and various types of sales promotion

1)Objective Increase in Volume and market share

Promotion Type Discounts, Gifts, Contests, Coupons, etc

2) Objective Repeat Purchase

Promotion Type Loyalty Bonus, Extra Services,

Exchange offers

3) Objective New Product launch

Promotion Type Free trials, free samples, Demonstrations

4) Objective Excessive Stock liquidation

Promotion Type Trade, Channel targets and

Incentives

Publicity and Personal Selling

The term ‘Publicity’ is a broad and elusive concept, which quite often implies – advertising, information services, propaganda and public relations – all these are included under the ‘Publicity’ umbrella.

Public Relations can be defined as a firm’s communication and relationship with various people – within the organization and outside. An organization has to deal with a number of people like suppliers, customers, employees, government setups, etc. The Public Relations department of the organization improves the image of the organization.

Difference between Advertising and Publicity

Publicity and advertising are essentially different in their objectives. Advertising has to be paid for and the advertising message is controlled by the advertiser/sponsor. Publicity, on the other hand, is not always paid for. Advertising is undertaken for the sale of goods and services offered. It is normally tied up with promotion. Thus, product advertising principally aims at selling and not informing.

Publicity, on the other hand, is undertaken with a view to informing the public about an Organisation’s policies and objectives. It is the expression of Management’s viewpoint about the achievements and progress of the enterprise in respect of services rendered to the public in general. Publicity, thus, serves as a background for the trading activities of the enterprise.

Publicity has been defined by the American Marketing Association (AMA) as a ‘non-personal situation of demand for a product, service or business unit, by planting commercially significant news about it in a published medium or obtaining a favorable presentation of it on radio, television or stage that is not paid for by the sponsor’. Often, publicity is considered more effective than advertising as publicity is designed to familiarise the general public with the product’s characteristics and advantages. The vehicles of publicity are as similar to advertising – newspapers, magazines and other informative media. Publicity is an essential element of a promotional plan

Why hold a press conference?

Calling for or holding a press conference is one of the ways of garnering publicity or managing public relations. It is basically an interaction between the organization and the media. A press conference can be arranged by the agency for the client to launch a new product or service, or correcting and updating public perception, or to clarify anything which may have damaged the company’s / individual’s image – Cadbury’s and the germs issue, or Pepsi and Coca Cola and the pesticide issue.

A press conference is often referred to as meetings with the press or as a press meet. It is a meeting between the executives of a Company and the media personnel. A press release or news item is an important means of public relations or publicity. Many people tend to rely on the ‘news item’ rather than an advertisement. Hence the news item is often more important and effective and cheaper than an advertisement. On behalf of the client, the agency undertakes to call or invite the press reporters for a press conference or press meet. The reason or occasion is mentioned in the invitation. It is normally held at a hotel.