The incentive based marketing strategies used by the product manufacturers, service providers or business giants to lift sales in the upward direction and to boost the profit graph accounts of Sales promotions. Sales Promotions are short term marketing tactics to target the product market or customers to perform a certain activity or to respond in a certain way in order to increase the product sales, Trail usage of a good or product offered by product manufacturers, to avail a certain service offered by service organizations.
Marketers use sales promotion as a sharp promotional technique by offering a reward, more value, lower cost, and some value added feature or another product to increase the sale of the original product by charging the same price. A very interesting and catching term the promotional manager or advertising agencies use in order to attract more customers, sell more products and finish the old stock is, Get Two for One.
Difference b/w Advertising and Sales Promotions
Sales Promotions are completely different from advertising though the term is often confused or merged with the TV add or commercial. The delivery of a promotional message about a product or a service by any electronic medium for example radio, TV or internet is labelled as Advertising. However if the advertisement contains a value added proposition then it is considered as a sales promotion. The difference in these promotional tactics is following:
- Short period of Time: The Value Proposition in the promotion is offered for a shorter time period.
- Call to Action: The end consumer or the targeted customer must perform some action or respond in an activity to avail the value proposition.
- Sales Promotions are different from advertisements due time constraint and action requirement.
Sale Promotion and Promotional Mix
Understanding sales promotion requires the proper crux of the promotional mix. The Sales promotion is an important aspect of the promotional mix.
Promotion Mix — Advertising, Direct Marketing, Personal selling, Public Relations or Publicity, and Sale Promotion.
Communication Mediums employed for a determined, limited time period to increase product sales, to increase the demand of consumers, to attract large chunk of buyers, to stimulate company profits and to finish the current stock stored in warehouses.
Ways of Sales Promotions
- Free Attractive Gifts or Takeaways
- Price Discounts
- Joint Promotions for two brands or products
- Free Sampling
- Free Coupons
- Discounted Vouchers
- Lucky Draws
- Prize Competitions
- Cause Related promotions
- Duty Free
- Tax Free
- Buy 1 Get 1 Free
- Bonus and Incentives
Consumer Sales Promotions and Trade Sales Promotions
Communication activities can be directed towards wholesalers, end consumers or retailers i.e. B2C Relationship or can be targeted towards organization customers i.e. B2B. These marketing efforts are done to increase interest in product, product trial or product purchase.
In consumer sales promotion the communication activities are targeted towards end consumers, buyers, distributors, and product customers where as in trade sales promotions the communication efforts are directed towards at retailers and wholesalers. Appealing the final consumer is the utmost goal of sale promotions.
Sales Promotions are also used to target business partners and channel members which ultimately result in better business and channel relationship
Sales Promotions are exclusively and precisely done to incentivize the targeted market whether to distributors, company’s sales team, end consumer, or buyer. The Sale Promotions cost money and funds and must ensure return on investments and produce additional profits to meet the Promotional Expenditures.
A Super Sale to sell the old stock and clear the inventory, a contest to participate and win, Free Product trails, takeaways are some coolest forms of promotions to boost Sales. Marketers must be very careful while planning Sales Promotions as it requires huge budgets and the company may end up losing customers.
Promotional Objectives and Goals
Sales promotion is quite an interesting marketing tool and with proper planning it can yield many additional benefits for the company and the customer itself. The Sales Promotion is all about creating a win win situation for both the company and its targeted market. Let’s just talk about the goal of sales promotion.
- Brand or Product Awareness with Sales promotion: Sales promotion serves as a key element in the inception of the new product introduction to the customers. Building Brand Awareness this promotional tactics yields advantages for the Product owners by gathering customer information during the time of sales promotion activity. The brands spend ages or decades to build customer loyalty as loyal customers will be least likely to look for substitutes, will be less price-sensitive and ignore the market trends. The loyal consumers tend to stick to a specific product or brand. In order to cater these loyal customers of the competing brand Free Sampling becomes very handy while introducing a new Brand in the market.
- Increasing Product Demand with Sales promotion: The most important goal of Sales Promotion is to stimulate the product demand in the market. Sales Strategies are used to convince the buyers to purchase the product. Price reduction, Extra incentives, Premiums and Giveaways are great promotional tools to stimulate demand and increase sales.
- Brand Reinforcement with Sales Promotion: Reinforcing a well established brand sometimes requires sales promotion due to the increasing competition in the market. With the increase in availability of the cheaper substitutes, changes in disposable income and changing life trends the customers are likely to switch to other brands or products. In this case the companies employ Sales promotion to win its customer back to encourage additional purchases.
- Increasing Product Interest by Sales promotion: In order to increase the interest in a brand or a product marketers deploy sales tactics. A Mega Sale can increase consumer traffic to the outlets in the retail business. Free Trails, Small Packs, Extra value packs are some techniques used by the promotional planner to build the customer interest in the product.