SALES PROMOTION

DOON BUSINESS SCHOOL

UNIT 5
Concept of Sales Promotion
• Sales promotion is the process of persuading a potential
customer to buy the product. Sales promotion is
designed to be used as a short-term tactic to
boost sales – it is rarely suitable as a method of building
long-term customer loyalty.

• Where as advertising offers a reason to buy, sales

promotion offers an incentive to buy.
Tools of Sales Promotion
Sales promotion includes tools like:
• Consumer promotion- samples, coupons, prizes, cash
refund, warranties, demonstrations, contest

• Trade promotion -buying allowances, free goods,

merchandise allowances, co-operative advertising,
advertising and display allowances, dealer sales contest

• Sales-force promotion -bonuses, contests, sales rallies

Definitions of Sales Promotion
• According to American Marketing Association “ Those
marketing activities other than personal selling advertising
and publicity that stimulate consumer purchasing and
dealer effectiveness such as display shows and
exhibitions, demonstrations and various non-recurrent
selling efforts not in the ordinary routine.”
Objectives of sales promotion
• To introduce new products
• To attract new customers
• To induce present customers to buy more
• To help firm remain competitive
• To increase sales in off season
Sales Promotion Strategies and
Practices
Sales promotion strategy involves identification of
objectives, effective communication for attracting attention,
allocation of budget, determining the correct promotional
mix, introduction of strategic approach and finally
evaluation.
Sales promotion Budget allocation
1. Percentage of Sales Method
2. Objectives and Task Method
3. Competitive Parity Method
4. Affordable or Fund Available Method
Promotional mix
• Companies face the task of distributing the total
promotion budget over the 7 promotion tools such as
advertising, sales promotion, publicity, online promotion,
PR, Direct Selling and Personal Selling.
• The promotion mix is a variable in the marketing strategy.
It should be clearly decided how fare a particular element
should be used in combination with other promotional
methods.
Push & Pull Strategies
• The push and pull promotional strategies may be used to
enhance sales.
• The push strategy concentrates on middlemen or retailers
who push the sale of the product to the final consumers.
This strategy covers cooperative advertising, attractive
terms of sale, coupons and discount facilities.
• The pull strategy is directed toward the final buyers. It
persuades the buyers to go to the sellers to buy. Sales
promotion, particularly customer promotion, is an
important form of the pull strategy. Customer promotion,
may call for the offer of samples, money-refund offers,
prices-off, premiums and so on.
Sales promotion and product life cycle
• In the introduction stage, advertising and publicity have
high cost effectiveness, followed by sales promotional to
induce trial and personal selling to gain distribution
coverage.
• In the growth stage, all the tools can be toned down
because demand has its own momentum through word-
of-mouth.
• In the maturity stage, sales promotion, advertising and
personal selling all become more important in that order.
• In the decline stage, sales promotion continues strong,
advertising and publicity are reduced and sales people
give the product only minimal attention.