Sales Promotion

• Sales Promotion is an important instrument in marketing to

lubricate marketing efforts. It is an investment which can pay rich
dividends.
• It refers to promotional activities other then personal salesmanship,
advertising & publicity.
• Whereas advertising offers reasons to buy , sales promotion offers
incentive to buy.
• It includes Consumer Promotion ( samples, coupons, cash refund,
price offs, premiums, prizes, patronage reward, free trials,
warranties, POP –Point of Purchase display), trade promotion (
Price-offs, display allowances, free goods ), Sales force promotion (
trade shows, conventions, contests), and various other selling
efforts not in ordinary routine.
• In short it the bridge connecting the gap between advertising &
field selling i.e personal salesmanship. It creates a buying mood.
 Objective
• Objectives of sales promotion varies widely while a free trial sample
stimulates consumer trail, a free management advisory service aims
at cementing relationship with retailer.
• It is used to attract new triers, to reward loyal customers and to
increase repurchase rate of occasional buyers.
• To attract brand switchers, who are primarily looking for low price,
good value, or premiums.
• Call attention of consumers to new products or product
improvements.
• Improving market share.
• To suppliment & co-ordinate efforts of Advertising / Personal
selling.
• To stimulate positive attitude towards the product by offering direct
inducement to buy.
Major decisions in Sales Promotion
• Sales promotion can be used at the time of product introduction , to
secure maximum dealer stocking , display space and attention of
consumers. In using sales promotion a company has to take some major
decisions such as
• Establish Objective;
• Select the tool;
• Develop the program;
• Pretest, implement and control it; and
• Evaluate the program.
• First of all , company has to establish objective i.e for whom the sales
promotion is meant for consumer/ dealer/ retailer/ sales force.
• Then the marketer has to take into account type of market, objective ,
competitive condition and cost of each tool and its effectiveness.
• While developing the sales promotion program the company has to
consider certain factors such as size , duration, distribution vehicle,
conditions for participation and above all promotion budget of incentive,
• Although most of the sales program are designed on the
basis of experience , still pre testing determines whether
tools are appropriate and presentation method efficient or
not. Marketing manager must prepare implementation and
control plan which cover lead time, sell-in –time. Lead time
is the time needed to prepare the programme prior to
launching it: initial planning, design, approval of package,
materials to be mailed or distributed, POP material,
notification to the sales force. Sell-in-time begins with the
launch and ends when almost 95% of the deal merchandise
is in the hands of consumer.
• Finally, result of sales promotion program can be evaluated
by using three methods : sales data, consumer survey, and
experiments.
 Advertising
• Advertising can be defined as a mass , paid communication of
goods , services or ideas by an identified sponsor. It is a paid
communication as the advertiser has to pay for the space or time
slot in which his content appears. It appears in recognised media,
such as newspaper, magazines, radio. T.V, Cinemas, out door
hoarding & posters, direct mail etc.
• Organisation may have their own ad agency or rely on outside
agency to create and develop advertising campaigns . Now
advertising agencies have redefined themselves as communication
companies that assist their client to improve their overall
communication effectiveness by offering strategic and practical
advice.
• In developing a advertising program a marketing manager has to
take 5 major decisions popularly known as 5Ms of advertising . Such
as Mission, Money, Message, Media & Measurement.
 5 M of Advertising
• Mission: it refers of advertising objectives i.e goals which flow from
earlier decisions on target market, brand positioning and the
marketing program. It is a specific communication task and
achievement level to be accomplished with a specific audience in a
specific time period. It is based on DAGMAR( Defining Advertising
Goals, Measuring Advertising Results) developed by Russel Colley in
1961.
• Objectives can be
• Developing brand awareness ( Informative advertising).
• Comprehension (people not only aware of brand but also recognise
the package & trademark but not yet convinced to buy).
• Conviction (Stimulate trial which shows brand preference).
• Action ( Persuasive advertising to take buying decision).
• Reminder advertising (reminding the audience about brand
existance &stimulate repeat purchase).
• Money : Deciding on advertising budget. Although
advertising is treated as a current expense, but a part
of it is investment to build brand equity. For deciding
the percentage of advertising spend 5 factors needs to
be considered
• Stage of product life cycle
• Market share and customer base
• Competition and clutter
• Advertising frequency
• Substitutes of the product.
• Message : Developing an Ad. Campaign involves 3 steps
• Message generation and evaluation ( It is very important to generate fresh
insight ).
• Creative development and execution ( Ads impact depends not upon what
is said rather how it is said. Making an effective Ad requires a lot of
research about the product, comptitor offering and the target customer.
The advetiser must fll in love with the product before touching the story
board . The company can prepare a copy strategy statement describing the
objective , context and tone of the desired ad.
• Social responsibility review ( Advertising agency must be sure that it does
not overstep social and legal norms. Public policy makers must develop
substantial body of laws to regulate and govern advertising. Ex – ads of
alcoholic beverages and cigarrates cannot be screened , pharma product
ads are regulated by Drug and cosmetic rules. ASCI ( Advertising standards
council of India) a self regulatory voluntary organisation specified
advertising codes as well as guidelines for ensuring fairness in advertising
and has mechanism to safeguard against misleading messages.
• Media :After developing message the next major task is to chose
appropriate media to carry it. The steps include
• 1st deciding on reach i.e no of household exposed to the media ,
frequency i.e no of times a household is exposed to the message with the
specified time period and impact i.e qualitative value of the exposure. The
Total no of Exposure= Reach X Frequency.
• 2nd selecting the specific media vehicle from among the major media
types. For this media planner has to consider target audience media habit,
product characteristics for demonstration & visualisation, message
characterisitics (technical data requires specialised magazine), cost i.e cost
per thousand exposures.
• 3rd selecting specific media vehicle which is most cost effective among
different media types.
• 4th step is deciding on media timing and allocation. Here the media
planner has to consider buyer turnover, purchase frequency and forgetting
rate.
• Measurement : most marketers measure the effectiveness of
advertisement or communication i.e its potential effect on awareness,
knowledge or preference. This can be done through
• Communication effect research ( it is conducted to determine the
effectiveness of advertisement through copy testing- consumer feedback
before & after the ad printed or broadcast, portfolio test – consumer is
asked to read, listen or view portfolio of ads and then asked to recall the
ad and its content ,here the recall level indicates the ability of the ad to
stand out of the rest, Labrotary test – here machines measures the
psychological reaction i.e blood pressure, heartbeat to an ad).
• Sales effect research ( how much sales is generated by an ad which
increases brand awareness, brand loyality etc . However it is difficult to
measure sales effect than communication effect for the basic reason that
sales can be influenced by so many other factors too such as price,
features or attributes, stock availability, competitors strategy etc.
companies are generally interested in finding out whether they are over
spending or under spending on advertisements.