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Integrated Marketing
Communications

Kirti Dutta
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Chapter Eleven
Sales Promotion
Management
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 Contents

• Process of sales promotion

• Various ways of sales promotion

• Types of sales promotion adopted by marketers

• Benefits and limitations of sales promotions

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 Attracting Customers Through Sales Promotion
• The Big Bazaar’s ‘Sabse Saste 5 din sale’, debuted on 26 January 2007 at Big Bazaar outlets, became
an instant success and was made a regular event (Pawar T. 2012). However, from 2014, the 5-day
sale was reduced to 3 days as it ‘was proving to be a logistical challenge for the company as almost
ten million people visited its 220 stores during those days, which was more than four times the
usual 1.6–2.4 million shoppers that visit their stores on normal weekends’. To widen the net, they
enlisted their ‘franchisee to sell products through tablets, supermarkets-on-wheels, and grocery
chain KB Fair Price along with its e-commerce site futurebazaar.com,’ and on amazon.com (with
whom they entered into a strategic partnership in October, 2014).
• People were travelling from far-off places to avail Big Bazaar’s Republic Day offers; for example,
people were travelling for 50–60 km to reach a store in Kanpur, and a store in Ambala was getting
shoppers from Yamunanagar (a distance of approximately 38 km). To help people in these areas, in
2014, the company leased 50 trucks, which were fitted with racks and stored with products and ply
in areas where physical stores were absent (Bailey 2014). Nielson study has revealed that there is a
definitive move towards sales promotions, particularly from the year 2009, and sales promotion
has been a major driver of store choice (Jacob S. and R. Bhushan 2012), and thus, the sales
promotion offers make sense.
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Attracting Customers Through Sales Promotion

Question:
• Big Bazaar normally has 1.6–2.4 million shoppers
purchasing from its stores, and yet it organizes
the Sabse Saste 5 din to attract the customers.
Why?

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 Introduction
• Advertising forms the ‘reason’ why consumers purchase a brand whereas sales
promotion gives them the incentive to ‘behave’ in a particular manner, that is,
purchase ‘now’ and/or purchase ‘more’.
• Supposing when you go to the store, there is an offer on your favourite juice
brand to purchase as ‘one pack and get one pack free’. Since you wanted to buy
a beverage and the offer is good enough, you decide to buy the juice.
• We have all gone through this process for purchasing one household
consumption item or the other just because there was an offer, or prize, or gift,
etc., accompanying it.
• When a company uses a sales promotion tool, it has to take the help of
advertising to inform the customer about the offer. In addition, the sales
promotion acts as an aid to advertising and personal selling.
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 Sales Promotion Defined

• A variety of short-term incentives to encourage trial or

purchase of a product or service’ (Kotler 2006).

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Sales Promotion Process

Objective of Sales promotion

Selecting the tool

Implementation strategy
Feedback

Evaluating the results

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 TYPES OF SALES PROMOTION
• Push or trade promotion
• Pull or consumer promotion

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 Push or Trade Promotion

• Push or trade promotion is the sales promotion directed towards the channel
partners or distribution intermediaries such as wholesalers and retailers.

• Trade promotion gives the channel partners an incentive to sell the

promoted brand more, and so they try to create more demand for the brand
over other competing brands.

• Thus, the wholesaler promotes the brand to the retailer who then promotes
it to the consumer, and it results in the marketers pushing their brand down
the distribution channel and hence the name (push).

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 Pull or Consumer Promotion
• Pull or consumer promotion is the sales promotion directed towards the end-
customers.
• This type of consumer promotion gives the consumers an incentive to
purchase the brand so that they actively seek the promoted brand at the
retail outlets.
• If the retailer does not have the brand, they ask the wholesalers, and even if
the wholesalers have not purchased the brand, they ask the producers.
• This results in creating a demand for the product and the brand is pulled
down the channel and hence the name (pull).

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 Benefits of Sales Promotion - For Marketers

1. Helps to introduce new products by gaining attention of customers due to

attractive offers;
2. Helps in gaining attention of new customers and retaining existing
customers;
3. Impacts the brand choice decision-making by the consumers
4. Helps increase the basket size (Ramanathan and Dhar 2010);
5. Promotes the aggregated sales of the brand;
6. Increases the quantity purchased;

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 Benefits of Sales Promotion - For Marketers

7. Makes consumers spend more when there is a promotional offer;

8. Accelerates the purchase time
9. Increases the frequency of purchase;
10. Helps to overcome competition;
11. Helps in sales of seasonal products (such as fans, air conditioners, and
refrigerators) during off-season; and
12. Makes it is easier to measure the success and contribution of sales
promotion compared to advertising.

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 Benefits of Sales Promotion - For consumers

1. Getting the product at a lower price;

2. Getting benefi ts such as prizes, gifts, and coupons;
3. Schemes like money-back offer lend confidence to the consumers
about the products’ quality; and
4. Exchange offers help the customers dispose off their old product
for the new one and so disposing the old product is not an
additional task.

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Benefits of Sales Promotion - For Retailers and
Trade Partners
1. Get the products at lower prices and might or might not pass on this
benefit to the customers, thereby increasing their sales and profitability;

2. Get benefits such as prizes and gifts;

3. Can get better returns due to various allowances such as advertising

allowance or display allowance. For example, when companies offer a
buyback scheme to customers, retailers are given a subsidy as they have to
retain the old product customers got as well as dispose this off.

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 Drawbacks of Sales Promotion - for
Manufacturers
contribute to brand building, andand
if carriedRetailers
• The flip side for manufacturers is that compared to advertising, sales promotion does not
out for a long time, it can negatively impact the
brand image and thus future success of the brand (Dawes 2005). For retailers, the flip side is
that customers look forward to the sale and defer purchase till then. In addition, if the retailers
continue with the sales promotion for a longer period of time, then the retailer’s image is
harmed and might be perceived as providing a poor quality.
• Sales promotion offers can be easily copied and replicated by competition.
• Sales promotion ‘wars’ can start if competing brands or retailers (as the case may be) try to
match or better each other’s promotional offers.
• Consumers and trade partners purchase more stock while the promotional offer is on, and
then consumers can sell it at a later date when the offer is over. Thus, the sales that the
marketers could make at a full price after the promotion ends is lost. Organized retail sales
attract small ‘mom and pop stores’ who purchase during these periods of sales promotion only
to stock and sell at their own stores at full profit.
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 Drawbacks of Sales Promotion – Impact on
Consumers
• Consumers might feel that the brand has lost its value and has to offer
promotional schemes to ensure sales.
• Monetary promotions if carried for longer period of time result in
consumer’s confusion as they feel that there is a difference in quality due to
a difference in observed and expected price (Winer 1986).
• Consumers might feel that price is more important than the brand quality
and during non-promotional times start evaluating the brand on the basis of
price.
• Next time they might postpone purchase in wait for a promotional offer or
purchase a brand that is offering a sales promotion.

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 Quick Recapitulation
• Process of sales promotion

• Various ways of sales promotion

• Types of sales promotion adopted by marketers

• Benefits and limitations of sales promotions

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Questions?

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