Increasing Competition That is why today when big bazaar announces any promo people sweat even in the Air conditioned showrooms because of huge and at times unmanageable crowd, who rush to avail these offers. Sales promotion can help to expand distribution. To increase the visibility of your business. Basically, sales promotion has three specific objectives. i. The second objective is to convince and influence the potential buyers through persuasive measures. Reasons for Growth of Sales Promotion. Koutons is a brand, which established itself in the city of Kolkata though huge promotions (50% + 40%) right from the beginning. The purpose of advertising is to sell a product or advance an idea through the paid distribution of marketing communication through thir… Manufacturers do not seem to have any alternatives but to concede to their demands, keeping in view the competitive market conditions. ADVERTISEMENTS: Everything you need to know about the methods of sales promotion. Can be used to gain attention to advertising, iv. Sales promotion can obtain trial of the product: “Innovate or Die” nowadays may be the slogan for many companies, especially in food and health industry. There are a number of reasons that are favorable to the growth of sales promotion: 1. Sales promotions are those activities, other than advertising and personal selling that stimulate market demand for products. Major Sales Promotion Techniques Companies use various sales promotion techniques to promote their products. 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. According to Clothier and Spriegel, “promotion is the transfer of an employee to a job which pays more money or one that carries some preferred status.” The intention is to increase sales, make a large customer base, encourage trial, encourage repeat purchases to stimulate consumers' purchase. xiii. Some consumers even consider advertising as an intrusion into their privacy, leading to zapping (surfing channels). Similarly, sales force contests are arranged to stimulate the efforts of the salesmen. Many sales promotions are designed to provide benefits to the retailers. Invigorate the use of mature product: Sales promotion can affect purchase acceleration – Here two aspects of purchase acceleration should be considered – increased quantity and decreased interpurchase time. As sales increase rapidly, businesses start seeing profit once they pass the break-even point. Displays at the point of purchases lead to impulse buying by consumers, more so if the items on display are not expensive. They are therefore resorting to more innovative methods of sales promotion. Easy applied the same model to cinemas when it created Easy Cinema and then with buses for Easy Bus. Retailers and wholesalers have become powerful and find themselves in a position to demand extra facilities from the companies. 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. Following these product life cycle strategies for the first PLC stage, the company and the new product are ready for the next stages. If, after each sales dip, a business offers another sales promotion, it can be damaging to the long-term value of its brand. For various reasons the use of sales promotions has grown rapidly during the past couple of decades. Content Guidelines 2. The sales promotion department usually arranges such contests to increase the efforts, and energies of the sales force. — A.H.R. b) Encourage brand loyalty: It is not enough to persuade consumers to try your product. This increased price sensitivity is a direct result of rampant inflation. shaving cream and after-shave lotion), x. The second objective is to convince and influence the potential buyers through persuasive measures. Audio-visual medium, which is considered as the most effective for short-duration ads, may cost in excess of Rs. As a result of these perceptions of similarity among brands, marketers have no way but to compete on the basis of extra benefit offered through sales promotion. Sales promotion is the process of persuading a potential customer to buy the product. Management increases efficiency as it leads to reduction in costs due to optimum utilization of resources. Direct involvement and support of those working in sales, ii. Copyright 10. Reasons for the Growth of Sales Promotion Sales Managers are Under Great Pressure to Produce Results Quickly. Importance of Sales Promotion for a Company. Delens. The … Download our Free Pipeline Analytics App for Salesforce.com now. In the digital arena where business and commerce are heading to, Digital Marketing tools and techniques provide business owners the best chances for competition, survival and even business growth. These promotions create an element of interest and excitement, and consumers enjoy these and response enthusiastically to such contests and sweepstakes, etc. Related: 18 Reasons and the Importance of Product Innovation (Explained). Sale… The number of marginal customers is increasing. Before publishing your articles on this site, please read the following pages: 1. Sales promotion is a tool used to achieve most of the five major promotional objectives discussed in the Promotion Decisions Tutorial:. Dec 30,2020 - explain briefly various methods of sales promotion | EduRev Class 12 Question is disucussed on EduRev Study Group by 103 Class 12 Students. This study can be conducted readily and effectively as the results can be measured quickly and, because of the narrow focus of the promotion, other factors can be tightly controlled for. Working on your diction and having a groomed appearance makes a big difference. Advertising. Sales promotion refers to temporary incentives offered by an organization to either their customers or their resellers, with the intention of increasing the sales of their products. If he overuse of sales promotion may result in negative attitudes. Salespeople who can think on their feet and fit in with changing situations are worth their weight in gold. For these small budget firms, sales promotion is a more cost-effective promotion method to produce sales results. In this buyer’s market era no business organization can afford to ignore sales promotions. This section reviews the d ata available to model People who are money conscious buy such jeans. These internal factors affecting sales of a product include: 1) Company’s product. As competition intensifies and promotions proliferate, consumers have learnt to earn the rewards of being smart shoppers. First, consumers have not only accepted but also prefer sales promotion as part of their buying decision criteria. Cost for Results In This Industry Are Relatively Low. Sales promotion can introduce a new or improved product or different packaging, v. Sales promotion can be used to neutralized competitive advertising or sales promotion. Incentives are in addition to basic benefits provided by the brand and temporarily changes perceived price or value. In the promotion of selling activities, the new product is available in the market. Sales promotion tend to orient toward short term. advantages and disadvantages of sales promotion Profitability increases may be low. The moment you notice your sales dropping, you need to act fast to get to the bottom of the problem. Therefore, the introduction stage starts when the product is first launched. Some sales promotions are aimed at consumers. Encourages switching from competitor brands, viii. It is also a way to increase the sales of the products because customers have an anticipation that they might win a gift from the store. Such promotions can permit price discrimination by allowing the brand to compete in 2 or more different market segments. Sales promotions that last too long can trigger promotion fatigue or damage a brand's good name. While it may seem overwhelming, its importance cannot be overstated. Sales promotion strategies can be divided into three broad types. Disclaimer 9. Sales promotion is very important in this modern age. However, sales promotion activity is also increasing in other categories, including health care, computer hardware and software, consumer electronics, and service industries. Advertising is a specific marketing communication activity that involves placing marketing messages or more specifically, advertisements on a purchased area within a medium such as radio, television, print, outdoor mediums, or digital marketingchannels including blogs and social media. If the customers get branded jeans at half the actual price, then they are definitely going to make huge purchases of Spykar Jeans because they want value for their money, as they are price sensitive. Sales promotion programs often require big implementation costs. Sales promotion helps in making new customers and it is also effective in maintaining the old customers. One reason for the increase in sales promotion is the power shift in the marketplace from manufacturers to retailers. First, consumers have not only accepted but also prefer sales promotion as part of their buying decision criteria. Effect of Other Elements: The analysis of the product life cycle is also affected by the various elements of the 4 Ps of the marketing mix, including the product itself, price, place and promotion. They Channel members demand more incentives to get the desired results. Customer satisfaction: Sales promotion helps in satisfying the consumers. i. Due to increase in competition, companies are finding it increasingly difficult to compete on quality. Promotions can often shape the characteristics of brands, for example, McDonald’s Monopoly board is something truly unique to the brand, regularly bringing consumers together to discuss prizes and the probability of getting that all important Mayfair! Marketing managers use sales promotions to stimulate buying and increase consumer interest in a product. Some sales promotions are aimed at consumers. The tools of sales force promotion are bonus, sales force contests, and sales meetings and conferences. 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