Learn how to develop a sales promotion strategy that will drive more sales leads and boost sales.
Sales promotion is the process of convincing 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. Some sales promotions are aimed at consumers. Sales promotion ideas can come from anywhere.
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This post about sales promotion and will highlight several methods available for use in your marketing programs. Businesses will often use promotion activities in conjunction with advertising and personal selling.
Sales promotion strategies should be based on methods to provide the best results/cost combinations for achieving the communications objectives. This post will cover sales promotion with examples
This post will explain the following:
Nature and Scope of Sales Promotion
Many firms have no identifiable marketing promotion plan. Often, the responsibility is assigned to different marketing functions and such as advertising, merchandising product planning, and type of product sales.
For example, a sales contest for salespeople is typically designed and administered by sales management. And the cost of the contest is included in the sales department budget. Moreover, planning in coordinating a coupon refund program may be assigned to a brand manager or market manager.
Total expenditures for sales promotion my business and industry are substantially larger than the total spending on advertising.
The complete scope of sales promotion is difficult to identify because its activities are included in various departments and budgets. There are several similarities between promotion and advertising and some important differences.
An important strategy issue is how to manage the promotion function and get the potential customer to buy the product.
While the various activities are often used to support advertising, pricing, the channel of distribution, and personal selling strategies. The size and scope of sales promotion suggest that responsibilities should be assigned to one executive.
Some proponents argue for the establishment of a department of sales promotion. A minimum, marketing management should coordinate and evaluate promotion activities.
Types of Sales Promotion Strategies
A variety of activities comprise the total promotion strategy. This includes things like a trade show, specialty advertising, contest, point-of-purchase displays, coupons, recognition programs, and free samples.
Sales promotion methods are typically more effective when used as part of a total communications program. Rather than when they form a primary component of the promotion activities.
Expenditures for sales programs may be very substantial. For example, Purina foods more than 50 million 50 cent coupons as part of a 20 million dollar.
It was used for advertising, trade, and consumer promotion campaign for its Purina Moist and Meaty Chopped Burger brands. At the average coupon redemption rate of 1 and 25, about 2.2 million of the 50 cent coupons would be redeemed.
Companies maintain their promotion activities at consumer buyers, industrial buyers, middlemen, and salespeople.
This can be seen in Exhibit 1 below.
Promotion to Consumer Targets
The use of consumer sales promotions techniques includes a wide variety of activities as shown in Exhibit 1. Some form of promotion is often used in the marketing of many consumer products and services.
For a small business, a key management concern is evaluating the effectiveness of promotions. Things like coupons, rebates, contests, and other awards. The large expenditures required to support these programs require that results and costs are objectively assessed.
Promotion to Industrial Targets
While many of the sales promotion methods used for consumer products also apply to industrial products. For example, trade shows may perform a key role in small and mid-sized companies marketing strategies.
The advantage is the heavy concentration of potential buyers at one location during a very short time. The cost per contact is much less and calling on prospects at their offices.
While people attend trade shows also spend their time viewing competitor’s products. Salespeople have a unique opportunity to hold the prospect’s attention.
Sales promotion to industrial buyers may consume a greater portion of the marketing budget than advertising. Many types of promotional activities support direct selling strategies.
These include things like catalogs, brochures, product information reports, trade shows, application guides, and promotional items. Companies can also use incentives. The frequent flyer program of the major airlines is targeted at business air travelers. Starbucks Coffee rewards is another example.
Promotion to Middlemen
Sales promotion is an important part of manufacturers marketing efforts to wholesalers and retailers. Especially for products like food, beverages, and appliances. Catalogs and other sources of information are an essential promotional component for many lines.
Promotional pricing is often used to push new products through channels of distribution. Various incentives are also popular in marketing to middlemen. Specialty advertising items are used for maintaining buyer awareness and mind share of brands.
Sales Promotion to Your Salesforce
Incentives and informational activities are the primary forms of promotion used to assist and motivate the company sales force. Sales contests and prizes are popular. Industries such as insurance make why do you serve recognition programs like the salesperson of the year.
Promotional information is vital to salespeople. Presentation kits help salespeople describe new products in the features of existing products.
Electronic aids such as webinars, slides, an interactive medium are becoming increasingly important in helping salespeople communicate product information. Direct email programs help salespeople find prospects.
Advantages and Limitations
With a wide array of incentives, pricing, informational capabilities, sales promotion has the flexibility to contribute to several marketing objectives. A company can target buyers, intermediaries, and salespeople and measure the sales response of the promotion to determine their effectiveness.
For example, the company can track its coupon redemption or rebate success. Many of the incentives and price promotion techniques trigger the purchase of other products.
Sales promotion is not without its disadvantages, however. In most cases, rather than in substituting for advertising and personal selling, sales promotion merely supports other promotional efforts.
Control is essential to prevent some people from taking advantage of free offers, coupons, and other incentives. Incentives and sales price promotional activities must be monitored.
An effective advertisement can be run thousands of times, but promotional campaigns are usually not reusable. Thus, the cost of the trade sales promotional development must be evaluated in advance.
Developing a Sales Promotional Plan
The steps in developing a sales promotion plan or similar to the design of the advertising strategy. Marketing management should first define the communication task that sales promotion is expected to accomplish.
Next, marketing management should set specific promotion objectives regarding awareness levels and promotion intentions. Marketing management must evaluate the relative cost-effectiveness of their sales promotion methods. And then select those that are for the best return-on-investment.
It is also important to integrate sales promotion activities into the total communication program. Both the content of the promotion effort and its timing should be coordinated with other promotion activities.
Finally, the program is implemented and evaluated on a continuing basis. Evaluation should measure the extent to which objectives are achieved. For example, trade show results can be evaluated to determine how many show contacts were converted into actual sales leads.
Wrap-Up
This post about sales promotion highlights several methods available for use in a total marketing communications program.
Companies often use promotion activities in conjunction with advertising and personal selling. Rather than as a primary component of the promotion plan.
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General FAQ’s
What is a sales promotion strategy?
By definition, a sales promotion strategy is an activity applied for a predetermined, limited period, to increase consumer demand and stimulate sales. Sales promotions give potential customers an additional reason to consider doing business with you and your company.
What types of sales promotion strategies work?
That depends on your situation. A variety of activities comprise the total promotion strategy. These promotion strategies include things like a trade show, specialty advertising, contest, point-of-purchase displays, coupons, recognition programs, and free samples.
Sales promotion methods are typically more effective when used as part of a total communications program, rather than when they form a primary component of the promotion strategy.
What is the definition of sales promotion and explain it?
Sales promotion is a type of marketing intended either at the buyer or at the distribution channel (in the form of sales-incentives). It is used to introduce a new product, clear out inventories, attract traffic, and to lift sales temporarily.
What is sales promotion in marketing?
Sales promotion is one level or type of marketing aimed either at the consumer or at the distribution channel (in the form of sales-incentives). It is used to introduce a new product, clear out inventories, attract traffic, and to lift sales temporarily.
