A contest is based on testing the skill or ability and may not involve the proof-of-purchase (this is called a “consideration”) to enter the contests. These samples may be distributed door-to-door (through personal selling) or retail stores. Price-Off Offer 4. materials may be Diaries, calendars, Literature, Sign Boards, Packing Bags, Posters, etc. It will be useful in determination of sales quota and sales targets for middlemen. Content Guidelines 2. The retailer takes decisions concerning the target customer, services, ambience within outlet, and the decisions concerning price, place and promotion. Convention – By this the company gets many benefits like finding new sales leads, contacting customers, introducing new products, meeting new customers, selling more to present customers, and educating customers with publication and audio-visual materials. Samples – Small quantity, sometimes free of cost or sometimes at minimum price, sent door to door personally or through mails or with other products etc. These are part of Interest promotions because such sales promotions create not only interest but also produce excitement and enthusiasm in consumers. Advertising supports sales promotion activities by informing the public about such efforts of the company. These are usually aimed at increasing the performance of the sales persons. Money Back Guarantee – Producers guarantee that if their product does not meet certain standards, consumers can return the product and get their money back. Before uploading and sharing your knowledge on this site, please read the following pages: 1. Effective sales promotion techniques involve a lot of methods mixed together such as advertising, personal selling, direct marketing and public relations. The gift is sent by the manufacturer by mail or through courier. Privacy Policy3. The customer does not get any benefit at the time of purchase, rather he gets it through mail. Under this, the seller offers premium to the buyer by way of supplying a gift along with the product or inside the product package. ii. Refund offer is limited only by the imagination of the promotion planner and the budget allocation. Consumer promo­tion methods are those which directly encourage consumers to buy product in more and more quantity. Coupons are particularly attractive to consumers who are price sensitive. Promotion is an incentive tool used to drive up short term sales. When an additional compensation is offered to trader for pushing additional product in market, this method is used to push a specific product or product line. Money-Back Offer 12. i. Example—”Exchange your black and white television with a colour television.”. Refunds and rebates (both terms are used interchangeably), a. In-packs, on-packs, near packs and container premiums. Only products which are lacking in quality, or are not likely to be favoured by consumers, require sales promotion efforts. Business firms use promotional tools to achieve the following benefits: The first aim of sales promotion is to attract the attention of the prospective buyers and inform them about the availability, characteristics and uses of a particular product. xv. Letters on some coupons were part of either the brand of washing machine, television, or wristwatch, etc. Refunds are quite effective in competitive situation where consumers perceive little or no differentiation among brands. TOS4. and by providing personalised services. Thus, retails stores try to focus customer attraction by carrying out sales promotion techniques. It helps marketers to realize a variety of objectives. Free literature can be distributed to introduce the firm and its products to the public. This technique offers to exchange the old product with new one in payment of a fixed amount which is less than the original price. Trade promotion can persuade the wholesaler, retailers or distributor to carry a brand, advertise or give a shelf space to the products of a particular company. The promotion said, “buy any scooter, scratch a card, and win a sure prize”. Uploader Agreement. Samples are defined as offers to consumers of a small amount of a product for trial. sales promotion tools and its impact on customers buying behaviour with special reference to Rathi Build Mart, Raipur. Under this scheme customers are given assurance that full value of the product will be returned to them if they are not satisfied after using the product. ‘Readers Digest’ regularly makes this offer. Refund offers seem to work very well in guaranteeing the trial of a product or service, since there is no risk involved for the customer because of the promise of total refund of the purchase amount. The consumers are expected to be convinced to use the product. Sales Promotion Contest: – Sales force contests are announced to stimulate company salesman to redouble their interest and efforts over a stated period with prizes to be the top performer. Too much dependence on sales promotion techniques gives the impression in the mind of customers that perhaps the product falls short of quality and is not saleable. In case of Colgate toothbrush, it offered 1 free with the purchase of every two brushes. Direct premiums are used to reward the customers immediately at the time of purchase, and mail premiums require the customers to take some action, such as mailing the proof of multiple purchases to the marketer. 3. But many retailers do not patronise this method because it involves financial and accounting problems for them. This form of promotion is usually not advertised, as it is an internal affair between the company and its distribution network partners. Such promotions work very well in gaining the attention of consumers, particularly at the point-of-purchase (POP) among similar brands, and may also encourage unplanned or impulse buying. For examples, Big Bazaar issues coupons for selected items in their weekly flyers that are distributed via mail or along with newspapers. All types of promotional activities are currently used by retailers in order to be differentiated in the market. Sales promotion techniques help in increasing the life span of the product during different stages of the product life cycle. Some of these promotions appear in audio-visual or print media. These … Much depends on the ingenuity of promotion planner. For instance, a car worth Rs. It also tells them how the concerned products will be helpful in satisfying their specific demands. Marketers choose premiums that have much appeal to the consumes, or products that are related in some way to the products of the marketer. This creates confidence among the customers with regard to the quality of the product. This is useful for drawing attention to product improvement. 1) Manufacturers organise sales contests wherein the winners are rewarded by way of money, incentives, trips, gifts, etc. Components 4. A gift for an order is a premium given to the retailer for buying certain quantities of goods or for special display done by the retailer. The factor of chance limited only to what one gets, no losers, all winners. Most of these products are typically used by individuals or households and are generally sold by retails stores. iii. Although a few of the elements are used in common by each, for the most part the needs of the retailer differ from those of the manufacturer. LIST OF TOOLS• Free samples: These are distributed to attract consumers to try out a new product and thereby create new customers. They add to the overall effectiveness of the firm’s promotional activities. v. Motivating the dealers to buy high volumes of products and push more of the brands that are on promotion. Yet another reason can be that when retailer feels threatened, then the only way to respond to competitive situation is to offer a price discount to consumers to move the product off the shelves. Main Menu. In India, contests and sweepstakes are very popular promotional techniques and are frequently used in diverse product categories and services. Manufacturers devise the strategy such that the customer qualifies for a refund only when he makes multiple purchases. Such an offer acts as an incentive to stimulate short-term profit of the retailer and promote new products for the company. iv. Following are the objectives of sales promotion: i. Sales promotion ideas and examples to increase sales. Except for advertising through direct mail, advertising deals with media owned and controlled by the firm itself. To overcome the seasonal fluctuation of products. For that, company provides extra commission, buy back guarantee, price offs, allowances, gifts, free goods to them. This type of refund policy builds store loyalty among consumers who continue the patronage. Samples are one of the most important tools of sales promotion. programme. Effective sales promotion tools are tailored to presentations at events or trade shows, door-to-door sales, retail sales, direct mail advertising, telemarketing or Internet-based marketing. are examples of this type of sales promotion. Customer will buy those products or services that are highly advertised, mostly seen etc. There were no first of second prizes, the top prize was a Santro car, besides many other prizes. Marketing Management, Promotion, Tools, Sales Promotion. Sales promotion essentials : the 10 basic sales promotion techniques-- and how to use them. Under this method, the product is sold and money is received on installment basis at 0% or without interest rate. 4. Trade Promotion Techniques include the following: Off-Invoice Allowances,Buying allowance,Display and advertising allowance,Buy back allowance ,Bill back allowance,Slotting allowance,Merchandise allowance The seller determines the number of installments in which the price of the product will be recovered from the customers. But it does not include advertisement, publicity and personal selling. Dealers promotion methods are those which encourage dealers and distributors to buy and resell more and more quantity of the product. Most of these techniques can be used both for consumer as well as trade promotions. Consumers have to take some action to claim the premium, such as sending the proof of a single or multiple purchases and wait for some period of time for the delivery of the premium through mail or courier. Distribution of samples is popular in case of books, drugs, cosmetics, perfumes and other similar products. Disclaimer Copyright, Share Your Knowledge Sales promotion includes activities of non-routine nature to promote sales, e.g., distribution of samples, discount coupons, contests, display of goods, fairs and exhibitions, etc. It refers to giving a free gift on purchase of a product. Promotion can be launched directed at consumer or trade. Whenever the store-traffic increases, customers visiting the store not only buy promoted product, but some of them buy other products as well. Need and Importance 5. The two types of sales promotion tools consumer are as follows: A. Cheap Bargain – To get another product at a very cheap rate while buying a product; e.g., A bucket of plastic of 5 litres only at Rs.6 with every pack of ‘SURF’ of 1 kg. A well-known television programme in India, “Surabhi”, is an example of this type of promotion. The scheme may be like – “Scratch a card (or burst a cracker) and instantly win a car, A.C., fridge, T.V., computer or electric iron on the purchase of a T.V.”. It is also different from advertising. For example – a silver tray to display a product. This offer is given to clear off excess inventory (stock) or to block competitive moves. Comparatively, coupons seem not to be so popular with young, less educated, unmarried individuals. The terms refund and rebate are used as meaning the same thing/Long ago, the term rebate was popular by the automobile industry in the developed countries. Such short-term methods or tools of sales promotion are directed towards consumers, middlemen and even to the sellers appointed by the producers. In these contests, participants compete for prizes on the basis of their skill or creative ideas. Plagiarism Prevention 5. 55.50 off on Gillette Sensor excel. Out of these correct entries, depending on the number of prizes to be given, some are picked up on a random basis to declare the winners. Marketers use this technique when they use new distributors or they want to push products to retailers. 2. Where advertising offers a reason to buy, sales promotion offers an incentive to buy. For example, Mug free with Bournvita, Toothbrush free with Toothpaste, DVD free with TV, Vacuum cleaner free Fridge, etc. offer easy financing schemes even at 0% rate of interest e.g., “Pay Rs. Demonstration at retail stores, fairs and exhibitions or (Demo) even door-to-door. 6 Credit facilities. For example, the participants may be required to write a slogan, choose a name, or create a design, etc. A premium (gift) is a reward given to the consumer for performing a particular act, generally purchasing a product or service. Such premiums are attached either to the product, enclosed with the product, or otherwise available with the product when the consumer buys the product. 4 Free trials. Seventh step relates to monitoring the offer, collection of the relevant data and for the future use as well as mid period corrections in promotion methods. Tools and Programmes 9. The techniques of sales promotion used by business houses are discussed below: Many big businessmen distribute free samples of their products to the selected people in order to popularise their products. A great sales technique – pick one from the list below. Copyright 10. 2. Proper planning is essential for the success of promotion plan as it involve high investment on promotion products and execution of promotion activities. Before publishing your Articles on this site, please read the following pages: 1. As the product is primarily targeted at kids, these premiums had great appeal to them. Sales promotion techniques are known as promotion tools and the mode of their application is known as sales programme. As a matter of fact, sales promotion activities aim at supplementing and co-ordinating personal selling and advertising. In this type of sales promotion, prizes are offered in kinds (especially the products of the company) and sometimes a payment is given to the participants. Many people have a misconceived notion that sales promotion is nothing more than advertising. Tools and Programmes for Consumer Sales Promotion: Also known as consumer sample or free samples and given to consumers to introduce a new product or to expand the market. xiv. These activities might include extra cash or trade discount on the basis of orders placed. Free door-to-door samples – This technique however is costly. In certain case all those who furnish the proof-of-purchase are given some specified premium. Advertising, on the other hand, is any paid form of non- personal presentation and promotion of ideas, goods and services. 4. Sales promotion letters and catalogues. 3. Tell tags are informative labels affixed on the product, describing in detail the features of the product and its unique selling points. A discount coupon is a certificate that entitles its holder to a specified saving on the purchase of a specified product. Objectives of Sales Promotion 3. Another free offer can be in the form of free samples to motivate people to try the … The best example of this is the frequent flyer scheme offered by airlines. The same element of chance has been used in case of consumer durable product of high-involvement category. Advertisement Allowances/Materials, encouraging dealers and distributors to advertise products. This technique is often used to introduce a new large size of the product, or to encourage continued usage, and also to increase consumption. With growing competition at the market place and the need to release full benefit of sales promotion, it requires an appropriate approach according to market conditions and nature of product. Same techniques, which are used for consumer promotions are also used to promote products to business users, such as stationary, computer systems and consumables, machinery, automobiles, and many other products. These techniques are discounts and deals, increasing industry visibility, price– based consumer sales promotion and attention– getting consumer sales promotion. There can be more than one community in a society. Under these promotions… The retailers are reimbursed by the manufacturer for the value of coupon redeemed and also paid a small percentage to cover handling cost. xi. To reduce the perception of risk associated with the purchase of a product. Periodical training programmes are conducted by dealers and distributors for salesmen to give them a better knowledge of a product and its usage. Share Your Word File It is offered to encourage repurchase of a product immediately after another trade deal. This technique induces customer to buy their requirements from the retailers who offer such stamps. Learn about:- 1. If you have a product which is new in the market or which is not receiving a lot of attention, then you can promote this product to customers via sales promotion.You can use various techniques like giving discounts on the product, offering 1 + 1 free schemes, etc etc. For example- few car retailers offer free servicing for the first 6 months if certain car components are damaged or are under performing. 8. It encourages trade cooperation and stimulates repurchase. It increases sales and makes sales of slow moving products faster and stabilize fluctuating sales pattern. In the demonstration method, the technical experts or sale demonstrators are sent to various customers to induce them to buy the product. Sales promotion activities are often criticised on the following grounds: The incentives offered through sales promotion schemes are fictional, and not real. 1. It attracts channel members to participate in manufacturer promotion effort. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. Sales promotional activities may broadly be classified into the following: Sales promotion directed towards the consumers may be conducted either to increase the consumer’s knowledge of the product regarding its use or it may be conducted to attract new customers. Huge Collection of Essays, Research Papers and Articles on Business Management shared by visitors and users like you. Depending on the objectives, refund offers are used to encourage trial of a new product, purchase of increased quantity, or increasing the frequency of purchase, or to encourage the customers to purchase those products whose purchases can be postponed, such as refrigerators, microwave ovens, air-conditioners, and other consumer durable products. A quick response is generated by using this promotion tool for sales promotion. 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