explain the different sales force oriented sales promotion tools
Sales promotion tries to complement the other means of promotion given above. Instant gratification is what the users of FMCG brands seek from promo. The techniques could be those where the measurement of results is straightforward, or difficult to measure. Promo can build recognition and sales in the short-term, and brand awareness in the long-term. Direct premium can be inside the pack or outside it. The main consumer promotion tools include samples, coupons, demonstration, contests, cash refund offer, premium, etc. To effect sales of a specific pack size (Vicks large size bottle) or in a specific market(s). The nature of promotional offers has changed. (c) When we want to amplify the results of the advertising, (d) When we want to increase the number of retail stores to sell our products, and. Sales promotion activities include special offers, displays, demonstrations, and other nonrecurring selling efforts that aren’t part of the ordinary routine. Consumer promotion can be offered either by a manufacturer or a retailer. Sales Promotion Tools and Techniques – 12 Commonly Used Tools: Coupons, Free Samples, Price-Off Offer, Fairs, Exhibition, Free Gifts, Competitions and a Few Others. Even price-off may tell upon the quality, because the manufacturer is likely to cut corners somewhere. Increasing, usage rate by present customers. Rebate is a partial refund to someone who has paid more or extra on purchase of a specified quantity or value of goods within a specified period. Huge Collection of Essays, Research Papers and Articles on Business Management shared by visitors and users like you. Sales promotion strategies can be divided into three broad types. Intangible benefits, e.g., charity or personality associations. Sales promotion was so far treated just as a tactical tool. We have to use sales promotion sparingly. It consists of mostly collection of those short-term incentive tools, which are designed to stimulate purchase of a particular product or service. Indeed the contest is brickmanship! 3. The direct inducements cover a whole package of coupons, price-offs, premiums, larger quantity trading stamps, free gifts, displays, shows, expositions and demonstrations. Each position has different parameters for success, skill requirements, experience requirements, and other distinctions. Not only does it give profit but it also serves other purposes such as provision of information, creation of demand, repeat buyers, sales stabilisation and quick inventory turnover. Only 15 per cent POP material that is supplied is displayed and that too for half of its useful life. The sponsors, therefore, should carry-out these tasks. Planning 6. A contest is to be held by Ogilvy one Worldwide to test how well one understands people and one’s creativity. However, every offer must start by being specific as to what objectives are intended to be achieved. An important area that concerns sales promotion objectives is directly related to the specific promotional techniques to be used. Promotion is not only addressed to consumers but also to dealers. But used improperly, they demoralise the representatives. Promotions must tie- in well with the brand’s message. It is an attempt to squeeze maximum out of promos. Before uploading and sharing your knowledge on this site, please read the following pages: 1. For example- The Confederation of Indian Industry (CII) organises several business and trade fairs on specific industries. Surprisingly, a wide range of below-the-line activities account for a large share of the total promotional mix all over the world. Implementing and Controlling the Sales-Promotion Programmes, 6. (h) POP material and its display need supervision. The types of sales promotion techniques used by the company depend upon the sales promotion objectives set by the company. Explain how sales promotion campaigns are developed and implemented. Because the sales message is disseminated through the mass media–as opposed to personal selling–it is viewed as a much cheaper way of reaching … He may have a good sales force. Coupons are used for consumer convenience goods. 5. Tropicana’s brand awareness was increased by a phone-in contest by Pepsi. To build goodwill by sharing the gay spirit. Promos magnify brand value continuously. Upgrade existing accounts to high ticket products. There are instances where coupons of free products are inserted in for new products. Sales-promotion involves a lot of expenditure. To improve a product’s visibility on the shelf. Sales volume can also be increased through effective mobilization and encouragement to the sales-force. Reduction in prices stimulates sale of goods. 3. The campaign should be directed to the consumers for whom it is meant. Producers can organise competitions or contests among salespersons to encourage them to generate more sales from new customers. Sales promotion is that “something extra” (2 + 2 = 5). The seller determines the number of installments in which the price of the product will be recovered from the customer. Sometimes, staffers other than sales representatives should be included in the contest. We can use cost-sales ratio to evaluate a promo. However, hasty decisions regarding sales promotion objectives may sometimes produce adverse effects for the firm in the long run. In a recent Tata group contest, the participants had to select the ‘Pride of India’, complete a slogan, and send the entry with an empty packet of any Tata tea or coffee, and one could win a Mercedes Benz or a Tata Sumo Deluxe car. 7. Sales promotion, in other words, is a marketing activity that adds to the basic value of the product or services for a limited period of time and directly stimulates purchasing by the target audience. One study suggested the following reasons for undertaking actively all forms of sales promotion: 1. These samples may be distributed door-to-door (through personal selling) or retail stores. For the sales force, objectives include encouraging support of a new product or model, encouraging more prospecting, and stimulating off-season sales. The target market area is to be carefully selected and should include the neighbourhood satellite markets to avoid leakage, given the fact that the tax structure is not uniform over the states. Techniques 8. It is also known as a push strategy, which is directed at the dealer network so that they push the brand to the consumers by giving priority over other competitor brands. It is not an expenditure, it is an investment which can pay rich dividends. It also affects the brand equity. Types 10. One has to communicate with the consumer through advertisements and POPs at the retail level. (b) When there are no product improvements. Premium is generally offered for consumer goods such as soap, toothpaste, etc. Promo should be timed perfectly. In the mid-90s, promos were just some trivial giveaways. What constitutes a sale – whether an order, or a delivery or payment received? IFB is offering a gas stove and a gas lighter on two of its washing machine models. It is an additional financial reward to sales force (or salesmen) for achieving sales beyond a pre-determined level. It is better to offer a discount of 30% rather than pay an interest of 3% per month which works out to 18% for a six months season. (i) The trade is motivated to carry the brand. Retailers thus demand more S.P efforts from their suppliers. Binaca used to give those animal replicas. Learn about:- 1. Brand buying is just a transaction. Sales promotion has dual objectives; 1. (ii) At the level of dealers and distribution, it is called trade promotion, e.g., free goods, display contests, dealer sales contests, push money, etc. Direct themes could be obtaining new accounts or improving the market share. Overenthusiastic representatives may resort to dumping, overloading inventories, cheating and neglecting of customer service. The accountability of redemption of coupons or refunds and rebates should be properly fixed. Options of Promotion Objectives 9. move to levy excise duty on the maximum retail price of consumer durables may affect the discounts and promotional schemes. a highly fragile, perishable or bulky product. The first step is setting out an objective for sales force. Content Guidelines 2. The constant promotion hinders a relationship between the brand and the consumer. Revenues from activities like direct marketing promotions, PR and research are on the rise. Promos have limited reach and cannot change brand perceptions across the entire spectrum of customer universe, even if supported by the company. 9 Types of Consumer Sales Promotion Tools, Aggressive Selling | Meaning | Aggressive vs Defensive | Circumstance | Methods, Different Approaches to study of Marketing, Terms of Sale | Different types of Quotations in International Trade, Factors to be considered in export packaging design, Top 10 Differences between Wholesalers and Retailers, Chain Stores | Meaning | Advantages | Disadvantages, Weaknesses of Trade Union Movement in India and Suggestion to Strengthen, Audit Planning & Developing an Active Audit Plan – Considerations, Advantages, Good and evil effects of Inflation on Economy, Vouching of Cash Receipts | General Guidelines to Auditors, Audit of Clubs, Hotels & Cinemas in India | Guidelines to Auditors, Depreciation – Meaning, Characteristics, Causes, Objectives, Factors Affecting Depreciation Calculation, Inequality of Income – Causes, Evils or Consequences, Accountlearning | Contents for Management Studies |, a product that is not superior in some way to competing products, a product with a narrow margin of profit, or. Promotion is a comprehensive term and covers the entire gamut of advertising, publicity, public relations, personal selling and sales promotions. Here, performance is measured with respect to: 5. The maximum and minimum discount must be stated. Disclaimer 8. Samples should be correctly targeted, or else they go waste. 5. Communication of the team of judges, and criteria of judging. In short, sales promotion is a bridge or a connecting link between advertising and personal salesmanship, the two wings of promotion. 4. 2. Mass advertising has its limitations and a certain shift to direct marketing and promos is inevitable. Pre-Testing the Sales-Promotion Programme, 5. It is, therefore, crucial that these contests are handled properly. These schemes are intended to motivate sales people to put in more efforts to increase sales, increase distribution, promote new or seasonal products, sell more deals to resellers, book more orders, develop prospects lists and build up morale and enthusiasm. Sales Representative Level Promotion 13. The two types of sales promotion tools consumer are as follows: A. Promos can become strategic if they are supported by other elements of the marketing mix. It is an offer to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer. The bonus is paid on achieving this sales quota. Advertising expenses so far accounted for more than 60 p.c. Sometimes, samples are attached to another product. On the contrary, such promotion delays further repurchases. A promo should remind the consumer the core values of the brand. Advertising has four characteristics: it is persuasive in nature; it is non-personal; it is paid for by an identified sponsor; and it is disseminated through mass channels of communication. This structure can lead to problems if a single l arge customer buys many different company products. The manufacturer must appreciate the trader’s interest. Akai, Daewoo, Philips, Samsung, Rayban, Van Heusen and Maruti have come out with exchange offers. Under this method, the product is sold and money is received on installment basis at 0% or without interest rate. The focus of advertising to create reason for purchase the focus of promotion is to create an incentive to buy. Reactive sales promotion objectives are developed in response to some unfavourable market situation, or where the objectives are essentially short-term, such as the following-. There are motivational tools linked to sales that achieve a certain level or cross that level. The managerial considerations are discussed along with sales contests. Promos support mainline advertising. (iii) Free goods on a certain quantity, push money and free speciality advertising items. (i) Price-offs or off-invoice or off-list. The company made Ogilvy writes a manual for other salesmen. Report a Violation 11. 4. What part of their arsenal will they use? Increase sales on average per account. Samples are defined as offers to consumers of a small amount of a product for trial. Advertising to promotional ratio in the early 90s was 70:30, but it is just the reverse today. Secondly, the premiums advertised must be readily available at retail points during the entire period of scheme. Sales-promotion objectives are derived from broader promotion objectives which, in turn, come from marketing objectives. To help launch a new product (say Cello instead of Hello on telephone and get the gift, identify independent personality and get the Alphonso mangoes). Demonstrations are provided free of cost. Promos should be designed keeping in mind the brand objectives and consumer behaviour. There were magazine samples, internet promos, contests and coupons in consumer durables. Consumers have started looking for value. The time for buying has arrived. Incentives are something of financial value added to an offer to encourage some obvious behavioural response. Marketers employ a remarkable variety of sales promotion tools in marketing. Many sales promotion campaigns involve the use of incentives. What would be the role of promotion-mix depends directly on the marketing strategy, and on the marketing objectives. Sales reps need to close more sales, and they will more readily accept and execute sales strategies that they feel are designed to help them get lead after lead, and meet and exceed sales quotas and goals. Agencies must sell a generic concept of BTL to clients. There are three kinds of sales promotion. The reusable package itself serves as a premium. Phoenix International, the Delhi-based shoe company has been offering four pair of shoes with every purchase of Rs.1,500 and two pairs with a purchase of Rs.800. It can arouse enthusiasm, create a buying mood or spark an immediate reaction from consumers, dealers and the firm’s salesperson. 3. 8. Many of you must be confused about promotion and sales promotion. 2. Sales promotion operates at three levels: (i) At the level of consumer, it is called consumer promotion, e.g., free gifts, samples, price-offs. Consumer incentives could be samples, coupons, free trial and demonstration. In sales promotion, the following arithmetic is taken into account: Cost of Promotion = Actual Price of the Gifts + Cost of Promoting and Promotion (Point of Purchase Material + Media ads, etc.,) < Additional Sales Revenue. All concepts of brand management are thrown to the wind. Only consumers postpone their purchases till an off-season price-off is announced. The nature of promos changed. 3. In using sales promotion, a company must establish the objectives, select the tools, develop the programme, pre-test the programme, implement and control it, and evaluate the results. Contest is not an intelligence test, and so should be absolutely clear. Components 4. 2 brand uses couponing to challenge the market leader. Retailers use promos to attract customers inside, and then encourage them to buy other products. Types of Programs 7. The real thrust came in 1999. So, generally promos are not offered on premium products. Short purchase cycles mean short-term effects. The manufacturer or wholesaler may have a good product, reasonable price, attractive package, etc. For example- Big Bazaar issues coupons for selected items in their weekly flyers that are distributed via mail or along with newspapers. It requires a substantial media budget over and above the freebies. A coupon with a sample is twice as effective as a coupon alone. The following are some of the most commonly used sales promotional techniques: Coupons are issued by producers of packaged goods or by retailers that could be used in retail shops that can be redeemed at discounted prices when purchasing products/services. 6. 4. The result of an effective total marketing programme is sales success, which entirely depends on positive customer reaction and an intense, well organised selling effort by resellers and salespersons. Marico is concentrating on hair dressers and beauty parlours to reposition Parachute hair oil as a hair-styler. The marketer must make further decisions to define the full promotion programme. Premium refers to goods offered either free or at low cost as an incentive to buy a product. Retailers have to exert more to handle promos. Sales Promotion Strategies. Sales Promotion – Options of Promotion Objectives, The company made Ogilvy writes a manual for other salesmen. Results expected must be clearly stated. There are certain inherent conflicts. The successful promotional effort has many ingredients such as personal selling, sales-promotion devices, advertising, public relations, and publicity. The salesforce should know its role and be motivated to do its best. In this article we will discuss Sales Promotion:-. Sales Promotions is one of the important elements of the marketing promotion mix or the integrated marketing communication. It stimulates positive attitudes toward the product. 6. Of late, consumer durables are being sold in India on sales promotion. Coupons are generally issued along with the product. (iii) At the level of salespersons, it is called sales force promotion, e.g., salesmen’s contests, bonus and sales rallies. 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. Such a shift has several reasons. 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