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Important promotion tools in dealer sales promotion
Dealer sales promotion or Trade promotion is employed when products are sold through the retailers or wholesalers. Dealer sales promotion tools include buying allowance, merchandise allowance, price deals, premium, cooperative advertising, sales contests, point of purchase, etc.
1. Buying allowance
Buying allowance is granted to those dealers who purchase in stipulated period of time. It is very much useful in introducing new products to consumers. It motivates dealers to buy in huge quantity, dealers get immediate benefit in the form of price reduction.
2. Merchandise allowance
Manufacturer may offer an allowance in return for the retailer’s agreement to feature the manufacturer’s product in some way. For example, an advertisement allowance compensates retailers for advertising the product. A display allowance compensate the retailers for the usage of special displays.
3. Price deals
Price deals relate to the quantity of purchase. In addition to regular discounts, dealers are allowed special discount for a specified quantity of purchase. Thus, special discount is over and above regular discount given to dealers.
4. Push money or premium
Premium is a product usually offered free or at less than its usual price. Premium encourages resellers to buy a certain quantity. Manufacturers may also offer push money. It is cash or gifts given to dealers to push a particular manufacturer’s goods.
5. Cooperative advertising
Dealers are given an allowance to advertise the manufacturer’s product. Dealers claim such allowance by producing to the manufacturer the proof of advertisement.
6. Dealers’ sales contests
A sales contest is a contest for dealers to encourage them to increase their sales performance over a period of time. Sales contests recognize good performers. They may be in the form of holiday trips, cash prizes or other gifts. Some companies award points for performance to achievers.
7. Point of purchase
Point of purchase display is a silent salesman. It calls the attention of the customer to the product with the hope of initiating buying action. This device is known by several names such as dealer aids, dealer displays, merchandising and point of sale materials.