Methods of Sales Promotions | Reasons for Growth of Sales Promotion
Table of Contents
Methods of Sales Promotion
Sales promotion can be effected in several ways. The following are some of them.
1. Sales Force Promotion
Personal selling is highly essential in marketing. To make personal selling highly effective, sales force promotion is essential. The tools of sales force promotion are bonus, sales force contests, and sales meetings and conferences. Bonus is usually offered to salesmen who sell in excess of the quota. Similarly, sales force contests are arranged to stimulate the efforts of the salesmen.
The sales promotion department usually arranges such contests to increase the efforts, and energies of the sales force. Sales meetings and conferences are also arranged for the purpose of educating and inspiring the sales force. In such conventions and conferences, the sales promotion department exposes the salesmen to the latest sales techniques and latest methods of promotion of goods.
The sales promotion department assists the salesmen to contact the prospective customers. Sometimes, it prepares the ground for the salesmen to meet the prospects by sending them circular letters and sales literature. This helps the salesmen a lot while selling.
2. Sales Promotion of Dealers
There is need for a cordial relationship between the manufacturer and the dealers i.e., wholesalers and retailers including the agent middlemen. It is highly essential because it is only through dealers that a manufacturer sells his goods.
The sales promotion department is responsible for maintaining such a cordial relationship with dealers so that the goods move quickly along the channel of distribution. Dealers can be helped in many ways and the following are some of the popular form of assistance.
1. By provision of management aids
Modern manufacturers offer a variety of management aids to dealers. Management aids include technical guidance and assistance like scientific layout of the stores, arrangement of goods in the stores, lighting arrangement, etc.
The main idea of such assistance is to help the retailers to sell more goods and buy more from manufacturer. Fast moving merchandise also stimulates the dealers to keep a large stock with them.
2. Sharing of information
The manufacturer sometimes conveys all information about a product to the dealers, such as information relating to production processes, etc. The dealer also informs the manufacturer about consumers’ demand pattern, their likes and dislikes, tastes and preferences, complaints and criticisms, substitute goods, competitive products and so on.
3. Training of dealers
The sales promotion department arranges to train dealers about the various aspects of sales. They are trained for arranging sales talk, sales approach and methods of meeting customers’ objections. The dealers are also given detailed information about the process of manufacture so that they can answer customer queries more efficiently.
4. Furnishing dealers with sales literature and display materials
The dealers are supplied with sales literature by the manufacturers. Their sales literature includes literature of all aspects of sales that assist dealers in making a sale.
Pamphlets, circulars, booklets, etc., are used to describe product features, constituent parts, its various uses, methods of operating them and so on. In case of bulky and costly goods which cannot be displayed physically, display materials, posters, show cards act as promotion materials.
5. Attractive terms of sale
The manufacturer offers a number of attractive terms to dealers in order to induce them to buy an article. In case of new products, the producer may offer some buying allowance to the dealers. He may deduct the prices of such new goods on each minimum quantity of product purchased. This may induce dealers to buy products introduced by the manufacturer.
Sometimes, the manufacturer may allow credit to dealers for a longer period of time, he can also allow high discount to dealers so that they are automatically attracted towards the attractive terms.
In some cases, the manufacturer and the dealer may undertake cooperative advertising campaign. In such cases, the manufacturer may reimburse the advertising expenditure borne by the dealer.
6. Taking the goods back
Sometimes, the manufacturer promise the dealer to take back goods if they remain unsold. Old stocks and old models are also taken back by the manufacturers. These kinds pf incentives inspire the dealers to stock and sell goods more vigorously and enthusiastically.
3. Consumer Promotion
Consumer promotion includes samples, coupons, money-refund offers, price-off, premiums, contests, demonstrations and trading stamps. Samples are freely distributed with the product purchased for the purpose of obtaining consumer acceptance. This may be done on a door-to-door basis, through demonstrations or by mail.
Consumer Promotion is useful for promoting new product. Coupons offer a discount on new purchases of a product. They are certificates entitling the bearer to a discount on the purchase of a specific product.
Money-refund overs are granted to purchasers. Sometimes, customers are given the product at a price below the normal rate. Premiums are merchandise offered at relatively low prices.
Firms may offer contests to attract customers by offering substantial cash or merchandise price cuts. Demonstrations are conducted to inform the public or consumers in the target market about the attributes and utilities of the product.
Trading stamps are a special type of premium received by customers, which can be redeemed for merchandise through stamp redemption.
4. Sales Promotion of Industrial Products
Generally, sales promotion plays a pivotal role in consumer marketing but the same is not always true for industrial marketing. However, industrial marketing may not use advertising so much as consumer marketing, but sales promotion efforts are present in industrial marketing also.
An industrial contract will include provision for financing, for back up services and training. These are generally separated from the supply of the main product but becomes an integral part of the contract. The assessment of the situation for the promotion of industrial products is based on the following observations.
1. Identify the extra benefits your competitors are offering and assess whether you can offer all or some of these benefits.
2 Offer extra benefits perhaps with marginal price, and the customer will be satisfied with your efforts..
3. Consider all extra benefits and make priority of these benefits with a view to offering these to customers depending upon a particular sales situation.
5. Sales Promotion of Services
The importance of the service sector and more importantly the role of marketing inputs in services has been seen only in the last 20 years.
Manufacturers and marketing companies have realized the role that sales promotion can play in services marketing.
The following promotions work very well in services marketing.
1. Joint promotion which link the buying of one service to another.
2. Promotion based on price creativity, where additional benefits are informed through price adjustments as used in restaurants, clinics and hospitals.
3. The use of premiums in the direct mailing and selling of financial offers or financial services.
Reasons for Growth of Sales Promotion
High cost of media advertising such as newspapers and TV, is one of the main reasons to find more cost-effective forms of sales promotion.
2. Growth of Super markets
The growth of huge supermarkets necessitated the need for aggressive selling. On-the-shelf promotion is another reason for its growth.
3. Accelerates Cashflow
By inducing more sales through sales promotion, inflow, of cash increases — This could be one of the objectives of the firm.
4. Production capacity
To main the high production capacity, a company may go for sales promotion to accelerate sales.
5. Creation of Goodwill
Media advertising tends to be impersonal whereas sales promotion is more personal, linking the manufacturer with the customer.
6. Fun and Excitement
The introduction of a certain amount of fun and excitement into promotions which customers can enjoy as participants.
7. To attract buyers
To encourage impulse buying and attract first-time buyers, sales promotion is used.