The advertising programme aims to nurture awareness and attitude among customers regarding the product or service. The extent to which such attitude or awareness generates the desired action is reflected in the sales report. In contrast, sales promotion programs are designed to generate immediate action.
Sales promotion is neither personal selling nor advertising; yet, it has the peculiarities of both. Being in the middle-of-the-road position, it makes each activity more effective. The advertising message that appear in the media area, in most cases, are controlled by the advertising agency, whereas sales promotion is internally created and distributed by the company to arouse the enthusiasm of salesmen, middlemen and consumers.
Sales promotions largely aims at achieving short-term sales results, whereas advertising, besides inducing customers to buy, quite often aims at developing brand image and brand loyalty.
With regard to the sales promotion programme, the management has to take policy decisions pertaining to the following issues:
What type of sales promotion programme will be selected?
How will such programme be financed?
Sales Promotion Programme
The type of sales promotion programme to be followed depends upon the objectives of the programme itself. It is, therefore, the prime job of managers to establish definite promotional objectives. Further, such objectives should support the marketing strategy for the product. The two most widely used sales promotional programs are:
Consumers promotional programme;
Dealers promotional programme.
Consumers Promotional Programme
Consumer-directed promotional programmes are sometimes called “quick action stimuli” or the “forcing methods” for they are concerned with generating immediate action. These largely aim at achieving two objectives:
To stimulate the purchase of the new product;
To increase the sales of established products.
Most commonly used method of Consumer promotion
In the marketing of such goods as cosmetics, confectionery, soap, etc., manufacturers incur a heavy expenditure on popularizing the product. The most commonly used method of consumer promotion takes the form of samples, contests, demonstrations and coupons.
1. Sampling: Free samples of the product is one of the best way to promote products among consumers. Free samples creates interest in the product. It is one of the effective sales promotion strategy. Offering free samples of Fast moving consumer goods such as soaps, shampoos, detergents, deodorants and sausages, etc creates interest in the product to consumers.
Samples of drugs and medicines are generally given by medical representatives to doctors; or small cakes of soap or free specimen copies of books by publishers to professors concerned. The idea is that the recipient should, if he finds the product suitable for the purpose, recommend it for use to the patient or student, or will himself continue to consume it. Samples may be sent on request in response to some advertisement or given to the prospects of the salesman.
2. Contests: These may be conducted to attract new customers or to introduce a new product by asking the prospects to state in a few words why they prefer it. To enter the contest, the prospect is first required to purchase the product and submit the evidence (e.g., a label or package or card attached to the product) with the entry form for the contest. Through such contests, even those who are net inclined to purchase the product get interested in using it.
3. Demonstration: This device is generally used when products are complex and of a technical nature. Cosmeticians may provide free lessons on the proper use of make up. Fashion shows may often be arranged at department stores, restaurants, and other locations, where a reasonably affluent market can be reached.
4. Couponing: Coupons are generally supplied along with the product, which entitle the holder to either a specified saving on a product or a cash refund.
The above promotional methods can increase the sale of a product to a considerable extent. But a too frequent use of promotion may tend to diminish the product image in the eyes of customers; and this may result in lower than normal repeat sales. The management should, therefore, determine the right time when a particular method may be adopted or may be dropped, if the situation warrants it.
Which Promotional methods to select?
In order to determine how to deliver an incentive effectively to a target segment, the manager should try to understand the shopping pattern of consumers and the characteristics of the product. Some organizations dealing in consumer goods use the method of sampling and demonstration to reach target market segments, while others reach them with coupons.
If the product is introduced for the first time in the market, sampling and demonstration would be the most effective methods — these have often been employed by the Hindustan Unilever for the marketing of Surf. To boost the sale of an established product, the coupon system seems to be the most effective, which is now largely used for the promotion of Pond’s Soap.
How to increase the efficiency of Consumers promotion programme?
The efficiency of a promotion programme can be increased by knowing the buyer’s purchasing rate. This requires that incentives should be made available long enough so that all the buyers may have the opportunity to avail themselves of the benefits of the promotional programme during their normal purchase cycle.
Dealer’s Sales Promotion Programme
These sales promotion programmes aim at benefiting distributors by encouraged large volume of sales. They are designed to achieve three objectives:
Objectives of Dealer’s Sales Promotion Program
To make distributors carry the product line;
To stimulate them to promote aggressively the manufacturer’s product:
To encourage to build inventories to meet the customer’s demand following the implementation of the various promotional measures.
These objectives can be achieved by offering extra cash or trade discount on the basis of the orders placed, display and advertising allowances, premium for achieving sales above a particular limit, providing POP material, etc.
In formulating a promotional programme, the management must bear in mind the needs of the distributors with respect to a particular product or product line. Some idea of this may be gained from the pricing programme of a distributor.
For the retailer, who buys goods in bulk, a price-oriented promotion would be very effective. But the promotions that help to build retailer image in respect of the quality of the product may be more important for margin — oriented retailers. Managers should also give consideration to the profit impact of sales promotion of dealers, the assortment of product inventory and space constraints.
For example, many manufacturers of similar products attempt to promote their own products. As a result, distributor attention, inventory investment and space will be divided. In this case, the offer of a trade discount and an off-seasonal promotional programme would be much more effective.