25-08-2017, 09:32 PM
Sales Promotion
The definition of promotion is the co-ordination of all seller- initiated efforts to set up channels of information and persuasion to facilitate the sale of goods or service or the acceptance of an idea . The promotion refers to the activities to push forward or to advance an idea , in such a way as to gain its approval and acceptance. Promotion is telling and selling.
Promotion is the fourth major component of company’s total marketing mix (along with product planning, pricing and distribution). Its intend is to inform , persuade and influence people. Promotional activity in marketing is basically an exercise in communication. It is a basic ingredient in non - price competition and it is an essential element in modern marketing. It is an exercise in information, persuation and influence. Communication is necessary in exchange activities. For instance , we have the best products with good package , fair price etc. The products cannot be sold to consumers unless buyers know it. People must know that the right products are available at the right place and at the right price.
Promotional activities:-
In the present era selling is a complicated task . There may be a stiff competition . There may be many substitute products. Products have become more consumer -oriented. Consumers have become more sophisticated. For instance they possess the best products at a fair price. The products are of a better quality than the substitute product for sale. But sales are not automatic. The prior idea of the production is for the sales . How will the buyers get the products, when they have not heard of our products? Therefore people must have knowledge of the existence of the products and its availability. This is possible only through a good propaganda . They arises a need for proper flow of information along with products from producer to consumer . Thus promotion is the process of marketing communication aimed to inform , persuade and influence people.
The statement “nothing happens until somebody sells something” gives in a nutshell the place of promotional activities in today’s business. The promotional activities must aim:
To inform prospective buyers about the existence of a product and it’s want-satisfying capabilities
To remind the users of past and present to its various roles on consumption
To persuade the prospective buyers in a most effective manner.
The need for promotional activities:
Promotional is the final element in the marketing mix . The manufacturer has to take a effective steps in meeting the consumer in the market after taking the decision relating to the nature of products ,its price and its distribution. The present age is of consumer oriented markets and therefore , it is the responsibility of manufacturer to know what is required by the buyers . Even the most useful and want- satisfying product will be a marketing failure if no one knows it is available . Thus it becomes essential rather a duty , of the manufactures to make the customers know from where , how , when and at what price the product would be available. As the distance between producers and consumers increases and as the number of potential consumers grow, promotional activities are necessary .
A basic purpose of promotion is to let potential customers know about the products.
Secondly there is stiff competition among the manufactures. Therefore promotional activities are necessitated. When a producer increases his promotional activities , others also follow the same and this leads to promotion war.
Thirdly large scale production can be achieved only with methods of large scale selling, which is possible only through the promotional activities .
Fourthly when there is an imperfect market condition, product cannot easily be sold on the basis of product – differentiation. In such a situation, only the promotion activities draw the attention of consumers. The customers are attracted to b buy the products on the basis of promotional activities.
Importance of promotional techniques :
The important purpose of promotion is to change the location and shape of the demand curve. Creation of demand is one of the functions of selling. But promotion is responsible for the creation of demand.
Due to increase in the physical distance between producers and consumers there is the increase in need for promotion. There is also the increase in the number of potential consumers, which increases the problem of market communication
There are many middlemen – wholesalers and retailers- existing between the producer and the final consumer. The information must be passed on not only to the consumers, but also to the middlemen. In turn the middlemen communicate to the consumers about the products. Thus promotion is the important process of marketing communication.
Today consumers give more importance to want-satisfaction rather than to their needs. They are selective in their choice of alternative expenditure. A firm must have the best promotional programmed to attract such customers.
During economic decline selling is a problem. At that time , promotion is essential to maintain the standard of living and the high level of employment in the country.
Promotional techniques:
Price deals:
A consumer price deal saves the buyer money when a product is purchased . The price deal hopes to encourage trial use of a new product or line extension , to recruit new buyers for a mature product , or to reinforce existing customers continuing their purchasing , increasing their purchases accelerating their use or purchasing of multiple units of an existing brand. Price deals work most effectively when price is the consumers foremost criterion or when brand loyalty is low. Four main types of consumer price deals are used:
Price discounts
Price pack deals
Refunds or rebates
Coupons
Price discounts:
Buyers learn about price discounts and cents-off dealers either at the point of sale or through advertising . At the point of sale, price reduction may be posted on the package or signs near the product or in store front windows .price discounts may be initiated by the manufacturer, the retailer, or the distributor . Existing customers perceive discounts as rewards and often then buy in large quantities . Price discounts alone , however , usually don’t induce first time buyers .
Price pack deals:
A price pack deal may be either a bonus pack or a banded pack. When a bonus pack is offered an extra amount of the product is free when the product is bought at the regular price. This technique is routinely used for cleaning products, food and health and beauty aids to introduce a new or larger size
When two or more units of a product are sold at a reduction of the regular single- unit price, a banded pack offer is being made . Sometimes the products are physically banded together such as in tooth brush and toothpaste offers.
Refund s or rebates:
A refund or rebate promotion is an offer by a marketer to return a certain amount of money when the product is purchased alone or in combination with other products. Refund aim to increase the quantity or frequency of purchase, to encourage customers to load up.
Coupons:
Coupons are legal certificates offered by manufacturers and retailers . They grant specified savings on selected products when presented for redemption at the point purchase . Manufacturers sustain the cost of advertising and distributing their coupons, redeeming their face values and paying retailers a handling fee.
Premiums
A premium is tangible compensation an incentive given for rendering a particular deed, usually buying a product. The premium may be free or if not the cost is well below the usual price
Incentives given free at the time of a purchase are called direct premiums. Four variants of direct premium programs may be identified. First the simple direct premium provides an incentive given separately as a product is purchased. Second in-packs may be enclosed with a package at the factory. Other types of direct premium are traffic builders, door-openers and referral premiums
Sampling;
A sign of a successful marketer is getting the product into the hands of the consumer. Sometimes particularly when a product is new or is not a market leader, an effective strategy involves giving a sample product to the consumer either free or for a small fee. The first rule is to use sampling only when a product can virtually sell itself. Thus the product must have benefits or features obvious to the consumer.