Sales promotion

10 Key excerpts on "Sales promotion"

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  eBook - PDF

  Handbook of Marketing

  • Barton A Weitz, Robin Wensley, Barton A Weitz, Robin Wensley(Authors)
  • 2002(Publication Date)
  • SAGE Publications Ltd

    (Publisher)

  I NTRODUCTION Sales promotion is a ubiquitous, and in some cases dominant, component of the firm’s marketing mix. It can be defined as an ‘action-oriented marketing event whose purpose is to have a direct impact on the behavior of the firm’s customers’ (Blattberg & Neslin, 1990: 3). Sales promotions include price discounts, feature advertising, special displays, trade deals, reward programs, coupons, rebates, contests, and sweepstakes. As implied by their definition, pro-motions have a noticeable impact on the behavior of customers. However, they tap into and induce impor-tant psychological processes in the consumer, as well as significant competitive response. As a result, all three foundations of the marketing field: behavioral science, economics, and management science (par-ticularly econometrics), have contributed signifi-cantly to our knowledge base on Sales promotion. In fact, there has been a veritable explosion of research over the past decade, and although we have learned a lot, there is still much more to understand. The purpose of this chapter is to synthesize what we know and don’t know about sales promo-tion. The focus is on substantive knowledge rather than methodology per se . However, we discuss methodological issues as they pertain to our abil-ity to pinpoint substantive knowledge. We have organized the chapter into three domains: ‘Why Sales promotion’ briefly reviews the behavioral and economic bases for the existence of sales pro-motion. ‘How Promotion Works’ discusses the various customer behaviors that are influenced by Sales promotion. ‘Promotion Types’ discusses what we know about specific forms of promotion. We conclude with a brief discussion of future research opportunities. W HY S ALES P ROMOTION ? Managers often justify their use of promotions simply as the most reliable way to increase sales. The sales impact is tangible, immediate, and therefore attractive to results-oriented managers.

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  Integrated Marketing Communication

  Advertising and Promotion in a Digital World

  • Jerome M. Juska(Author)
  • 2021(Publication Date)
  • Routledge

    (Publisher)

  Motivating Shoppers to React and Respond to Special Offers

  DOI: 10.4324/9780367443382-9

  Learning Objectives

  1. Describe and understand the purpose and value of Sales promotion
  2. Develop the skills to write a specific Sales promotion objective
  3. Recognize the relationships between promotions and Integrated Marketing Communications (IMC)
  4. Know how to select the most appropriate promotion for a brand

  Introduction

  In this chapter, we will review the functions of Sales promotion activities, events, and programs and their relationship with IMC. Sales promotion strategies are frequently combined with advertising messages to motivate shoppers, potential buyers, and customers to purchase a product or service. A variety of incentives are offered to stimulate action and accelerate the decision-making process for those searching online or comparing brands.

  Sales promotion activities, events, and programs can originate from manufacturers, wholesalers, or retailers. Promotions designed to reach consumers can include financial incentives, value offerings, psychological rewards, or targeted interactions. The effectiveness of a Sales promotion strategy is based on measurements that are relevant to the strategy selected.

  Consumer promotions and business-to-business (B2B) promotions use similar strategies, but B2B concentrates on negotiated prices and concessions. Both consumer and B2B marketing involves accelerating the movement of product inventory through channels of distribution.

  What Is Sales promotion?

  Definition of a Promotion

  In classical marketing terms, promotion is one of the original four Ps. But, it frequently caused confusion because advertising was included in this definition. To complicate the situation even more, the common term in the marketing industry is Sales promotion. Is the only purpose of a promotion to stimulate sales? What about the other benefits from promotional activities? And, how does Sales promotion relate to everything else from IMC?

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  Practice of Advertising

  • Adrian Mackay(Author)
  • 2007(Publication Date)
  • Routledge

    (Publisher)

  20  Sales promotion in Marketing

  Brenda Simonetti

  Learning outcomes

  By the end of this chapter you will:

  •  Have a clear understanding of what Sales promotion is and its origins. •  Review best practice in delivering Sales promotion that meets its objectives. •  Understand the place for Sales promotion complimentary to advertising as part of an integrated marketing communications mix.

  20.1 Defining Sales promotion

  The very nature and diversity of Sales promotion has always presented a challenge in deciding how it is defined. The Institute of Sales promotion (ISP), the trade association and professional body of the industry, has defined it as:

  A consumer or business directed marketing activity that enhances product appeal by offering an extra incentive to purchase or participate.

  In the simplest terms, Sales promotion is all about ‘adding value’ and ‘prompting action’ in order to achieve predefined marketing objectives. The added value can be ‘real’ or ‘perceived’ but must constitute something additional to the basic brand proposition.

  20.2 How it all began

  Although it is claimed that the first ever Sales promotion was when Adam gave Eve the apple, the discipline as we know it today dates back to the mid nineteenth century when the Co-operative Society was founded. The popularity of the dividend prompted a competitor to launch the first trading stamp, a technique that arrived in the USA towards the end of the nineteenth century. Almost a hundred years later, in 1958, the widely acclaimed Green Shield Stamp Trading Company was launched in the UK.

  As early as 1890, Quaker Oats carried free-mail-in offers for bone china cereal bowls and silver plated spoons. The Victorian era also saw the first in-pack premiums ranging from cigarette cards to the packing of china plates and bowls in packets of Quaker Oats. While admiring the enterprise of these early promoters it has to be recognised that at the time there were no Codes of Practice and little legislation. In spite of the First World War, promotions flourished until the recession of the 1930s that, inevitably, led to deep price-cutting. The Second World War, with rationing and fixed prices, brought an abrupt end to entrepreneurial marketing. The big revival came in the 1950s catalysed by the end of rationing, the start of commercial television, the conversion of the major multiples to self-service, and the birth of the Sales promotion consultancy. Since that time, Sales promotion has grown in stature and is now a £20 billion industry recognised as one of most important tools in the marketer’s armoury.

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  Marketing

  • William Pride, O. C. Ferrell(Authors)
  • 2019(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  To control and evaluate sales force performance, sales manag- ers use information obtained through salespeople’s call reports, customer feedback, and invoices. 18-6 Describe Sales promotion. Sales promotion is an activity or a material (or both) that acts as a direct inducement, offering added value or incentive for the product to resellers, salespeople, or consumers. Marketers use Sales promotion to identify and attract new customers, introduce new products, and increase reseller inventories. Sales promotion techniques fall into two general categories: consumer and trade. Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. PART 7: Promotion Decisions 18-7 Review consumer Sales promotion methods. Consumer Sales promotion methods encourage consum- ers to patronize specific stores or try a particular product. These Sales promotion methods include coupons; cents-off offers; money refunds and rebates; frequent-user incen- tives; point-of-purchase displays; demonstrations; free samples and premiums; and consumer contests, games, and sweepstakes. 18-8 Review trade Sales promotion methods. Trade Sales promotion techniques can motivate resellers to handle a manufacturer’s products and market them aggres- sively. These Sales promotion techniques include buying allowances, buy-back allowances, scan-back allowances, mer- chandise allowances, cooperative advertising, dealer listings, free merchandise, dealer loaders, premium (or push) money, and sales contests.

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  Marketing Hospitality

  • Cathy H. C. Hsu, Tom Powers(Authors)
  • 2002(Publication Date)
  • Wiley

    (Publisher)

  Unlike advertising that is used to influence consumer attitudes over a period of time, a Sales promotion usually includes the provision of a financial incentive to build immediate sales. A good Sales promotion, ideally, should also support the company’s image. Figure 13.1 lists the probable reasons for using sales promo- tions. The most common form of Sales promotion in foodservice is a deal that offers cou- pons, discounts, or premium merchandise. In upscale operations, instead of decreasing prices, special events are used to enhance perceived value for the customers. Most Sales promotion activities are also keyed to the prevailing economic conditions. For example, coupons and value pricing are especially popular during a recession, when consumers either have less money in their pockets or are afraid that they will soon have less money to spend. In more prosperous times, the emphasis usually shifts to activities that focus on value enhancement. Like any other element of the marketing mix, promotions should be designed to target a specific audience, such as families, teens, or business travelers. Sales promo- tions are not spur-of-the-moment activities, and, especially in multiunit companies, they require considerable advance planning. A means of evaluation should also be built into the promotion plan. Customary practice in the industry for measuring the impact of a promotion is to compare the operating results in the period immediately preceding the promotion with the period during the promotion and the period im- mediately following it. Sometimes the results of the corresponding period of the pre- ceding year is used. These comparisons must be adjusted if unusual events, such as a major concert or a football game, occur during any of these periods. A number of concerns about promotions have been expressed. Many operators use Sales promotion 297 promotions as a quick fix for declining sales without identifying the real reasons for the business’s deterioration.

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  Marketing (AU), P-eBK

  • Greg Elliott, Sharyn Rundle-Thiele, David Waller, Ingo Bentrott, Siobhan Hatton-Jones, Pete Jeans(Authors)
  • 2020(Publication Date)
  • Wiley

    (Publisher)

  Sales promotion methods aimed at the consumer include: free samples, premiums, loyalty programs, contests, coupons, discounts, refunds, rebates; point of purchase promotions; and event sponsorships. Trade promotions include trade allowances, gifts and premium money, cooperative advertising and dealer listings. 9.6 Understand the nature of personal selling. Personal selling is personal communication with consumers to persuade them to buy products. Personal selling is the most expensive form of promotion as it requires the full dedication of a salesperson to a customer, but it does have strong advantages, in particular that the salesperson can tailor the promotion to the customer’s needs. Salespeople play a very important role for some companies and are the public face of the business. Many marketing organisations manage the personal selling process by using the INPLCF model, which stands for Information, Needs, Product, Leverage, Commitment/close and Follow-up. In managing the sales force, the sales manager needs to establish sales force objectives and targets; determine the appropriate size and location of the sales force; recruit salespeople; train salespeople; remunerate salespeople; and monitor and motivate performance. 296 Marketing 9.7 Discuss a range of marketing communication options additional to the traditional promotion mix. There are many promotional methods available to an organisation in addition to advertising, public relations, Sales promotion and personal selling. Sponsorship is the paid association of a brand with an event or person. A company develops a sponsorship relationship with a particular event, providing financial support in return for the right to display a brand name, logo or advertising. Ambush marketing is the presentation of marketing messages at an event that is sponsored by an unrelated business or even a competitor, and can be extremely successful.

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  Management of Marketing

  • Paul Reynolds, Geoff Lancaster(Authors)
  • 2005(Publication Date)
  • Routledge

    (Publisher)

  These main types of promotions are also applicable to the industrial sector although such promotions are more likely to be closer in type to promotions mounted by manufacturers of consumer goods for retailers. In essence, they will be designed to gain optimum-sized orders over long periods.

  10.8.3 Sales promotion Planning

  There are a number of stages during the running of a particular promotion. As with any business task, a full plan should be prepared to ensure that each stage is reached. An example of a planned sequence of stages in the context of Sales promotion is:

  1. analyse the problem/task,
  2. define objectives,
  3. consider and/or set the budget,
  4. examine the types of promotion likely to be of use,
  5. define the support activities (e.g. advertising, incentives, auxiliaries),
  6. testing (e.g. a limited store or panel test),
  7. decide measurements required,
  8. plan timetable,
  9. present details to sales force, retailers, etc.,
  10. implement the promotion,
  11. evaluate the results.

  10.8.4 Advantages and Disadvantages of Sales promotions

  Advantages:

  • easily measured response,
  • quick achievement of objectives,
  • flexible application,
  • can be relatively cheap,
  • direct support of sales force.

  Disadvantages:

  • price-discounting can cheapen brand image,
  • short-term advantages only,
  • can cause problems with retailers who might not want to co-operate,
  • difficulty in communicating brand message.

  10.8.5 Importance of Sales promotion

  There is often disagreement about what marketing expenditures should be attributed to Sales promotion. A free plastic daffodil with every packet of washing powder is certainly a Sales promotion, but price reductions can be confusing, in that ‘15% extra “free” ‘ is a Sales promotion, but it might also be regarded as a price discount. Sales promotional expenditure data can easily be collected and analysed. The amount spent on Sales promotion has been increasing for a long time, and this is recognition of its importance as a tool of marketing communication.

  10.9 Telephone Marketing

  As a marketing medium the telephone derives its power from its transactional nature (i.e. one person in a controlled conversation with another). What originally began as ‘ordering by telephone’ soon evolved into telemarketing, a concept that can be defined as:

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  Visualizing Marketing

  From Abstract to Intuitive

  • S. Umit Kucuk(Author)
  • 2016(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  In other words the objective of advertising is to create demand before consumers get to the store while Sales promotions aims at changing their preferences at the point of sale in the store. Because Sales promotion uses many price-related tools, strategies can be quickly modified. Advertising does not affect sales immediately the way Sales promotions do; rather it focuses on building long-term relationships with consumers to generate positive attitudes and loyalty. On the other hand, the effects of Sales promotion are easy to see in sales, as many Sales promotion tactics, especially temporary price reductions, can easily create brand switchers. However, these increased sales do not produce long-term effects, and sales drop sharply immediately after the promotion period. This, in turn, creates sales spikes rather than slowly increasing trends. Thus, the results of Sales promotion can be seen within days or even hours, as opposed to advertising where the response is measured in months and years, and sometimes there is no response at all. In other words, Sales promotions can be used more like a tactical tool to create short-term brand-switching behaviors rather than a long-term strategic tool like an advertisement. When trade deals initiated by manufacturers are passed on to retailers and their consumption spaces, high sales volumes and initially sharp spikes in sales are expected as most consumers try to get the maximum value for their money. Although sales go down at the end of the promotion period, there can be some small aftershock sales increases as the initial excitement created by the Sales promotion lasts for a little while (see Fig. 6.5). This over-consumption or sales spike eventually leads to inventory shortages and stock-out problems, and the resultant sharp drop in sales is shown as “inventory effects” in Fig. 6.5. The stock-out situation is a natural result of Sales promotions.

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  Advertising, Promotion, and other aspects of Integrated Marketing Communications

  • J. Craig Andrews, Terence Shimp(Authors)
  • 2017(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  As a brand Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. CHAPTER 19 | CONSUMER Sales promotion: SAMPLING AND COUPONING 429 Brand Management Objectives The overarching objective of consumer-oriented promo-tions is to promote increased sales ( Sales promotion 5 promoting sales ). Secondary to this overall goal, and in concert with trade-oriented promotions (the subject of the previous chapter), consumer promotions are capable of achieving various sales-influencing objectives for the brand: 1 ▪ ▪ Gaining trade support for increased quantities of our brand during a limited period and providing superior display space for our brand during this period ▪ ▪ Reducing brand inventory for a limited period when inventories have grown to an excessive level due to slow sales, economic conditions, or effective compet-itive actions caused ▪ ▪ Providing the sales force with increased motivation during a promotional period to gain greater distribu-tion for our brand, better display space, or other pref-erential treatment vis-à-vis competitive brands ▪ ▪ Protecting our customer base against competitors’ efforts to lure them away ▪ ▪ Introducing new brands to the trade and to consumers ▪ ▪ Entering new markets with established brands ▪ ▪ Promoting trial purchases among consumers who have never tried our brand or achieving retrial from those who have not purchased our brand recently ▪ ▪ Rewarding present customers for continuing to pur-chase our brand ▪ ▪ Encouraging repeat purchasing of our brand and reinforcing brand loyalty ▪ ▪ Enhancing our brand’s image ▪ ▪ Increasing advertising readership ▪ ▪ Facilitating the process of continually expanding the contact information in our database As can be seen, consumer promotions are used to accomplish a variety of objectives during a specified time period, with the ultimate goal of driving increased sales of our brand.

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  FBO Management

  Operating, Marketing, and Managing as a Fixed-Base Operator

  • C. Daniel Prather(Author)
  • 2024(Publication Date)
  • Aviation Supplies & Academics, Inc.

    (Publisher)

  If advertising objectives are sales-related (e.g., to increase sales or improve market share) then it is possible to determine whether the advertising has been effective in reaching customers. However, advertising is only one cause of sales. Other aspects of marketing, including improved product or service and other forms of promotion such as personal selling and pricing, all contribute to sales performance.

  Some firms pre-test advertising effectiveness before starting the campaign. Focus groups (composed of a panel of customers or knowledgeable individuals) might be asked to rate which ad would most influence them. Customers might be asked to evaluate several ads and then recall the source and as much of the content of the message as they can. The uniqueness of an ad can be best measured by this method. Post-testing an advertisement can also be used. For example, results can be measured by the number of orders mailed back, coupons brought in, or customers who responded to an ad for a sale. Recall tests can be used in which customers are asked to recall everything about an ad in a trade magazine or newspaper to which they subscribe. This test measures an ad’s ability to be noticed and remembered.

  Sales promotion

  Sales promotion activities supplement both advertising and personal selling. It is usually not directed at as large an audience as advertising but at much larger groups than a typical personal selling effort. Included are such activities as trade shows, exhibits, coupons, trade allowances, demonstrations, and dealer incentives.

  Given the diversity of Sales promotion activities, it is apparent that they are designed to reach many target markets and to achieve a variety of objectives, such as the following:

  1. Identifying sales leads (trade shows)
  2. Inducing prospective customers to try a new service (flight instruction coupons)
  3. Increasing the share of an established market (price breaks on a block of charter hours)
  4. Improving name recognition (calendars, matchbooks, T-shirts, pens, and posters with the firm’s name)

  Sales promotion has several distinct advantages. First, it involves the prospective customer. Customers must return the flight coupons to receive instruction, or they must use free samples or discard them. Additionally, Sales promotion activities can offer true value to the user; money can actually be saved. Finally, Sales promotions can be directed to narrowly defined market segments. For example, flight coupons can be mailed to prospective users in high-income areas, or a brochure announcing a specially priced maintenance package can be directed to particular aircraft owners.

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