Sales promotions are generally short-term incentives. These incentives are given to encourage maximum sales of a product or service; however these incentives are not for consumers alone but can also be given to wholesalers and retailers by the company. Sales promotions comprise various communication activities, which try to offer added value to customers to stimulate immediate sales. These efforts are made to create product interest, purchase or trial. It is one of the four characteristics of promotional mix, while the other three are 1) Advertising, 2) Personal Selling and 3) Publicity or public relations. More than often media as well as non-media marketing communication is used for a pre-destined yet limited time. This is always done to benefit the company or organization in terms of: increase in consumer demand, stimulate market demand and perk up availability. Examples include the following:
• Point-of purchase displays
Sales Promotion Strategies
There are basically three kinds of sales promotion strategies
• Push strategy
• Pull strategy
• A combination of push & pull strategy
In this strategy the product is pushed through the distribution channels to the end user using promotions and personal selling techniques. The parent company promotes the product through resellers who further promote it to other sellers and so on till the product reaches the ultimate consumer.
In this strategy the consumer pulls the product from the manufacturer through marketing channel. This strategy requires the company to focus its marketing communication directly on the consumers with the hope of creating an interest which leads to demand for the product by the end-user.
Combination of Push & Pull
This strategy is usually used if the distributor is hesitant to carry a product, since it gets its required consumers without having to go to retail outlets. “Car dealers often provide a good example of a combination strategy. If you pay attention to car dealers’ advertising, you will often hear them speak of cash-back offers and dealer incentives.”
Because sales promotion is an initiative carried out by an organization to promote a product to ensure increase in sales so it has varied methods of promotion. Most of the time, sales promotions are creative and original therefore providing a comprehensive list of all methods is not possible, however some examples of the regularly used sales promotions activities are as follows:
• New Media
• CRM (customer relationship management)
• Free gifts
• Discounted prices
• Free samples
• Vouchers & coupons
• Joint promotions
• Competitions and prize draws/Cause-related or fair
• Finance deals
Sales promotion is directed at sales staff, customers and distribution channel members which may include wholesalers, retailers etc. When targeted at consumers it is called consumer sales promotion, when it is targeted at wholesalers and retailers it is called trade sales promotions. However by many it is considered as ‘gimmick’ because of the unusual methods some marketers use for sales promotion.