Lesson 24 Sales Promotion Suppose you go to the market to buy soap. The shopkeeper suggests that if you buy two soap cakes, an extra soap cake will be given to you free of cost under “buy 2 get 3” scheme. You feel attracted to buy as by doing so you are saving money on one soap. Moreover, soap is an item which is required on a regular basis, and so you can keep the extra two cakes to be used later. This is an approach of increasing sale of a product and it is quite different from what you have learnt in the earlier two lessons. Let us learn more about it in this lesson. 24.1 Objectives After studying this lesson, you will be able to: z explain the meaning of sales promotion; z state the objectives of sales promotion; z describe the various tools used in sales promotion; z recognise the role of each tool in promoting sales; and z describe the importance of sales promotion in business. 24.2 Meaning of Sales Promotion Every businessman wants to increase the sale of goods that he deals in. He can adopt several ways for that purpose. You might have heard about “lakhpati bano”, “win a tour to Singapore”, “30% extra in a pack of one kg”, “scratch the card and win a prize” etc. You might also have seen gifts like lunch box, pencil box, pen, shampoo pouch etc. offered free with some products.
Transcript
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Lesson 24Sales Promotion
Suppose you go to the market to buy soap. The shopkeeper suggests that if you buy two soapcakes, an extra soap cake will be given to you free of cost under “buy 2 get 3” scheme. You feelattracted to buy as by doing so you are saving money on one soap. Moreover, soap is an itemwhich is required on a regular basis, and so you can keep the extra two cakes to be used later.This is an approach of increasing sale of a product and it is quite different from what you havelearnt in the earlier two lessons. Let us learn more about it in this lesson.
24.1 ObjectivesAfter studying this lesson, you will be able to:
explain the meaning of sales promotion;
state the objectives of sales promotion;
describe the various tools used in sales promotion;
recognise the role of each tool in promoting sales; and
describe the importance of sales promotion in business.
24.2 Meaning of Sales PromotionEvery businessman wants to increase the sale of goods that he deals in. He can adopt severalways for that purpose. You might have heard about “lakhpati bano”, “win a tour to Singapore”,“30% extra in a pack of one kg”, “scratch the card and win a prize” etc. You might also haveseen gifts like lunch box, pencil box, pen, shampoo pouch etc. offered free with some products.
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There are also exchange offers, like in exchange of existing model of television you can get a newmodel at a reduced price. You may have also observed in your neighbouring markets notices of“winter sale”, “summer sale”, “trade fairs”, “discount upto 50%” and many other schemes toattract customers to buy certain products. All these are incentives offered by manufacturers ordealers to increase the sale of their goods. These incentives may be in the form of free samples,gifts, discount coupons, demonstrations, shows, contests etc. All these measures normally motivatethe customers to buy more and thus, it increases sales of the product. This approach of sellinggoods is known as “Sales Promotion”.
You have learnt about advertising and personal selling in the earlier lessons. Personal sellinginvolves face-to-face contact with specific individuals, while advertising is directed towards alarge number of potential customers. They also help in increasing sales of goods. Thus, advertisingcan be used as means of communication to inform potential customers about the incentivesoffered for sales promotion. Personal selling can as well include communication of the incentivesto individual customers. But, sales promotion differs from advertising and personal selling interms of its approach and technique. Sales promotion adopts short term, non-recurring methodsto boost up sales in different ways. These offers are not available to the customers throughout theyear. During festivals, end of the seasons, year ending and some other occasions these schemesare generally found in the market.
Thus, sales promotion consists of all activities other than advertising and personal selling that helpto increase sales of a particular commodity.
Intext Questions 24.1
Answer the following in the space provided after each question.
24.3 Objectives of Sales PromotionYou have learnt that the main objective of sales promotion is to increase sales. However, thereare also some other objectives of sales promotion. The objectives are:
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i. To introduce new products
ii. To attract new customers and retain the existing ones
iii. To maintain sales of seasonal products
iv. To meet the challenge of competition
Let us learn about these objectives in details.
(i) To introduce new products: Have you ever heard about distribution of free samples?Perhaps you know that many companies distribute free samples while introducing newproducts. The consumers after using these free samples may develop a taste for it and buythe products later for consumption.
(ii) To attract new customers and retain the existing ones: Sales promotion measureshelp to attract or create new customers for the products. While moving in the market,customers are generally attracted towards the product that offers discount, gift, prize, etcon buying. These are some of the tools used to encourage the customers to buy the goods.Thus, it helps to retain the existing customers, and at the same time it also attracts some newcustomers to buy the product.
(iii) To maintain sales of seasonal products: There are some products like air conditioner,fan, refrigerator, cooler, winter clothes, room heater, sunscreen lotion, glycerin soap etc.,which are used only in particular seasons. To maintain the sale of these types of productsnormally the manufactures and dealers give off-season discount. For example, you can buyair conditioner in winter at a reduced price. Similarly you may get discount on winter clothesduring summer.
(iv) To meet the challenge of competition: Today’s business faces competition all the time.New products frequently come to the market and at the same time improvement also takesplace. So sales promotion measures have become essential to retain the market share ofthe seller or producer in the product-market.
Intext Questions 24.2
Which of the following statements are true and which are false?
a. Discount on price is allowed only for those products of which sales tend to decline.
b. Sales promotion schemes are announced only when new products frequently comein the market.
c. Free samples are distributed to induce customers to try out new products.
d. Customers want to buy air-conditioners in summer to get the benefit of off-seasondiscount.
e. Sales promotion helps to retain existing customers as well as create new ones.
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24.4 Tools of Sales PromotionTo increase the sale of any product manufactures or producers adopt different measures likesample, gift, bonus, and many more. These are known as tools or techniques or methods of salespromotion. Let us know more about some of the commonly used tools of sales promotion.
(i) Free samples: You might have received free samples of shampoo, washing powder, coffeepowder, etc. while purchasing various items from the market. Sometimes these free samplesare also distributed by the shopkeeper even without purhasing any item from his shop.These are distributed to attract consumers to try out a new product and thereby create newcustomers. Some businessmen distribute samples among selected persons in order topopularize the product. For example, in the case of medicine free samples are distributedamong physicians, in the case of textbooks, specimen copies are distributed among teachers.
(ii) Premium or Bonus offer: A milk shaker along with Nescafe, mug with Bournvita, toothbrushwith 500 grams of toothpaste, 30% extra in a pack of one kg. are the examples of premiumor bonus given free with the purchase of a product. They are effective in inducing consumersto buy a particular product. This is also useful for encouraging and rewarding existingcustomers.
(iii) Exchange schemes: It refers to offering exchange of old product for a new product at aprice less than the original price of the product. This is useful for drawing attention to productimprovement. ‘Bring your old mixer-cum-juicer and exchange it for a new one just bypaying Rs.500’ or ‘exchange your black and white television with a colour television’ arevarious popular examples of exchange scheme.
(iv) Price-off offer: Under this offer, products are sold at a price lower than the original price.‘Rs. 2 off on purchase of a lifebouy soap, Rs. 15 off on a pack of 250 grams of Taj Mahaltea, Rs. 1000 off on cooler’ etc. are some of the common schemes. This type of scheme isdesigned to boost up sales in off-season and sometimes while introducing a new product inthe market.
(v) Coupons: Sometimes, coupons are issued by manufacturers either in the packet of a productor through an advertisement printed in the newspaper or magazine or through mail. Thesecoupons can be presented to the retailer while buying the product. The holder of the coupongets the product at a discount. For example, you might have come across coupons like,‘show this and get Rs. 15 off on purchase of 5 kg. of Annapurna Atta’. The reduced priceunder this scheme attracts the attention of the prospective customers towards new orimproved products.
(vi) Fairs and Exhibitions: Fairs and exhibitions may be organised at local, regional, nationalor international level to introduce new products, demonstrate the products and to explainspecial features and usefulness of the products. Goods are displayed and demonstratedand their sale is also conducted at a reasonable discount. ‘International Trade Fair’ in New
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Delhi at Pragati Maidan, which is held from 14th to 27th November every year, is a well-known example of Fairs and Exhibitions as a tool of sales promotion.
(vii) Trading stamps: In case of some specific products trading stamps are distributed amongthe customers according to the value of their purchase. The customers are required tocollect these stamps of sufficient value within a particular period in order to avail of somebenefits. This tool induces customers to buy that product more frequently to collect thestamps of required value.
(viii) Scratch and win offer: To induce the customer to buy a particular product ‘scratch andwin’ scheme is also offered. Under this scheme a customer scratch a specific marked areaon the package of the product and gets the benefit according to the message written there.In this way customers may get some item free as mentioned on the marked area or mayavail of price-off, or sometimes visit different places on special tour arranged by themanufacturers.
(ix) Money Back offer: Under this scheme customers are given assurance that full value of theproduct will be returned to them if they are not satisfied after using the product. This createsconfidence among the customers with regard to the quality of the product. This technique isparticularly useful while introducing new products in the market.
Intext Questions 24.3
A. Match the tools/techniques with their objectives.
Tools / Techniques Objectives
1. Free Samples (a) To induce customers to buy a product more frequently.
2. Exchange Schemes (b) Useful for drawing attention towards productimprovement.
3. Price-off offer (c) When a new product is to be introduced
4. Trading stamps (d) To boost up sales in off-season.
The business world today is a world of competition. A business cannot survive if its products donot sell in the market. Thus, all marketing activities are undertaken to increase sales. Producersmay spend a lot on advertising and personal selling. Still the product may not sell. So incentives
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need to be offered to attract customers to buy the product. Thus, sales promotion is important toincrease the sale of any product. Let us discuss the importance of sales promotion from the pointof view of manufacturers and consumers.
From the point of view of manufacturers
Sales promotion is important for manufacturers because
i. it helps to increase sales in a competitive market and thus, increases profits;
ii. it helps to introduce new products in the market by drawing the attention ofpotential customers;
iii. when a new product is introduced or there is a change of fashion or taste ofconsumers, existing stocks can be quickly disposed off;
iv. it stabilizes sales volume by keeping its customers with them. In the age of competition it isquite much possible that a customer may change his/her mind and try other brands. Variousincentives under sales promotion schemes help to retain the customers.
From the point of view of consumers
Sales promotion is important for consumers because
i. the consumer gets the product at a cheaper rate;
ii. it gives financial benefit to the customers by way of providing prizes and sending them tovisit different places;
iii. the consumer gets all information about the quality, features and uses of different products;
iv. certain schemes like money back offer creates confidence in the mind of customers aboutthe quality of goods; and
v. it helps to raise the standard of living of people. By exchanging their old items they can uselatest items available in the market. Use of such goods improves their image in society.
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Intext Questions 24.4
Given below are some statements, which are wrong. Correct them in the space provided beloweach.
a. “Money back offer” helps customers to improve their status in the society and so it isimportant to them.
e. For consumers sales promotion has no importance even if it provides information aboutimprovement in quality of goods because that does not bring monetary benefit.
24.6 What You Have LearntSales promotion consists of all promotional activities other than advertising and personalselling to increase sales of a commodity.Objectives of Sales Promotion
o To introduce new productso To attract new customers and retain the existingo To maintain sales of seasonal productso To challenge the competition
Tools / Techniques used in Sales PromotionFree samples
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SALES PROMOTON ANALYSIS OF LUX SOAP
RETAILER
(1)SALES PROMOTION SCHEMES OFFERED ON LUX
The primary analysis found that “Price off” is the best sales promotion schemes offered
on Lux (40% of the retailers agreed on this). “Product Bundling” was the next best with
30% of the retailers in favour of the same.
30.0%
15.0%
40.0%
10.0%
5.0% Product bundling
Prizes
Price off
Cross promotion
Cash refund
Schemes_
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(2)NORMAL DURATION OF SALES PROMOTION SCHEMES
The primary analysis found that “1 month – 3 month” is the normal accepted duration of
sales promotion schemes (60% of the retailers agreed on this). “More than 3 months”
was the next best with 25% of the retailers in favour of the same.
25.0%
15.0%
60.0%
More than 3 months
15 days – 1 month
1 month- 3 months
Duration
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(3)HOW OFTEN SALES PROMOTION SCHEMES ARE OFFERED ON LUX
The primary analysis found that “Less than 3 months” is the general perceived
frequency for sales promotion schemes offered on Lux (75% of the retailers agreed on
this). “3 months – 6 months” was the next best with 20% of the retailers in favour of the
same.
75.0%
5.0%
20.0%
Less than 3 months
6 months – 1 year
3 months – 6 months
Frequency
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(4)AFFECT ON SALES OF LUX DUE TO SALES PROMOTION SCHEMES
The primary analysis found that sales promotion schemes offered on Lux caused an
“Increase in sales” (75% of the retailers agreed on that). “Can’t say” was the next best
opinion with 15% of the retailers in favour of the same.
10.0%
75.0%
15.0%
No affect
Increase in sales
Can’t say
Affect_on_Sales
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(5)COMMUNICATION OF SALES PROMOTION SCHEMES
The primary analysis found that “Wholesalers” were the best medium of communication
of sales promotion schemes (40% of the retailers agreed on that). “Sales
representatives” was the next best with 25% of the retailers in favour of the same
25.0%
20.0%
40.0%
15.0%
Through salesrepresentatives
Through electronicmedia
Through wholesalers
Through print media
Communication
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(6)LEVEL OF SERVICING DURING SALES PROMOTION - COMPARISION
WITH COMPETITORS
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The primary analysis found that the level of servicing during sales promotion vis-à-vis
competitors was “Superior and more frequent (45% of the retailers agreed on that).
“Similar and more frequent” was the next best with 35% of the retailers in favour of
the same.
(7)AFFECT OF SALES PROMOTION SCHEMES ON DIFFERENT AGE
GROUP
45.0%
10.0%
35.0%
10.0%Superior and morefrequent
Superior and lessfrequent
Similar and morefrequent
Inferior and morefrequent
Comparision_with_competitors
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The primary analysis found that “26-45 age group” were the most affected by sales
promotion (55% of the retailers agreed on that). “16-25 age group” was the next best
with 30% of the retailers in favour of the same
(8)PROBLEMS FACED DURING & AFTER SALES PROMOTION SCHEMES
30.0%
15.0%
55.0%
16-25
46 -60
26-45Affect_on_perception_on_age_group
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The primary analysis found that “Stock out” and “Handling problem” were major
problems faced during and after sales promotion schemes (with 45% of the retailers in
favour of the same)
(9)INCENTIVES PROVIDED DURING SALES PROMOTION SCHEME
10.0%
45.0%
45.0%
Improper information
Stock out
Handling problem
Problems_faced
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The primary analysis found that “Cash discount” is the best incentive provided during
sales promotion scheme offered on Lux (55% of the retailers agreed on that). “Prizes”
was the next best with 25% of the retailers in favour of the same.
(10)BEST SALES PROMOTION SCHEME
10.0%
25.0%
10.0%
55.0%
Others
Prizes
Gifts
Cash discount
Incentives_provided
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The primary analysis found that “Price off” is the best sales promotion schemes
offered on Lux (55% of the retailers agreed on that). “Product Bundling” was the next
best with 20% of the retailers in favor of the same
10.0%
20.0%
55.0%
15.0%
Scratch card
Product bundling
Price off
Cash refund
Best_schemes
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CONSUMER’S ANALYSIS
(1)MOST PREFFERED CRITERION FOR SOAP SELECTION
The primary analysis found that “Price” is the most preferred criterion for soap
(28.75% of the consumers agreed on that). “Brand Value” was the next best with 15%
of the consumers in favour of the same.
Word of mouth
Packaging
Color of soap
Benefits
Promotional schemes
Price
Fragrance of soap
Brand value
Advertisement
Most prefferedcriterion
2.5%6.25%
3.75%
13.75%
12.5%
28.75%
10.0%
15.0%
7.5%
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(2)PERCEPTION ABOUT LUX
The primary analysis found that the major perception about Lux is that as a “Beauty
Soap” (50% of the consumers agreed on that). “Soap for all” was the next best with
23.75% of the consumers in favour of the same
15.0%
23.75%
11.25%
50.0%
Soap of filmstars
Soap for all
Nothing specific
Beauty soap
Perception about Lux
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(3)RECOLLECTION OF ANY ADVERTISEMENT OF LUX
The primary analysis found that advertisement recall of Lux was “Yes” for 91.25% of the
consumers and “No” for 9.75% of the consumers
91.25%
8.75%
Yes.
No
Recall of currentadvertisement
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(4)MOST EFFECTIVE MEDIUM OF SALES PROMOTION
The primary analysis found that “Advertising” is the most effective medium for sales
promotion (58.75% of the consumers agreed on that). “Sales Promotion” was the next
best with 31.25% of the consumers in favour of the same.
31.25%
58.75%
10.0%
Sales promotion
Advertising
Personal selling
Most effective mediumfor promotion
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(5)PREFERENCE OF PROMTIONAL SCHEME
The primary analysis found that “Price Off” is the most preferred promotional scheme
(42.5% of the consumers agreed on that). “Cross Promotion” was the next best with
15% of the consumers in favour of the same.
(6)PERCEPTION ABOUT CHANGE IN QUALITY DURING SALES
PROMOTION SCHEME
12.5%
42.5%
15.0%
13.75%
6.25%
3.75%
6.25%
Prizes
Price off
Cross promotion
Cash refund
Scratch card
Free trial
Discount coupons
Preference ofpromotional schemes
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The primary analysis found that the perception about change in quality during sales
promotion scheme was “Superior” (93.75% of the consumers agreed on that). “No
change” was the next best with 6.25% of the consumers in favour of the same
(7)TYPE OF IMPACT
93.75%
6.25%
No change
Superior
Perception aboutchange in quality
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The primary analysis found that the type of impact of sales promotion was “Continue
buying even after sales promotion offer is scrapped (38.75% of the consumers agreed
on that). “No change in buying behaviour” was the next best with 26.25% of the
consumers in favour of the same.
(8)COMMUNICATION OF SCHEME
13.75%
38.75%
21.25%
26.25%
Makes you switch toLux
Continue buying evenafter sales promotionoffer is scrapped
Buy it during salespromotion offer
No change in buyingbehavior
Type of impact
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The primary analysis found that the communication of schemes should be “Through
electronic media” (58.75% of the consumers agreed on that). “Through print media”
was the next best with 26.25% of the consumers in favour of the same
(9)PROBLEMS FACED DURING SALES PROMOTION SCHEMES
3.75%
26.25%
58.75%
11.25%
Through salesrepresentatives
Through print media
Through electronicmedia
Through company’sstall
Communication ofschemes
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The primary analysis found that “Stock Out” is the biggest problems faced
during sales promotion schemes (42.5% of the consumers agreed on that). “Any other”
was the next best with 21.25% of the consumers in favour of the same.
(10)COMPARISION WITH COMPETITORS
The primary analysis found that Lux’s promotion schemes were “Superior and more
frequent” vis-à-vis its (48.75% of the consumers agreed on that). “Similar and more
frequent” was the next best with 35% of the consumers in favour of the same
(11)AFFECT ON AGE GROUP
48.75%
12.5%
35.0%
3.75%
Superior and morefrequent
Superior and lessfrequent
Similar and morefrequent
Similar and less frequent
Comparison withcompetitors
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The primary analysis found that “Adults” were the most affected upon by sales
promotion 56.25% of the consumers agreed on that). “Youngsters” was the next best
with 32.5% of the consumers in favour of the same.
12)PRICE OF SOAP
6.25%
2.5%
32.5%
2.5%
56.25%
Kids
Adults
Youngsters
Older people
Adults
Affect on age group
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The primary analysis found that the customers perceived the price of soap to be
“Satisfactory” (42.5% of the consumers agreed on that). “Neutral” was the next best
with 32.5% of the consumers in favour of the same.
42.5%
15.0%
2.5%
32.5%
7.5% Satisfied
Very satisfied
Satisfied
Neutral
Dissatisfied
Price
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(13)DISTRIBUTION NETWORK
The primary analysis found that the customers perceived the distribution network of soap
to be “Satisfactory” (47.5% of the consumers agreed on that). “Very Satisfied” was the
next best with 26.25% of the consumers in favour of the same
(14)QUALITY
47.5%
5.0%
26.25%
21.25%
Satisfied
Dissatisfied
Very satisfied
Neutral
Distribution Network
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The primary analysis found that the customers perceived the quality of soap to be
“Satisfactory” (47.5% of the consumers agreed on that). “Neutral” was the next best
with 23.75% of the consumers in favour of the same.
(15)ADVERTISING
47.5%
8.75%
7.5%
12.5%
23.75%
Satisfied
Dissatisfied
Very satisfied
Satisfied
Neutral
Quality
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The primary analysis found that the customers perceived the advertising of
soap to be “Satisfactory” (56.25% of the consumers agreed on that). “Neutral” was the
next best with 26.25% of the consumers in favour of the same
(16)PROMOTIONAL SCHEMES
56.25%
26.25%
17.5%
Satisfied
Neutral
Dissatisfied
Advertising
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The primary analysis found that the customers perceived the promotional schemes of
soap to be “Satisfactory” (63.75% of the consumers agreed on that). “Neutral” was the
next best with 21.25% of the consumers in favour of the same.
9.CONCLUSION
21.25%
7.5%
7.5%
63.75%
Neutral
Dissatisfied
Very satisfied
Satisfied
Promotional Schemes
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Companies need to systematise information flow regarding sales promotion activities
particularly at dealer - retailer level. Ensuring proper information flow and devising
checks and measures to reduce misappropriations and implementation flows should be
considered critical aspects for the success of sales promotion activities by the companies.
As retailing is fragmented, direct reach by companies is next to impossible. Through
dealers and proper feedback mechanism, companies keep in touch with the market. From
the study it was found that smaller retailers felt neglected and not enthused to implement
the schemes, particularly when additional handling, stocking, accounting was required on
the part of a retailer without compensatory margins. It can be seen that the retailer and
consumer perceptions matched with respect to preferences of schemes, underlying
motivations and role of mass media. This implies that the retailer would be a rich source
of information about the consumer and the likely response to sales promotion activities.
Developing a system to tap such responses from time to time both at retailer and
consumer level would be helpful for planning future sales promotion activities. In order
to build trust and commitment companies should tap preferences, perceptions of retailers
as well as consumers.
APPENDIX
RETAILER’S QUESTIONNAIRE
(1)What are the sales promotion schemes offered on Lux ?
(a)Price off
(b)Discount coupons
(c) Product bundling
(d)Contests
(e)Scratch card
(f)Cross promotion
(g)Cash refund
(h)Prizes
(i)Free trial
(j)Any other
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(2)What is the normal duration of the sale promotion scheme offered by Lux?
(a)Less than 15 days
(b)15 days – 1 month
(c)1 month- 3 months
(d)More than 3 months
(3)How often sales promotion schemes are offered on Lux?
(a)Less than 3 months
(b)3 months – 6 months
(c)6 months – 1 year
(d)More than 1 year
(4) Affect on sales of Lux due to sales promotion schemes offered ?
(a) Increase in sales
(b) Decrease in sales
(c ) No affect
(d) Can’t say
(5)How is the sales promotion scheme communicated to you?
(a) Through wholesalers
(b) Through sales representatives
(c) Through print media
(d) Through electronic media
(e) Through Manufacturer
(6) Level of servicing during sales promotion?
(a) Very Prompt
(b) Prompt
(b) Moderate
(c) Slow
(d) Very slow
(7) Comparison of sales promotion scheme offered on Lux with competitors?
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(a)Superior and more frequent
(b)Superior and less frequent
(c)Similar and more frequent
(d)Similar and less frequent
(e)Inferior and more frequent
(f) Inferior and less frequent
(8) Perception of which age group gets most affected due to sales promotion schemes
offered?
(a) 8-15 yrs
(b) 16-25 yrs
(c) 26-45 yrs
(d) 46 -60 yrs
(e) 60 and above
(9) What are the problems faced during and after the sales promotion schemes?
(a) Handling problem
(b) Stock out
(c) Improper information
(d) Leftover
(10) What are the incentives provided to you during sales promotion schemes?
(a) Prizes
(b) Sponsored tour
(c) Gifts
(d) Cash discount
(e) Lucky draw` coupons
(11) Which sales promotion schemes you think is the best for you to handle?
(a)Price off
(b)Discount coupons
(c) Product bundling
(d)Contests
(e)Scratch card
(f)Cross promotion
(g)Cash refund
(h)Prizes
(i)Free trial
(j)Any other
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CONSUMER’S QUESTIONNAIRE
(1)Which brand of bathing soap do you use ?............................................................................................
(2) Is the same brand of soap used by your other family members?
e. For consumers sales promotion has no importance even if it provides information aboutimprovement in quality of goods because that does not bring monetary benefit.
24.6 What You Have LearntSales promotion consists of all promotional activities other than advertising and personalselling to increase sales of a commodity.Objectives of Sales Promotion
o To introduce new productso To attract new customers and retain the existingo To maintain sales of seasonal productso To challenge the competition
Tools / Techniques used in Sales PromotionFree samples
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Premiums or Bonus offero Exchange schemeso Price-off offero Couponso Fairs and Exhibitionso Trading stampo Scratch and win offero Money Back offer
Importance of Sales promotion
For manufacturers For consumers
Increases the volume of sales Goods are available cheaper rate Helps to introduce new products Financial benefits to the customers
in the market Generates awareness about new Enables quick disposal of existing stocks brands
Stabilizes the volume of sales Creates confidence in the mind of
customers regarding quality Raise standard of living
24.7 Terminal Exercise1. Define Sales Promotion.
2. State the importance of Sales Promotion from the point of view of manufacturers.
3. State the importance of Sales Promotion from the point of view of consumers.
4. List any six tools used in Sales Promotion
5. State the objectives of Sales Promotion
6. Explain the meaning of ‘Sales Promotion’. Why is Sales Promotion necessary?
7. Explain any two techniques of Sales Promotion, with example.
8. State any two objectives of Sales Promotion.
9. Explain – “Price off offer” and “Free-Samples” as techniques of Sales Promotion.
10. Explain how Sales Promotion techniques help in promoting sales.
11. A toothpaste company is giving 250 grams toothpaste free with a pack of 500 gm toothpaste.Name this technique of sales promotion. What is the specific objective of this scheme?Explain two more schemes of Sales Promotion other than this.
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12. ‘To introduce new products, to create new customers and retain the existing ones, to remaincompetitive’ are the objectives of Sales promotion. Explain how?
13. Define Sales Promotion. What are the objectives of Sales Promotion?
14. Explain the term ‘Sales Promotion’. Discuss any four techniques of Sales Promotion?
15. ‘Sales Promotion is important both for manufacturer and consumers’. Explain how?
24.8 Key to Intext Questions24.1 a) Sales Promotion refers to all activities other than advertising and
personal selling that help to increase sales of a particular commodity.
b) Advertising can be used as a means of communication to inform potentialcustomers about incentives for sales promotion.
24.2 a) False
b) False
c) True
d) False
e) True
24.3 1. (c)
2. (b)
3. (d)
4. (a)
24.4 a. Exchange offer as a sales promotion measure helps consumers to improve theirstatus in the society and so it is important to them.
b. The importance of sales promotion to dealers lies in the fact that existing stocks canbe quickly disposed off when there is change in the fashion or taste of consumers.
c. To the dealer, sales promotion is important because customers are thereby inducednot to change over to new brands.
d. Sales promotion is important to consumers as goods are available at cheaper rates.
e. For consumers, sales promotion is important because it provides information aboutimprovement in quality of goods.
Activity For You
i. Make an enquiry from the nighbouring market retailers at what time they offer stock clearance
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sale and why.
ii. Collect information through advertisements in newspapers and magazines regarding varioussales promotion schemes introduced by manufacturers.
REFERENCES
1. Kotler Phillip, “Marketing Management : Analysis, Planning, Implementation and
Control,” 9th
ed., Prentice Hall of India, 1997.
2. Strang Roger, “Sales Promotion fast growth faculty management,” Harvard Business
3. Review, 1976.
4. www.indiainfoline.com
5. hul.co.in
6. Aradhna Krishna, Imran S. Curriuun and Robert W. Shoemaker, “Consumer Perceptions
of
7. Promotional Activity,” Journal of Marketing, Vol.55 (April 1991), pp.4-16.
8. Huff Lenard C., Alden Dana L., “An Investigation of Consumer Response to Sales
9. Promotions in Developing Markets: A Three Country Analsysis,” Journal of Advertising
