Rajasthan Board RBSE Class 12 Business Studies Notes Chapter 7 Sales Promotion
Today’s market is a ‘Buyer’s Market’, where the consumer is regarded as the king of market. Markets are flooded with a wide range of goods and are having many substitutes. Cut¬throat competition prevails.
In such market situation, for boosting the sales, many promotional tools are used by marketeers viz. advertisement, personal selling, sales promotion, etc.
Sales promotion consists of all promotional activities other than advertising, personal selling and publicity which are used to. encourage the buyers to make immediate purchase of a product or to boost its sale.
Sales promotion includes all those activities which are undertaken for increasing sales.
The literal meaning of sales promotion is to increase the sale of any goods or service.
We can say that sales promotion includes activities of non-routine nature to promote
sales. Sales promotion includes those short-term incentives which are non-recurring and non-routine activities that stimulate demand for products.
Objectives / Functions of Sales Promotion
- Builds Goodwill
- Educates Customers
- Stabilises Sales
- Maintains Relations
- Facilitates Marketing Control
- It aims at stimulating demand by encouraging and persuading new and existing customers to buy the product.
Importance of Sales Promotion
- Increases effectiveness of advertising and salesmanship.
- Increases sales volume.
- Meets the challenges of competition.
- Increases goodwill.
- Increases consumer knowledge and confidence.
- Enable entry in new market.
- Increases profits.
- More facilities / support to intermediaries.
- Improves the standard of living.
- Others.
Techniques of Sales-Promotion
Sales promotion efforts are directed at final consumers and designed to motivate, persuade and remind them of the goods and services that are offered and it pushes products towards the buyers, supplementing advertising and personal selling.
The scope of sales promotion is very wide and different sales promotion techniques are adopted. The type of sales promotion methods may by grouped under three categories :
- On the basis of objectives.
- On the basis of products.
- On the basis of area of sales.
Objective Based Sales Promotion activities are discussed below :
Consumer’s Sales Promotion Techniques :
Consumer’s sales promotion techniques are directly related to the consumers and persuade them to buy more and more quantity of goods. Major consumer-oriented Sales promotion techniques are :
- Free Samples
- Contests
- Rebate or price-off offer
- Discount coupon
- Trade fairs and exhibitions
- Premium (packaged premium)
- Quantity gift
- Product demonstration
- After-sales services
- Packaging.
Dealer’s Sales Promotion Techniques
Trade promotion or dealer’s promotional tools can persuade the wholesalers or the retailers to carry the brand and also induce them to promote the brand through featuring, display etc. to push the product. Main dealers sales promotion techniques are :
- Contest
- Allowances (Purchase allowance, advertising, display, shelf space, etc.)
- Meetings and Conferences
- Training Programmes
- Fashion shows
- Premium or free goods
- Push money and Novelities
- Special facilities and services
- Management Assistance
Important Glossary
- Sales Promotion : Sales promotion refers to short-term incentives offered to stimulate on-the-spot buying.
- Middlemen : Middlemen are the persons who act as a mid-way in between the manufacturer and final consumer.
- Wholesaler: Wholesalers are the traders who buy the products in large quantities from the manufacturer and supply them to retailers.
- Retailer : Retailers are the traders who supply the product to the consumers and buy the product from the wholesalers.
- Samples : Samples are the tools of sales promotion, by which products are supplied in small quantity for trial basis, free of cost.
- Coupons : Coupon is a certificate that entitles its holder a specified saving on the purchase of a specified product.
- Premium : Premium is a complementary gift that a buyer gets along with the product or inside the product package. Example : A sharpener is provided for free with a pencil packet.
- Price off : In price off, the product is offered at a price lower than the normal price.
Important Definitions
According to American Marketing Association: Sales promotion includes all those marketing activities other than personal selling, advertising and publicity, that stimulate consumer purchasing and dealer effectiveness, such as displays, shows and exhibitions etc. and various non-recurring selling efforts not made in the ordinary routine.
According to A.H.R. Delens : Sales promotion means any steps that are taken for the purpose of obtaining an increase in sales. Often, this term refers specially to selling efforts, that are designed to supplement personal selling and advertising, and by coordinating, helps them to become more effective.
According to Roger A. Strong: Sales promotions are short-term incentives to encourage purchase or sale of a product or service.