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A Study on Sales Promotion Price:

Price is the monetary value of the product. Price deals with selecting thepricing objectives,

setting the price, discounts, allowances, payment policiesand credit terms. It is very important to the customers as it decides the costthe customer has to pay to gain the product value.

Place:
This marketing tool stands for the various activities the company undertakesto make the product accessible and available to the customer. It involvesmarket size, channel selection and management, storage and physicaldistribution with the

ultimate purpose of efficiently supplying the companysoffer to the target market. To the customer, this marketing tool refers toconvenience.

Promotion:
Promotion stands for various activities the company undertakes tocommunicate and promote its products to the target market. It involvescommunication programs i.e. direct marketing, advertising, sales promotions,public relations and motivation of sales force. To the customer this toolprovides knowledge and information.

Page
3

A Study on Sales Promotion

The Promotion Mix of a company includes the following tools;

Advertising:
It is any paid form of non-personal presentation and promotion of ideas,goods or services by an identified sponsor.

Direct Marketing:
It refers to the use of mail, telephone and other non-personal

contact toolsto communicate with or solicit a response from specific customers andprospects.

Personal Selling:
Face to face interaction with one or more prospective purchasers for thepurpose of making a sale refers to personal selling.

Public Relations and Publicity:

It refers to the variety of programs designed to promote and or protect acompanys image or its individual products.

Sales Promotions:
The short-term incentive to encourage trial or purchase of a product or service refers to sales promotion. Whereas advertising offers a reason to buy;sales promotion offers an incentive to buy. Since sales promotion directlypush up the sales, increasing number of companies are undertaking salespromotion activities. Page 4

A Study on Sales Promotion

Sales Promotion
Sales promotion refers to the short-term incentives to encourage sales of aproduct or service. It consists of a diverse collection of incentive tools, mostlyshort-term, designed to stimulate quicker and greater purchase of products or services by consumers.

Purpose of Sales Promotion

Sales promotion tools vary in their specific objectives. They may be usedto attract new customers, to reward loyal customers and to increase therepurchase rates of occasional users. Sales promotion usually targets brandswitchers because non-users and users of other brands do not always noticea promotion. Sales promotions are thus also seen as a tool for breaking downloyalty to other products.Sales promotions also let manufacturers adjust to short term changes insupply and demand and differences in customer segments. They also

letmanufacturers to experiment by varying prices. Sales promotions also lead togreater consumer awareness of prices.To use sales promotion, a company must set objectives, select the right tools,develop the best program and implement it and evaluate the results. Page 5

A Study on Sales Promotion Objectives of Sales Promotion

The specific objectives set for sales promotions will vary with the type of the target market. For consumer promotions, objectives include encouragingpurchasing of larger sized units, building trial among non-users and attractingswitchers away from the competitors brands. For trade promotions, objectivesmay

include; including retailers to carry new items and higher level of inventory, encouraging offseasonal buying, of-setting competitive promotions,building brand loyalty of retailers and gaining entry into new retail outlets. Thesales force promotions help in encouraging support of a new product or model, encouraging more prospecting and stimulating off-seasonal sales. Butmost importantly, sales promotion should be focused on consumer relationship building.

Sales Promotion Tools

Many tools can be used to accomplish sales promotion objectives.Descriptions of the main promotional tools are as follows;

Consumer Promotion Tools

The main consumer promotion tools are as follows;

Samples:
They are offers of a trial amount of a product. It consists of invitingprospective purchasers to try the product without cost or at a

lower costin the hope that they will buy the product. Samples may be free or discounted. Page 6

A Study on Sales Promotion

Coupons:
Coupons are certificates that give buyers a saving when they purchasea specified product. Coupons can be mailed, placed in advertisementsor included with other products.

Rebates:
Rebate is also known as cash refund offers. Rebates are offers

torefund part of the purchase price of a product to its customers whosend a proof of purchase to the manufacturer. These are likecoupons except that the price reduction occurs after the purchaseand not at the point of sale

Price Packs:
Cents-off deals or price packs offer consumers savings by way of reducing prices that are marked by the producer directly on thepackage.

Premiums:

These are the goods offered either free or at a low cost as anincentive to buy a product. Premiums may be in-pack or on-pack(outside the pack). Page 7

A Study on Sales Promotion

Prizes:
They are offers of chance to win something such as cash, trips or goods by luck or through extra efforts. Contests of talent and sweepstakes or draws the most popular prize offering promotions.

Tie-in Promotions:

Tie-in promotions involve two or more brands or companies that team upon coupons, refunds or contests to increase their pulling powers.

Cross Promotions:
Cross promotions involve using one brand to advertise noncompetingbrand.

Advertising Specialties:
These are useful articles imprinted with an advertisers name, given asgifts to consumers.

Patronage Rewards:
They are cash or other awards for the regular use of companys productsor services. They are values (in cash otherwise) that are proportional toones patronage of a certain vendor or a group of vendors. They aim atbuilding brand loyalty.

PoP Promotions:
Point of purchase (PoP) includes displays and demonstrations that

takeplace at the point of purchase or sale. Page 8

24_24_project_report_on_sales_promotion
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