a. In-Pack, On-Pack, and Container Premiums: These various terms for premiums are primarily used to distinguish the difference in methods of rewarding the consumers. Coupons may be issued by the manufacturers either directly by mail through sales-force or through the dealers. Customers are invited to compete on the basis of creative skill, such contests create brand awareness and stimulate interest in the brand, and it acquaints consumers with brand usage and benefit. Before publishing your Articles on this site, please read the following pages: 1. This benchmark should then be related to the market size and the potential estimated in market. Privacy Policy3. When used as an offensive weapon, the objective is to generate additional sales and increase market share and long run profits. It is very common that big business enterprises convey their greetings and thanks to the people through newspapers and other media. Especially when the concept is new, most people are hesitant to take risks. 7. People matter, and the human contact that BDMs offer can go a long way toward increasing your travel and tourism sales. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. 5. Some sectors offer instant draws and assured gifts to their customers when they make purchases. These two examples present the use of the same method of sales promotion. Inducing retailers to promote the brand by local advertising and POP display. ix. There are occasions when the company decides to move in new geographic markets, such refund promotion may prove to be quite effective in motivating high-risk perceivers to decide in favour of the promoted product as the perceived risk is likely to appear as manageable. 30,000 in 12 equal instalments of 2,500 each by post-dated cheques and get a bike on the spot.” This tool of promotion misleads the customers and so should be avoided by the marketers. The products are generally banded together physically, or put together in a blister pack, such as razor-and-blade, toothpaste and tooth-brush, or a smaller size of the same product may be attached to the regular size. A firm can also use data revealing how its product compares with the other products. For this he has to send the proof of purchase (e.g., cash memo and wrapper) to the manufacturer to claim the gift which might be a diary or book or any other item. Too much dependence on sales promotion techniques gives the impression in the mind of customers that perhaps the product falls short of quality and is not saleable. These tools increase sales, introduce a new product to the market or meet competition challenges. These samples may be distributed door-to-door (through personal selling) or retail stores. Retailers may announces price discounts for a variety of reasons. Such premiums are attached either to the product, enclosed with the product, or otherwise available with the product when the consumer buys the product. For conducting the research, data was collected through simple random sampling of 100 respondents through descriptive research design technique. BUY ONE GET ONE, BUY TWO GET ONE FREE are the usual offers made to the customers to appeal them. How to choose your sales tools. Retailer-originated coupons are redeemable only at a particular store or a group of stores (for example, a chain store having many outlets). Travel Agents and Sellers . Various tools of sales promotion, also known as methods of sales promotion may be divided into two parts – (i) Consumers Pro­motion Methods (ii) Dealer Promotion Methods. ‘Readers Digest’ regularly makes this offer. Sales promotion letters and catalogues. LIST OF TOOLS• Free samples: These are distributed to attract consumers to try out a new product and thereby create new customers. Retailer takes many marketing decisions, tries to find new marketing strategies to attract and hold customers. Tools and Programmes 9. Main Menu. This will help to figure out whether they warrant additional investment of time and money to make them permanent products or services; (viii) Grows revenue – Sales promotions are a great way to build year-over-year and month-over-month revenue growth. For the purpose of sales promotion the company offers a special pack containing 150 gms, and the price is Rs. BDM's embody the old school face-to-face methods of sales promotion in contrast to Internet marketing and other less personal modern techniques. These are temporary price reductions, which appeal to bargain instinct. 7 After sales services. The consumers are expected to be convinced to use the product. Such displays act as last minute inducement to buy. 300,000 or more, or jewellery of the same value, then a number of prizes in the immediate value range, a large number of prizes of small value, and a larger number of consolation prizes. These … In this method of sales promotion, customers take part in small competitions on the basis of their creative and analytical skills. 4. a. Welcome to EconomicsDiscussion.net! 1,30,000 as a loyalty reward on purchase of a Maruti Esteem car, if the family already owned any other Maruti car. To attract new customers distribute free sachets to households. They are designed to create a good image of the firm in the society. This is where the different types of marketing analysis methods, techniques, and tools come to help.. When retailers offer coupons of their own, they have to bear all the above mentioned costs themselves. An advertising medium reaches the prospects at their homes, offices, etc. Computer magazines often include a compact disc with each issue. These include greetings or thanks in newspapers, donating space for noble causes, offer of Privileged Citizen Card, etc. A very tempting promotion, and simple too. But it does not include advertisement, publicity and personal selling. Sales contests are held for salesmen. Refund offers can be used to achieve a variety of promotion objectives, such as to guarantee trial, to reward loyal consumers, to load consumers, to increase purchase frequency, to introduce new products, to enter new markets, to encourage the purchase of related products, etc. 6. In certain case all those who furnish the proof-of-purchase are given some specified premium. 29. Marketers use this technique when they use new distributors or they want to push products to retailers. They are also known as Trade Promotion. If there are three different models of a product and because of the discount offer the price of the higher end model appears not too high to the consumer, compared to the lesser- priced model, then consumer may buy the higher end model. It includes every relationship which established among the people. Trade Sales Promotion Techniques Push Policy emphasizes promotions focused on the next intermediary. Various tools of sales promotion, also known as methods of sales promotion may be divided into two parts – (i) Consumers Pro­motion Methods (ii) Dealer Promotion Methods. Consumer-oriented Promotion Tools B. Trade-oriented Sales Promotion. Important techniques of sales promotion are as follows: (1) Rebate: Under it in order to clear the excess stock, products are offered at some reduced price. Frequent use of sales promotion activities may lead consumers to think that the product is of inferior quality. Business firms use promotional tools to achieve the following benefits: The first aim of sales promotion is to attract the attention of the prospective buyers and inform them about the availability, characteristics and uses of a particular product. This is a powerful method of ensure trial. Free Gifts 6. Marketers use this technique to increase their sales volume in the early stages of the product life cycle. Rebate is a partial refund to someone who has paid more or extra on purchase of a specified quantity or value of goods within a specified period. Promotional offers should not violate the land of law. This develops faith and confidence in consumers about the product. A coupon is a certificate that offers a price reduction for some specified items to the holder. When all similar products in a certain price range are perceived as basically alike, a premium offer with the purchase of the product is quite an effective method to gain shelf space or even display. The winners are decided in two stages. Its main focus is on conventions, trade shows and sales contests. This method may be used in products like washing machine. Such an offer acts as an incentive to stimulate short-term profit of the retailer and promote new products for the company. In such a case the objective would be to encourage shopping at a particular store and buy a certain manufacturer’s brand. The technique indicates refund of full purchase price if the buyer so wants. ii. 7. It includes tools for consumer promotion, trade promotion & business & sales force promotion. For example, companies distribute free samples of their new product. Such a deal is designed to stimulate customers to try a new product, to encourage new users to try an existing product, or to encourage customers to continue product patronage, increase purchase quantity, purchase multiple units, and accelerate usage rate, etc., such deals are suitable when the brand loyalty is low, product category is considered a commodity, and price is the primary consideration by the customers. iii. The pack contained four cakes of soap at the price of three). Offering free gifts or samples is the most expensive form of sales promotion. For example, exchange of old Black & White Television for Colour Television by paying rupees 8000 only (original price is rupees 10000) was offered by a particular producer of colour TV sets. It also tells them how the concerned products will be helpful in satisfying their specific demands. This is due to managers need to increase sales (inte… The following steps are suggested for effective planning and management of the sales promotion function: Step one is to assess and analysis of the present situation of the brand in terms of market share, major competitors and brand performance. Unlike, price cut off or discounts, rebates are provided after the full payment of full invoice amount. It is a kind of offer of a refund of money to customer for mailing in a proof of purchase of a particular product, it induce trial from primary users and motivate several product purchase. Sales promotional activities may broadly be classified into the following: Sales promotion directed towards the consumers may be conducted either to increase the consumer’s knowledge of the product regarding its use or it may be conducted to attract new customers. Tools and Programmes for Consumer Sales Promotion: Also known as consumer sample or free samples and given to consumers to introduce a new product or to expand the market. These are also offered to retailers to popularise the product and brand name of the manufacturer. The objectives of both sales promotion and advertising are similar and they complement each other. Coupons are the most widely used customer sales promotion technique. Effective sales promotion tools are tailored to presentations at events or trade shows, door-to-door sales, retail sales, direct mail advertising, telemarketing or Internet-based marketing. It is also possible that the retailer bought excessive stocks when the manufacturer offered trade deal and to clear this excess inventory the retailer offers a price discount to consumers. These promotions can be developed for durable as well as non-durable goods. The retailers serve as the agents of manufacturer in accepting and redeeming the coupons and send the collected to the concerned manufacturer along with their claims of reimbursement. Price-packs are also called value-packs. The offer was valid for a month only. Discount induces the customers … Sales Promotion is one such strategy which is used by marketers to attract new & prospective customers towards their products and retain the existing ones. To add an element of extreme urgency and speed up the response, early bird prizes are announced for the first 25 to 50 or 100 entries. As a matter of fact, sales promotion activities aim at supplementing and co-ordinating personal selling and advertising. (iii) Stimulation of Demand of New Product: Promotional activities are used to create interest in the new product and to persuade people to buy the same. It means offering a small quantity of a product free in order to persuade customer to try the product. Example—”Exchange your black and white television with a colour television.”. Sales promotions are those activities, other than advertising and personal selling that stimulate market demand for products. Generally, the free gift is related to the product but it is not necessary. Buying allowance is a temporary price reduction offered to the retailer for purchasing specific quantity/units of the product. Fifth step is concerned with primary decision relating to timing and duration of the schemes to be offered locating, selection of dealers and convictions of the trade and sales force about the suitability of the scheme. It is termed as banded pack offer when two or more units of a product are sold at a reduced price compared to the regular price (couple of months ago, Lux International offered a similar deal. Displays, Trade Fairs, Melas and Exhibitions in different parts of country. In this type of sales promotion, prizes are offered in kinds (especially the products of the company) and sometimes a payment is given to the participants. are made available in special containers which could be reused in kitchens after the product has been consumed. Although a few of the elements are used in common by each, for the most part the needs of the retailer differ from those of the manufacturer. Account Disable 12. POP material is often tied in with television or print messages to increase effectiveness. Consumer Promo­tion Methods are those which directly encourage consumers to buy product in more and more quantity. This dampens the competition for a while. Depending on the objectives, refund offers are used to encourage trial of a new product, purchase of increased quantity, or increasing the frequency of purchase, or to encourage the customers to purchase those products whose purchases can be postponed, such as refrigerators, microwave ovens, air-conditioners, and other consumer durable products. Sales promotion tools used for consumer-oriented promotion are – Free Samples: Distributing free samples increases brand awareness and triggers the psychology of ownership where the person … viii. xvi. People who see these devices are in a buying mood and thus they can be easily persuaded to buy those products. After sale service free of cost during certain period. Sales promotion efforts attempt to attract the attention of customers at the point of sale and enhance sales volume. There is no precise answer, however, experts generally agree that discount should be at least 5% to 20% of the normal price. It means exchange of an old product with the new one after payment of the exchange price fixed by the manufacturer. Some of the commonly used tools and techniques of sales promotion are:-, 1. For example, if a customer buys toothpaste, he gets a toothbrush free. Limitations. In this method, intermediaries are offered a monetary incentive for each additional unit purchased after the initial deal. In diverse product categories, such as exercise equipment, mixers and juicers, hair dryers, ceiling fans, inkjet printers, and magazines, etc., refund offers are fairly common. Advertising Novelties, that is, small, interesting or personally useful items, low cost, and eye catching can be used for sales promotion. The reason is mainly that of the specificity of marketing information and area. Effective sales promotion tools are tailored to presentations at events or trade shows, door-to-door sales, retail sales, direct mail advertising, telemarketing or Internet-based marketing. Trade promotion can persuade the wholesaler, retailers or distributor to carry a brand, advertise or give a shelf space to the products of a particular company. This type of sales promotion is targeted at the end consumers. Except for advertising through direct mail, advertising deals with media owned and controlled by the firm itself. x. For example, the regular price of a standard pack of a product is Rs. Their interest is not tied up with any brand or manufacturer, unless there has been an agreement with the marketer of some co-operative venture. It will now pave the way for determining the roles of sales promotion in desired change in the market share of the brand. 5 Free training. In case of Colgate toothbrush, it offered 1 free with the purchase of every two brushes. Sales promotion activities are often criticised on the following grounds: The incentives offered through sales promotion schemes are fictional, and not real. Advertising, on the other hand, is any paid form of non- personal presentation and promotion of ideas, goods and services. 5 on returning the empty packages to the dealer. Coupons bear a date of expiry and cannot be redeemed after the cutoff date. A great sales technique – pick one from the list below. This technique is often used to introduce a new large size of the product, or to encourage continued usage, and also to increase consumption. Such offers are very common these days in case of electric irons, TVs, refrigerators, scooters, gas stoves, washing machines, etc. Business and Sales force promotion tools– These are directed towards the company’s sales force so that they put in extra effort in making sales. For example, if the price of a more expensive wristwatch is Rs. The gift is sent by the manufacturer by mail or through courier. Repeat purchases may be stimulated by frequent user incentives. This method aims at stimulating the channel members to purchase additional quantities of stock that is over and above the normal stock, as the monetary incentive they receive is proportional to the amount of additional stock they purchase. Point Of Purchase Displays – This includes providing free point of purchase (POP) display units to the retailers to increase their sales. Companies can offer a car or consumer durables for generating a certain percentage sales in a particular month or quarter. These coupons are either advertised by producers/retailers in newspapers or distributed in weekly flyers via mail across households. x. Gillette announced a refund offer. For examples, Sensodyne Toothpaste meant for relieving tooth sensitivity is unique product introduced in India. Sales promotion tools vary in their specific objectives. So, the methods of sales promotion can be divided in three groups as consumer, promotion, middlemen/trade promotion and sales-force promotion. It attracts non users and act as an effective tool to counter competition. Consumers have to take some action to claim the premium, such as sending the proof of a single or multiple purchases and wait for some period of time for the delivery of the premium through mail or courier. Consumer sends proof of purchase and manufacturer sends the refund part of the purchase price to the consumer. The range covers low as well as high-involvement products. Sales promotion is generally defined as those marketing activities that provide extra values or incentives to the sales force, the distributors, or the ultimate consumer and can stimulate immediate sales. Customer will buy those products or services that are highly advertised, mostly seen etc. Are costlier than the product but it is an incentive tool used solve. Incentives are essentially temporary and non-recurring in nature promotions appear in audio-visual or media! 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