1

PROMOTION AND ITS CONCEPT

SALES
LearningOutcomes
this chapter, you should be able to:
Afierstudying
> Understand theconcept of Sales Promotion.
Promotion
Science behind Sales
of Sales Promotion
> Benefits and limitations

1,1 SALES PROMOTION

Dcinesses are meant to make proits and 'sales' is one of the important function which
generate revenues and leads the business towards producing income. The businesses
Sha want to survive and have growth they constantly concentrate on 'sales. Though
mlimate aim of production is sales, but it 1S not a activity of self generation and required
efforts. Promotion' is one of such effort and plays vital role in effectively and efficiently
communicating the organization's marketing strategy decisions to the targeted audience
ond facilitate them to have an exchange with the marketer. Sales Promotion' is the very
important element of promotional mix.
 PROMOTION
Marketing
SALES
4 I|

MarketingMix

Price
Place
Promotion
Product

PromotionMix

Sales Publicity Direct

Advertising
Personal
Selling
Promotion
Marketing
Promotionin Overall Marketing
Placement of Sales.
Fig, 1:
strategic role in
promotion has the tactical
role rather than
organizations in the form of temporary
marketing.
Sales
Sales
is used by the business products or services which
campaigns
ultimatal-8sto
promotion their
the consumerS in
create interest of
stimulate the demand.
DEFINITIONS
1.2 SALES PROMOTION:
authors and thinkers defined 'sales promotion' intheir own words,
Manyrenowned "Sales
eminent author of marketing defines sales promotion asdesvionnd
Philip Kotler, an incentive tools, mostly short term.
promotion consists ofa diverse collection of products or services by consumere
or greater purchase of particular
to stimulate quicker
or the trade"
of those cultivates that are
Massott & Ruth, defines as "Sales promotion consist
attention of customers "
designed to bring a company s goals or services to the favorable
Wiliam. J. Stanton states, "Sales promotion is an exercise in information persuasion
and infuence".
 SALES PROMOTION AND ITS CONCEPT |l 5
Haugh defined sales promotion as "a direct inducement that offers an extra
Louis
J.
incentivefor thee product to the sales force, distributors, or the ultimate consumer
r
theprimaryobjective ofcreating an immediate sale."
valueor

with expressed sales promotion as a traditional promotion and states "sales

L.
Percy
promotton,or;what we call traditionalpromotion, is usually defined as any direct purchasing
rewara, or promise that is ofered for making a specific purchase or taking a
incentive,
pecjtc,
prchase-related action.
Luickand Willim L. Zeigler, analyzed it as "sales promotion includes those
John F
whichenhance andIsupport mass selling and personal selling and which help to
activities,
andlor cooordinatethe entire promotional mix and make the marketing mix more
compete
efective.
promotions are temporary incentives targeted at the trade (called trade
"Sales
promotions), or at end consumers (consumer promotions). While sales promotions
purchase behaviou, they vary, whether they attempt to persuade
generallyain to change
customers or end. Consunmers to buy a product the first time, to
for buy more, to by
trade often, " A.
As stated by John Quelch
buy more
earlier; orto
words of Don E. Schulta and W. A. Robinson, "Sales promotion is the direct
Inthe
inducement or incentive to the salesforce, the distributor;, orthe consumer, with the primary
creating an immediate sale "
objective of
ording toGeorge W. Hopkins, "Sales promotion is an organized effort applied to
the sellingjob to secure the greatest effectiveness )for advertising and for dealers ' help.
NATURE
3SALES PROM0TION:
DEAR CUSTOMER,
LAST DAY TODAY
Tactical: OF CANTABIL
and Non SPECIAL PREVIEW
Sales Promotion is tactical in nature as it is an Iregular SALE.HURRY GET
incentives given
Recurring Activity to increase sales. For example, FLAT 50% OFF
period, Cantabil
tothe customers for a day or two, that is for short
WITH ECOUPON
C7$50298E03
offering sales discount for a day as last day of special offer EXCLUSIVELY FOR
YOU.T&CAPPLY
Targeted:
Sales promotion is always targeted. It can be directed at one of three groups of people.
The first is for their own salesforce and is internal. Other staff, such as technical sales
support personnel or telemarketers, may be targeted. Consumers are the second group, and
6|| SALES PROMOTION

third. For example, manufacturer

members of their distribution route are the
promotion in which he offers extra credit for 15 days for buying in bulk.

|Dear retailers, we
doing sales
are providing an
opportunity toyou to
buy the garment stock
in bulk (worth one lakh
and above) and get
45 days credit instead
|of 30 days. Hurry up!
offer lasts tillthe stock
lasts. select products
|bit.ly/3NXegXi
T&C. 6:31 PMV

Motivation and Incentives:

Incentivesthat drive people to act are needed for sales promotion. This
the most essential part of apromotional campaign, and it aims to motivateincentive is usyually
traders, and salesforce to make the greatest sales possible.
customer to buy and get another one free of cost.
Subway is Cons umers
motivating ts
i
,
DOUBLE
THE FEELGOOD

BUY ONE, GET ONE FREE

RLDSANDWCHDAD

SUBWAY

Acceleration Tools:
It's made to expedite the selling process while also increasing sales volume. Sales promoton
is simple toexecute and produces faster effects than advertising. For example
percentay
 SALES PROMOTION AND ITS
CONCEPT | 7
increases the sales volume and have faster
discounts effects then other
strategies. promotional

SALE
50
Non-MediaActivity:
Because sales
promotion difers from advertising and publicity while
includingthemin the entire promotion mix, it is referredito as a non-media simultaneously
activity. Mama
earth offeing 'cash back', is an example where they are promoting their products and also
including other tools of promotional mix.

LAST 4 HOURS LEFT

500
CASHBACK

Organized Activity:
It is usually organized as a distinct marketing event. In other words, it is a 'stand-alone
action that is scheduled as a separate event from the marketer's overall marketing
communication strategy. For example, free trails are part of promotion tactics but separate
from overall marketing communication strategy.
8||SALES PROMOTION

31-DAY
freu
Trial
NORISK!

Adaptable:
of
It's incredibly adaptable. The numerous types sales promotion can be
diverse groups and are meant to accomplish varying impacts. It can be
life cycle. Coco cola doing sales promotion by
empl
utilizo yed
ed at
with
time during the product's any
one to consumers and also offering beautiful
off
display units to retailers andering one plus
simultaneously. wholesalers

Diyers
drink free
Buyl
Get1
Free

1.4 SALES PROMOTION: OBJECTIVES

Sales promotion typically addresses the following objectives:
Creating Awareness: Several sales promotional method are highly effective in
bringing new products tocustomers for the first time. These methods can serve as major
promotional components in the early stages of new product launch. Additionally, numerouS
 SALES PROMOTION AND ITS
CONCEPT | 9
promotion techniques have the added benefit of acquiring
sales
collectiontool (i.e., sales lead
the generation),to which may subsequentlyconsumer information
be used as follow-up
marketingefforts as part of endeavour build product awareness.
Generating Interest: Sales promotions are
inaproduct, according to marketers. In fact, generating particularly efficient
curiosity in generating
is frequently seeninterest
as the
Imostcrucial
aspect of sales promotion. An unexpected sales
canconsiderably increase customer traffic to stores. promotion in the retail business
marketers to increase the number of
Similar techniques can be used by
internet visitors to their websites. Moving
outa a; product is
another r effective technique to pique their curiosity. customers
to try
free or at aacheap
cheap cost using a variety of sales Customers car
things for promotion techniques.
Indulging Information: In general, sales promotion techniques are intended to
tential customers for taking Some action towards purchase. So, indulging the
information about the product in the promotional campaign in the correct
the potential customer towards action. For example, a campaign can provide quantity
usersleads
the

opportunity to try a fee-based internet service for free for a few days. Receiving product
informationthrough e-mail may be a part of this free access.
Chmulating Demand and Inereasing Sales: After creating product awareness, the
most important use of sales promotion is to stimulate demand. The volume of sales depends
upon the fundamental factors lke cost, quality, distribution and value. Sales promotion
cranked up to increase the sale but cannot overcome the deep rooted weakness. Companies
usethetoolI of sales promotion for increasing the volume in short term. The reasons could
t clearing, to reduce stock inventory, to increase stock holding at retailers level
fee competitors or adding new customer base. Any promotion that provides incentive to
11 increase the volume of sales. Price promotion found to be best for increasing the
sales volume.
ProndReinforcement: After a consumer has completeda purchase, a sales promotion
can be used to stimulate more purchases as well as reward loyalty. Many businesses.
including airlines and retail outlets, Teward loyal or "preferred" customers with unique
offers such as e-mail "special discounts" and cash register price reductions.
The series of actions intended to increase sales is known as sales promotion. The
corporation can compete with its rivals by investing time and money in promotion.
Promotion's objective is to raise client pleasure and loyalty, which acts as a safeguard
against cost-cutting strategies like price reductions.
 PROMOTION
10 || SALES

SALES PROMOTION
1,5 SCIENCE BEHIND
because it is data-driven and
Science is a crucialcomponent AAvariety of constantly tests and
working.
results to determine
aresupportedby study.
what is
These
and isn't
are1tried-and-true techniques
techniques
that draw on
used by
both asalesnpaelioypselse
advancements and human psychology.
customers is one ofthe most crucial
elements
Possessing the power to persuade
sales and promotions. It need
of; technological
potential
able to foresee how particular messages,
pictures, and platforms will
influencescience to be
psychologically.
Following are the examples or the
situations where psychological effect
CustomeIS
can be seen
during sales promotion.
Discounts perform better when the urgency principle is used and they are only
for alimited time. People lose out on the opportunity to save: money if they do not offered
the goods at the discounted price, which creates a senseof of urgency. The fear of pur chase
is the reason the discount is effective.
Also, Instead receiving a single 40% losing out
clients want to receivea 25% discount on top of another 20%
discount discount,
The initial digit of a number hangs the most when considering the side from which
begin reading. Customers, for instance, see 999 rupees as being afarl better value than 1000
upees, despite the fact that there is practically any difference.
Dan Ariely also demonstrated psychological pricing when he lookeddat The Economist
subscriptions and discovered something he called thedecoy effect" Three options were
presented to customers: Online subscriptions cost $59.00, print subscriptions cost S12s
and combo subscriptions cost $125. When allthree options were available, just 16%of
people would select option a, while 84% would select the pricier option c, which would
appear to be a promotion. Without the decoy and with only the firSt and third options
available, 689% of respondents would select option aand oly 32% would select option c.
1.6 ADVANTAGES OF SALES PROMOTION
"Creates differentiation: Differentiation is one of the most crucial components of a
sales promotion. It won't be noticed ifit isn't unique. Even ifyou could be marketing
to the same demographic, you can still make your campaign more interesting to
them by emphasising characteristics that aren't included in or not supplied with the
products they're already purchasing.
" Enables communication: Every business needs a strategy for sales promoto
You must give your customers options for communication, whether you seu
 SALES PROMOTION ANDITS CONCEPT || 1l
services. This
entails social media marketing, advertising,
goodsor promotions,
andsweepstakes, Additionally, it can raise customer happiness, engagement, and
retention rates, which can all boost a company's return on investment.
" Encourages word-of-mouth: Word-of-mouth is the key component of any
successful sales promotion. When it comes to something like a good or
most individuals tend to believe the claims and endorsements of people theyservice,
know.
Sales promotion has several advantages, like increasing sales volume and consumer
loyalty, but it may also be utilised by companies to create their brand identity.
Because ofthis. it is frequently more affordable than other types of marketing.
Perfect for up-selling and cross-selling: One of the most crucial tools that
erketers have is the capacity to generate possibilities for up-selling and cross
selling. They may maximise their sales by doing this without puting in a lot of extra
effort. Additionally, they can designate discounts and incentives for customers who
purchase things as well as promotions for those who already own certain goods.
Ceeates a reason to buy: Givngconsumers a reason to purchase is another benefit
of sales promotion. It piques the recipient's curiosity, making them feel as though
here is a valid justification for buying the product. AIDA (Attention, Interest,
Desire, and Action) or the PAS model are two techniques that can be used to do this
(pain-agitate-solution)
Encourages targeted marketing: Everyone is searching for the one marketing
solution that will work for them. The instrument that will enable them to increase
sales or achieve better outcomes with less work is the solution that the majority of
neople are looking for. Unfortunately, there isn't a "one size fits all" method, so
every business must develop its own special strategy that works best for its particular
market and product.
"Chance of higher revenue: The best strategy to boost your revenue is to organise
a sales campaign. Provide discounts, coupons, and other enticements to entice
customers to purchase more goods. In order to use this marketing tool to reach as
many people as possible, it is crucial that you develop a promotional strategy.
" Gives your customers information: The biggest benefit of using online sales
promotion is that you can give your customers a source of information. Posting
images, videos, and product descriptions on social media platforms like YouTube,
Instagram, Twitter, Facebook, and others is simple. By doing this, you'll be able to
attract more users to your website and improve its search engine visibility. These
features aid in both customer attraction and brand promotion for you.
 PROMOTION
SALES PROMOTION
12||
DISADVANTAGES OF SALES
" Increasedpricesensitivity: One commondrawback ofthis methodis that customers
1.7 becomenmore price sensitive and willhunt for ways to Cut COsts, even ifit doesn't

qualityoflife. For
of the brand image:
harm their
effect on the
calibre
coworkers about a bargain on an instance, people May
Negative
tofiends
" suchas potatochips
spread rumours
and
unhealthy fo d
orsoup. Customers can believe that the company is selling
discounted significantly.
low-quality goods if
the product is
calibre ofthebrand image of the
Sales promotions
may havea negative effect on
the
rumours to company.
friends and coworkers about a
an unhealthy food, such as potato chips or sOup. Customers can believebarthat
nstance, people may
spread
For
gain theon
low-quality goodsiftheproductis discounted significanty
Customeris selling
"company perception may not be altered by sales promotion: One of the biggest
deal can change a S3est
that oifering a
erors businesses commit is believing
perception of their goods. If consumers don't trust your product, your business
or even the product itself may fail. For instance, it was discovered that popular

mobile devices from the Note series posedla risk offire and explosion. For
Samsung reputation.
few years,
aSales this damaged the company's
promotion can't fix a bad goods: Sales promotioncan't fxxabad product. The
efficiencyof sales promotion will be impacted by factors like a|lack of distribution
channels or subpar product quality.
" Abadly trained sales team cannot be made up for by sales promotion: Thero
for al1 Grms .
are numerous reasons why sales promotion is not the best option
cannot, for example, make up for abadly trained sales crew. Selling with promotions
might really backfire if a company's salespeople aren't adequately trained for their
positions.
"Additional stock may accumulate: Sales promotions may have a negative impact
on your business since they may result in extra stock remaining on the market for an
excessive amount of time or in unauthorised sales of your goods by other businesses.
"Itis short-run device: Like aflash light, it flashes and disappears. It has the shortest
life impact as promotion tool unlike advertising. It can be used as a tool to achieve
short term marketing objectives by schematic means. It has the strongest ability o
Creating impulse buying but cannot work as a lasting dose. Sales promotion is noa
 SALES PROMOTION AND ITS
CONCEPT | 13
sustainable strategy. Although it ought to be utilised to
marketing approach shouldn't be solely guarantee fast achievement,
youy heavily on sales promoton are morecentred on it. In actuality, businesses
profits. The nature of sales promotion is too
likely to experience a decline in
company's.long-term problemsslikelike short-term, and it doesn't deal with the
customer relations, product pricing,
etc. innovation,
donendent technique: It is more of asupplementarydevice and has got to be
blended well in right proportion with other two
promotional ingredients namely,
advertising and personal selling. That is why; it has been rightly
bridge between personal and impersonal selling. It described as the
ingredient. makes up the gaps in the two
and, therefore, is a plus
" Under-valued by experts: Sales-promotion, as tool of promotion mix,
is
undervalued by the experts from advertising agencies. They are of
sales-promotion as mmix ingredient is not capable of fighting the the opinion that
intense competition.
These techniques of sales-promotion are so over that they are easily copied by the
competitors and the original gap between the competitors is again maintained. It is
1eo increasing the dearness allowance to match the rising cost of living, so much so
bot hy thetime authorities declare the dearnesS allowance, the prices have gone up
again.
REVIEW QUESTIONS
1 What do you understand by sales promotion? Give illustration.
Defne «Sales Promotion".Discuss its role in marketing.
3. What is sales promotion? What are its characteristics?
4 How is sales promotion defined? Discuss the objectives of sales promotion.
5. "Sales Promotion is an efficient way of communicating with the customers". Justify
the statement.
6."Though Sales Promotion is tactical in nature but even then, proved to be a great sales
booster". Do you agree? Give reasons.
7. Why businesses use sales promotion" as one of the activity for their marketing plan?
8. Sales Promotion" is intended to convince the customer to buy the product. Do you
think indulging knowledge has a role in it? Elaborate.