The term ‘Promotion’ originates from Latin term, promovere meaning to move forward. In this sense, promotion is used to move forward a product in a channel of distribution.
In earlier days, sales promotion meant clearing out some old stocks or to put some extra pressure behind slow moving products. It was totally sporadic and unplanned. It was then, only a minor activity related either to advertising or to personal selling.
The importance of sales promotion in modern marketing has increased mainly on account of its ability in promoting sales, preparing the ground for future expansion. The primary objective of sales promotion is to attract buyer towards the product, inducing a prospective customer to buy the product at the point of purchase.
At the salesman’s level, the objective of sales promotion is to achieve more sales. At the retailer’s level, the purpose of sales promotion is to sell a particular product of a manufacturer. At the consumer’s level, the main idea of a sales promotion is to enable the consumer to buy more of a product more frequently and also to introduce new uses for the product.
Objectives of Sales Promotion
The basic and broad objectives of sales promotion are either identical or very similar to the objectives of advertising or salesmanship. Seven specific objectives (both initial and ultimate objectives) of sales promotion are noted below:
1. To Introduce New Products
Sales promotion is often used to motivate consumers to try a new product. Dealers are also induced to buy new products for resale. Usually, free samples are given to introduce new products to customers. Discounts in cash or goods may also be offered to dealers to stock a new product.
2. To attract New Customers
Sales promotion measures aim at attracting new customers. Usually, additional customers are won away from other firms. Samples, gifts, prizes, etc., are used to encourage consumers to try a new brand or shift their patronage to a new dealer.
3. To Induce Present Customers to Repeat Purchase More
Sales promotion devices are also used to induce present customers to buy more. Product development, offering three products at the cost of two are some of the devices used to encourage customers to buy more.
4. To Help the Firm Remain Competitive
All the companies conduct sales promotion activities. They do so to remain competitive. Therefore, no company can afford to ignore promotion activities.
5. To Increase Sales during Off Seasons
Since many products have seasonal demand like fans, refrigerators, an important aim of sales promotion of such goods is to encourage purchase during off seasons. That is why we find discount, off season price reduction of such items in the market.
6. To Add to the Stock of the Dealers
The wholesalers and retailers who have a variety of goods in their shops can sell more easily to customers. Therefore, sales promotion activities are undertaken by the manufacturers to encourage dealers to have more stocks of their goods.
7. To increase Loyalty
Loyalty to a product or service is much more subjective and personal in nature than repeat purchase. Loyalty keeps the product moving even when the company is facing problems in terms of price, distribution etc.
Sales Promotion Exercises
There are number of sales promotion exercises which can be offered for retaining loyalty:
1. Long term collectors’ promotion where a wide range of merchandise branded with product or service can be collected.
2. Factory visits or exhibition stall visits which bring old and regular customers into direct contact with the company’s product or services as well as company’s officials.
3. Mailing letters to few regular customers inviting them for product show.
Cash discounts are rarely used in loyalty promotions. Cash is fundamentally impersonal and the objectives of loyalty promotion is to supersede short-term cash considerations by appealing to deeper human values.
8. To Widen Usage
Very often it would be seen that one product is widely used in one sector and not so in other sectors. The trend could be changed by educating consumers about the other uses of products. A detailed list of objectives is given for the benefit of the students.
In spite of the several objectives of sales promotion, there are three objectives which are fundamental, viz., informing, persuading and reminding. These objectives are attained through effective communication.
Informing refers to educating the consumers about the product, its features and uses. Free samples may be distributed to leading consumers who may be a source of advertisement for other prospective consumers.
Salesmen persuade consumers to buy their products. They develop or reinforce a favorable set of attitudes and influence their buying behavior. They supply comparative information on various products so that consumers may be willing to purchase the products promoted by them.
Reminding leads the firms to reinforce the previously satisfactory behavior of the customer. It provides suitable knowledge for recollection. Reminding the consumers of their past satisfaction will persuade them to stay with the product and prevent them from shifting to competitors.
- Objectives of Sales Promotion
- 1. To Introduce New Products
- 2. To attract New Customers
- 3. To Induce Present Customers to Repeat Purchase More
- 4. To Help the Firm Remain Competitive
- 5. To Increase Sales during Off Seasons
- 6. To Add to the Stock of the Dealers
- 7. To increase Loyalty
- 8. To Widen Usage
- 9. Informing
- 10. Persuading
- 11. Reminding