Types of Sales Promotion
Types of Sales promotion
Sales promotion is of two kinds—consumer sales promotion and dealer sales promotion. Consumer sales promotion includes activities designed to inform and educate the consumer and to stimulate demand. Examples of consumer sales promotion are samples, demonstrations, gift coupons, premium and price offers, fashion shows or parades, bonus stamps, contests, exhibition-cum-sale, etc. Dealer sales promotion is used to help dealers and to improve dealer effectiveness. It includes free display material, free window display services, free demonstrations and trials, trade deals offering discounts and gifts, sales contests for dealers or salesmen, trade show, dealers' conference, house organs, training of dealers' sales force, advertising display allowance, etc.
1. Consumer Sales Promotion Programs : In sales promotion programs directed towards the consumers, an attempt is made to reach the home or office of the consumer. The aim is to attract new customers, to counter a competitor's activities, to reassure customers and to arrest any seasonal in sales. For example, a discount is offered on refrigerators during winter.
Free samples, contests, price reductions, demonstrations, coupons, and other techniques of sales promotion are used. Free samples are distributed among the prospective buyers to arouse interest in the product. Sales contests are arranged to attract new customers, or to introduce new products. In a contest, an entry form is designed and customers are asked to fill in and forward the form along with cash memo or wrapper of the product. Sales demonstrations of consumer durables like mixer grinders, micro oven, etc., are conducted to induce customers to buy them. Coupons are introduced in packages or through press advertisements to induce customers to buy the product at a concessional rate. Discount sale is a very popular method adopted by firms dealing in readymade garments, shoes, etc particularly at the end of season.
2. Dealer Sales Promotion Programs : In these programs, sales promotional activities are conducted to induce dealers to keep a large stock with them. Extra cash or trade discount is offered to dealers on the basis of orders placed. Premiums, contests, advertising material, store demonstration and special displays, are the main techniques used for dealers.
(a) Dealer premiums : Certain premiums are offered to the retailers for stocking and selling the product;
(b) Dealer contests : In these contests, additional incentives are offered for attaining predetermined sales targets and for arranging attractive demonstration or display of the products. Prizes offered include car, foreign travel and expensive gifts.
(c) Advertising material: The producer provides signboards, banners, cutouts, shelf signs and other material for point of purchase (PoP) display. Such point of sale material acts as the silent salesman. It attracts customer’s attention and initiates buying action. Such material induces dealers to stock new products, to introduce special offers, and to increase the size of retail orders.