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Banking Marketing Aptitude Sales Promotion Marketing Aptitude - Sales Promotion

Marketing Aptitude - Sales Promotion

Category : Banking

 

Promotion

 

Promotion is one of the primary elements used in the marketing mix. As a key marketing element, promotion comprises communication tactics used to educate consumers, increase demand and differentiate brands.

"Promotion is the means by which firms attempt to inform, persuade and remind consumers-directly or indirectly about the products and brands they sell."                      

- Kotler and Keller

  • Objectives of Promotion
  • To inform people about particular issues.
  • To introduce new products to the market.
  • To compete with competitors products.
  • To improve the company/brand image.
  • To increase sales.
  • Importance of Promotion
  • It can boost sales during the year when sales are traditionally low (encourage off season purchases).
  • It encourages people to try a product.
  • It encourages people to buy a product or the product in greater quantities.
  • It encourages people to buy a product instead of competitor s products.

 

Promotion Mix

 

Promotion mix is a specific combination of promotional methods used for one product or a family of products. In other words, promotion mix refers to combination of promotional tools used by an organization to achieve its communication objectives

  • Elements of Promotion Mix

The main elements of promotion mix are

  • Advertising

Advertising communicates a message to a targeted a audience and generates feedback in the form of a sale.

  • Personal Selling

Marketing impacts personal selling and improves the selling environment by increasing exposure   to potential customers.

  • Sales Promotion

It stimulates market demand, product availability and coordinates public selling, advertising and public relations.

  • Public Relations

It is the management of a message between an individual or organization and the public.

  • Social Media

It is versatile, far-reaching, fast, inexpensive, fosters brand awareness and can improve customer service.

  • Direct Marketing

It goes direct to customer via telephone, mail, fax, etc.

 

  • Factors Affecting Promotion Mix
  • Budget available
  • Stages in product life cycle
  • Type of product
  • Type of purchase decision
  • Target market characteristics
  • Consumer's readiness to purchase
  • Consumer's preferences for media
  • Regulations
  • Competitors
  • Availability of media
  • Push vs Pull strategy

 

Sales Promotion

 

Sales promotion is one level or type of marketing, aimed either at the consumer or at the distribution channel (in the form to sales-incentives). It is used to introduce new product, clear out inventories, and attract traffic and to increase sales temporarily.

The sales promotion targeted at the consumer is called consumer sales promotion, the sales promotion targeted at the retailers and wholesalers is called trade sales promotion.

 

  • Objective of sales Promotion

Some of the objectives of sales promotion are listed below

  • Information to Customers

Sales promotion activities inform the potential buyers about the availability, features, use, etc. of the product. Thus, it offers additional support to promotional activities like advertising, publicity and personal selling.

  • Persuades Customers

Sales promotion activities aim at arousing customer's interest in the products and persuading them to buy them.

  • Increase in Sales Volume

The sales promotion schemes are a big help in boosting off-season sales and also in tempting the buyers to make quick decisions to purchase.

  • Incentive to Retailers

The main objective of sales promotional activities is to offer promotional support to retailers. Incentive schemes help product in getting shelf-space for them in new retail outlets.

  • Create Product Identity

Under Sales Promotion Programme, product identity is established by offering additional features and incentives for that particular product. This helps in building consumer's preference for the specific products and brands.

 

  • Characteristics of Sales Promotion

Characteristics of sales promotion are as follows

  1. Attractiveness

This is the degree to which the consumer perceives the promotion as being desirable.

  1. Fit to Product Category

A promotion which has no relationship with the product is less likely to appeal to customers.

  1. Reception delay

If the promotional gift or discount will not arrive for some time, it is less attractive.

  1. Value

High-value promotions work better than low-value ones, but it is the value as perceived by the customer which is important.

 

  • Importance of Sales Promotion
  • It helps to increase sales in a competitive market and thus, increases profits.
  • It helps to introduce new products in the market by drawing the attention of potential customers.
  • When a new product is introduced or there is a change of fashion or taste of consumers, existing stocks can be quickly disposed of.
  • It stabilizes sales volume by keeping its customers with them.
  • The consumer gets the product at a cheaper rate.
  • It gives financial benefit to the customers by way of providing prizes and sending them to visit different places.
  • The consumer gets all information about the quality, features and uses of different.

 

Difference between Advertising and Sales Promotion

Basis

Advertising         

Sales Promotion

Objectives

Objective of advertising is to create a favourable consideration for the product 

Objective of the sales promotion is to stimulate the consumers to buy the product.

Effect

It has a long-term effect.

It has a short-term effect and useful for increasing immediate sales.

Nature

Advertising is recurring is nature.

It is non-recurring and one time communication process.

Price

Expensive in most cases.

Not very expensive ion most cases.

Suitable for

Medium to large companies.

Small to large companies.

Sales

Assumption that it will lead to sales.

Directly related to sales.

Purpose

Increase sales, brand building.

Increase sales.

Example

Giving an advertisement in the newspaper about the major products of a company.

Giving free products, coupons, etc.

 

  • Elements of Sales Promotion
  • It is a part of promotional mix.
  • It is an art and science both.
  • It is a different form of advertising.
  • It is a different form of personal selling.
  • It contributes to selling.

 

  • Merits of Sales Promotion
  • Sales promotion is always very useful in new product launch.
  • Sales promotion activities are designed to supplement the personal selling and advertising efforts used by a firm.
  • Sales promotion activities attract attention of the people because of the use of incentives.
  • Sales promotion activities induce people to break away from their regular buying behaviour and try the new product.

 

  • Demerits of Sales Promotion
    • Frequently promoted brands in the product category, especially on the basis of price, make consumers and traders more price sensitive, not only for the promoted brand, but for other brands as well in the same product category.
    • Sometimes, use of sales promotion tools may affect image of a product. Consumer may start suspecting that perhaps the product has not been selling well or think that the product has become outdated.
  • Sales promotions are generally for a short duration. Sometimes, it has negative effects on long-term future of the organization. Promotions generally build short-term sales volume which is not maintained.

 

Tit-Bits

 

  • Marketing communication mix involves personal selling and advertising, sales promotion, public relation, publicity,
  • DSA stands for Direct Selling Agent, A DSA is required to be adopt in communication skills.
  • Telemarketing campaigns are resorted to avoid face-to-face interactions.
  • A 'lead' means an interested buyer.
  • A cold call means calls made without prior appointment
  • Sales process begins with lead generation,
  • The meaning of 'conversion' in terms of sales is converting perspective customers into purchasers.



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