SALES PROMOTION OF

DURABLE GOODS

MARKETING MANAGEME

NT

2011-2012SEMESTER-II

PRESENTED TO MRS.ARCHANA KADAM MA’AM

GROUP MEMBERS NAME ARWIND PATEL MEGHA PARIKSHIT PRABUDESI TASNEEM JUZAR SHEWTA YELLE RAJNI SHZWHEL

CONTENT

OBJECTIVES To study about the sales promotion

techniqes used by companies To have knowledge about To learn To compare

INTRODUCTION

Sales promotion - Sales promotions are short-term incentives to encourage the purchase or sale of a product or service.

Sales promotion includes several communications activities that attempt to provide added value or incentives to consumers, wholesalers, retailers, or other organizational customers to stimulate immediate sales. These efforts can attempt to stimulate product interest, trial, or purchase.

SALES PROMOTION STRATEGIES

THERE ARE 2 TYPES OF STRATEGIES A push strategy involves convincing trade

intermediary channel members to "push" the product through the distribution channels to the ultimate

consumer via promotions and personal selling efforts. The company promotes the product through

a reseller who in turn promotes it to yet another reseller or the final consumer. Trade-promotion

objectives are to persuade retailers or wholesalers to carry a brand, give a brand shelf space, promote a brand in advertising, and/or push a brand to final

consumers. Typical tactics employed in push strategy are: allowances, buy-back guarantees, free trials, contests, specialty advertising items, discounts,

displays, and premiums.

PULL STRATEGY

A pull strategy attempts to get consumers to "pull" the product from the manufacturer through the marketing channel. The company focuses its marketing communications efforts on consumers in the hope that it stimulates interest and demand for the product at the end-user level. This strategy is often employed if distributors are reluctant to carry a product because it gets as many consumers as possible to go to retail outlets and request the product, thus pulling it through the channel. Consumer-promotion objectives are to entice consumers to try a new product, lure customers away from competitors’ products, get consumers to "load up" on a mature product, hold & reward loyal customers, and build consumer relationships. Typical tactics employed in pull strategy are: samples, coupons, cash refunds and rebates, premiums, advertising specialties, loyalty programs/patronage rewards, contests, sweepstakes, games, and point-of-purchase (POP) displays.

HOW TO DESIGN SALES PROMOTION STRATEGY ?

For a sales promotion strategy to be successful there needs to be a plan in place. When you design a sales promotion strategy, you need to make sure that the company is getting the best return on investment and good marketing exposure in exchange for the promotional part of the strategy. If a company is using a buy one, get one free promotional strategy, then there needs to be sufficient return for the item that will be given for free to make sales promotion a success.

ADVANTAGES AND DISADVANTAGES Create Urgency Sales promotions draw attention to a particular

product or service being offered. They distinguish a business from competitors through pricing. Dryden Sales, explains that when sales promotions are offered for a limited time, it creates urgency among the customers because they have to act before the promotion expires. As a result, the limited offer reduces the time customers have to think about the product. In most cases, they will stop comparing the alternatives and buy the featured item or service.

Price discrimination: Producers can introduce price discrimination

through the use of sales promotions.  They can charge different prices to different consumers and trade segments depending on how sensitive each segment is to particular prices.Coupons, special sales events, clearance sales and discounts are examples to explain the phenomenon.

Often such price discrimination are offered in specific cities in the country,Bajaj Auto Ltd. started the scheme on 20th august 2001, where by if you buy a Bajaj Spirit two-wheeler you get Rs.3000/- off, valid only in Ahmedabad.

Disadvantages   1. Increased price sensitivity Consumers wait for the promotion deals to be

announced and then purchase the product.  This is true even for brands where brand loyalty exists.  Customers wait and time their purchases to coincide with promotional offers on their preferred brands. Thus, the routine sales at the market price are lost and the profit margin is reduced because of the discounts to be offered during sale-season.

‘The Diwali Bonanza Offers’ on electronic goods. 2. Quality image may become tarnished: If the promotions in a product category have

been rare, the promotions could have a negative effect about its quality image. Consumers may start suspecting that perhaps the product has not been selling well, the quality of the product is true compared to the price or the product is likely to be discontinued because it has become outdated.

The Smyle Powder offer of “Buy 1 and get 2 free” went on and on. Ultimately people stopped asking for the product as the on-going sales promotion strategy made the customers perceive it to be a cheap and an inferior product.

ADVANTAGES AND DISADVANTAGES Advantages 3. Effect on trade

behaviour: Short-term promotions

present an opportunity and encourage dealers to forward buy. This forward buying ensures that retailers won’t to go out of stocks.  As dealers have more than the normal stocks, they think it advisable to advertise in local media, arranged displays and offer attractive promotion deals to consumers.  These actions help in increasing the store traffic. Buy 2 dozen shampoo sachets & get 2 sachets free.

Disadvantages

3. Short-term orientation: Sales promotions are generally

for a short duration.  This gives a boost to sales for a short period.  This short-term orientation may sometimes have negative effects on long-term future of the organization.  Promotions mostly build short-term sales volume, which is difficult to maintain.  Heavy use of sales promotion, in certain product categories, may be responsible for causing brand quality image dilution.

ADVANTAGES AND DISADVANTAGES Advantages disadvantages

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RECOMMENDATIONS Don’t promote if the product is not good Promotions rarely stop a declining sales

curve It is very easy to lose the promotional

gains made if your promotion has not been effective in retaining new customers. So the product has to speak for itself.

The objective of the promotion is to wean away users from competition and create new users.

Excessive promotions lead to diminishing returns and may devalue the brand

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