SALES
PROMOTION
This section gives an
insight on the view of several authors in marketing expatriates who sees
promotion in their own perspectives. Among them is Kotler (2012) in his book
“Marketing Management”, he sees sales promotion as a key ingredient in
marketing campaign by which companies used its tools such as coupon, contest,
premium and the lie to draw a stronger and quicker buyer response including
short-run effect like highlighting product offers and boosting sagging sales.
Effective sales promotional effort is required to make consumers to be aware of
a particular product. No executive can single handedly work to achieve growth
in an organisatio0n without the use of sales promotion to maintain good
customer’s relationship so as to make an economic progress in an organization.
Without promotion, no meaningful activity will be executed and in fact there
will be no influence on the behaviour of customers as well as workers in the
working environment. In support of this, Ranchman in his book “Principles of
Marketing” support this claim by stating that sales promotion is a “catch them
all” for those short-term marketing activities such as advertising, personal
selling, or publicity, which act as incentives to stimulate quick buyers
action, consumers shows, exposition, demonstrations and various non-recurrent
selling effort.
In another definition
by Nonyelu G.N. (2012), in his book “Principles of Marketing”, he defines sales
promotion as the activity that is used to stimulate sales of a product which
occurs once over a limited time period. He also stated that sales promotion may
be directed at customer inform of trade promotion as well as to ultimate
consumers inform of consumer’s promotion. Unlike some other form of marketing
communication, sales promotion is usually intended to motivate consumers at the
point of purchase, increase sales of a product especially at those times when
normal sales are sluggish, to spurs sales to intermediaries and to industrial
buyer.
The American Marketing
Association (AMA) also defines sales promotion as those marketing activities
tools other than personal selling, advertising and other tools designed to
stimulate quicker and greater purchase of a particular product or services by
consumers, they also states that sales promotion is designed to be used as a
short-term tactic to boost sales. Although, it is not really designed to build
long-term customer loyalty, instead, it is aimed at consumers. Others are
targeted at intermediaries such as agents and wholesalers or at the firm’s
sales force.
Furthermore, Arowomole
A.K (2004) also defines sales promotion as a promo tools, because it involves
several communication activities that attempt to provide added value or
incentives to consumer, wholesaler, retailer and sales person to buy and sell
the product or to stimulate immediate sales. This effort can attempt to
stimulate product interest, trials or purchase.
In addition, Ayuba
(2009) in his book titled “Marketing Principles and Management”,defines sales
promotion as non-recurring promotional activity between the producers, the
marketing intermediaries and end users. This group of intermediaries uses this
means to persuade potential customers to buy the product, therefore without
sales promotion, no organization or firm can be able to make meaningful sales,
because sales promotion help organization promote an increase in sales, usage
or trial of the product or services. Apart from manufacturers, distributors and
retailers that initiate their own sales promotion, operators of department,
stores and supermarket also use sales promotion periodically to clear their
inventories and inform the public about their new product.
Solomon J.T and
Ogunbiyi V. (2013) in their book “Marketing
Management” also sees sales promotion as those sales activities that supplement
both personal selling and advertising and coordinating them and help to make
them effective such as display, shows and expositions, demonstration and offer.
REASONS
FOR THE RAPID GROWTH OF SALES PROMOTION
Sales promotional tools
are used by most organizations including firms, manufacturers, distributors,
retailers and non- profit institutions to boost up sales. They are targeted
towards final buyers, retailers and wholesalers, business customers and members
of sales force, several reasons have contributed to the rapid growth of sales
promotion particularly in consumer market. They include the following:
i.
Increased
promotional sensitivity:
Marketers
are making greater use of sales promotion into marketing programmes because
consumers respond favorably to the incentive, an obvious reason for consumers
increase sensitivity to sales promotion offers is that it saves money and many
purchase decision are made at Point of Purchase (POP) by consumers who are
increasingly becoming price sensitivity and facing too many choices.
ii.
Brand
proliferation:
A
major aspect of many firms marketing strategies over the past decade has been
the development of new product, such strategies such as sales promotion can
permit price discrimination by allowing the brand to compete in to or more
different market-segments. It also allows a premium brand to compete with a
lower tie brand among price sensitive consumers. For example, premium brand of
toilet soap may be on promotion in some price sensitive market, while in the
remaining market it is sold at its normal price. Therefore, through the use of
sales promotion, it will enable firm to develop new product and already
existing ones and also motivate consumers to receive sales call for such
product and increase sales of the product especially at those time when normal
sales are sluggish.
iii.
Fragmentation
of the consumer market:
As
the consumer becomes more fragmented and traditional mass media based advertising
becoming less effective, marketers are turning to more segmented and highly
targeted approaches. That is why many companies are tailoring their promotional
efforts to specific regional markets.
iv.
Short-term
focus:
Brand
managers make use of sales promotion routinely not only to introduce new
products or defend against competition, but also to meet quarterly or yearly
sales and market share goals. This has made brand managers and product managers
to find themselves under pressure to achieve short-term sales result for the
sake of their careers.
v.
Increased
accountability:
Results
from sales promotion programmes are generally easier to measure than those from
advertising that is why most companies are demanding measurable and accountable
way to relate promotional expenditures to sales and profitability.
vi.
Clutter:
The
increasing problem of advertising clutter has lead to the need to use consumer
promotion as a way of attracting attention and interest to advertising, sales
promotion offer such as coupons, contests, and sweepstakes used to attract
attention to diverts and increase consumers involvement with a marketer’s IMC
programmes.
MAJOR
SALES PROMOTION TYPES AND METHODS FOR EACH
Sales promotion is an
important component of a small business over all marketing strategy along with
advertising, public relations and personal selling. Therefore, sales promotion
is classified into three (3) categories, these types of sales promotion are
some of the means Cadbury Nigeria Plc can use to stimulate consumers to purchase
their products and make effective sales or boost up their sales.
They include the
following:
i.
Consumer promotion
ii.
Trade promotion
iii.
Sales force promotion or business
promotion
NB:
I.
CONSUMER
PROMOTION:
The
purpose of consumer sales promotion is to encourage consumer who are faced with
wide choice of product to try a particular manufacturer’s products, it is aimed
at reaching the consumer at their home to inform, educate and stimulate them to
patronize organizations products or services. Consumer sales promotion can also
be used to promote products by one business to another such as computer system,
cleaning supplies and machinery. It increases the use of production by the
consumers and creates awareness for products which can lead to additional
sales. Consumer’s sales promotion has some key techniques or methods that are
directed tol the general public. They are below:
a.
COUPONS
It is a written price reduction used to encourage
consumers to buy a specify products. Firms use this method to increase their
sales volume quickly, attract repeat purchase and to introduce new package
sizes. It may be the most effective way to switch consumer from one brand to
another.
b.
THE
PRICE PACKS:
They are also tools used by marketing firm. They
allow buyers to buy a lesser amount than the regular price shown on the labels.
Firms use the price pack to stimulate product sales, introduce a new produce
and promotion during off seasoning.
c.
MONEY
REFUND
Money refund is a sales promotion techniques or
methods that offers consumers the specify amount of money when they mil to
prove purchase. Usually the manufacturer seeks multi-product purchases before
consumers quality for the refund. As well, this technique or method is used for
production and trail of the use of product.
d.
FREE
SAMPLE:
This technique explains what a firm does or what a
firm gives out freely to the customers. In other words, a sample usually is
given to the numerous customers simple to encourage trail and purchase.
Sampling is mostly use to increase the sales volume of the specific production
in the early stage of each life-cycle.
e.
PREMIUM:
It is an item offered free or at a minimal cost as a
bounce for purchasing a product. Premium is usually used to attract the rival
customer and introduce different size of established product. Premium is placed
on or into packages and can be distributed by variation even through the mail.
Premium adds variation to a firm’s promotional effort and also helps the form
in stimulating customer’s loyalty.
f.
POINT
OF PURCHASE (POP):
They are sign and window displays used to attract
customers. These items attract attention, inform customers and encourage the
retailers to carry their brands.
g.
CONSUMER
CONTESTS:
This is a sales promotion method where individual
competes for prices base on their skills or creative skills.
h.
SWEEPSTAKES:
It is a sales promotion technique in which the
entrance simply summit inclusion in a drawing for prices. The sweepstakes are
often employed by firm. Sweepstakes are not skilled base but rather based on
luck. Winners are determined by random selection.
II.
TRADE
PROMOTION:
They are incentives given by the manufacturers to
the resellers to encourage them in carrying their brand, gives such product
enough slave space, promote or advertise and push them to the customers. It
also refers to offers extended to the middlemen and the distributors to stock
manufactures or product and also to promote the product to their customers. The
most common sums of trade promotion are shown below:
A. TRADE ALLOWANCE:
They are incentives manufacturer’s gives to
resellers to encourage them in carrying their brands, gives such product enough
slave space, promote or advertise and push them to their customers. They are
divided into three (3) methods:
i. The
buying allowance.
ii. The
buyback allowance.
iii. The
merchandize allowance.
I. THE BUYING ALLOWANCE:
It is a
temporary price reduction to the reseller for the purchase of specified quality
of a particular product. Such offers are as follows:
a. Incentive for resellers to handle
product.
b. It allows temporary price of production.
II. THE BUYBACK ALLOWANCE:
It refers to the
sum of money given to the resellers for each unit purchased after the initial
promotion deal is over.
III. THE MERCHANDIZE ALLOWANCE:
Is a
manufacturer’s agreement to buy the reseller certain amount of money for
providing special promotional efforts.
B. FREE MERCHANDIZE:
It
refers to manufacturer’s reward given to retailers when a specified quantity of
product is purchased.
C. CO-OPERATIVE ADVERSTISING:
It is a method in
which the manufacturer agrees to pay a certain amount of the retailer media
cost. In this situation, the brand marketer pay for all or some of the
advertising cost of the resellers
