Understand the concept of sales promotion

The term ‘market’ refers to a location where buyers and sellers meet to conduct transactions involving the exchange of products and services in the conventional sense. This is the meaning in which the phrase is still used in everyday conversation today. It is also used to describe a product market (cotton market, gold market, or stock market), a geographic market (national and international market), the kind of purchasers (consumer market and industrial market), and the number of commodities exchanged (retail market and wholesale market). However, the term market has a larger connotation in modern marketing. 

What is the Market? 

A group of existing and potential purchasers of a product or service is referred to as a buyer’s list. For example, when a fashion designer creates a new garment and offers it for exchange, the market for that dress may be defined as all those prepared to buy it and contribute some value in exchange. Similarly, the market for fans, bicycles, electric lamps, and shampoos refers to all current and future purchasers of these items.

What is Marketing? 

The term ‘marketing’ has been defined in various ways by various people.

Some individuals mistakenly think that marketing and shopping are the same things. They refer to shopping for certain items or services as marketing whenever they do so.

Another mistake is thinking marketing is ‘selling’ and believing that marketing begins after a product or service has been created. Some individuals use ‘merchandising’ and ‘creating a product’ to describe it. Although all of these explanations are partially valid, marketing is a much bigger topic that is described in the following section.

Marketing has traditionally been defined in terms of its roles or activities. Marketing is defined as the conduct of commercial operations that steer the flow of products and services from producers to consumers in this context. Thus, marketing is a social process in which individuals engage with one another to convince them to do something, such as buy a product or service, rather than forcing them to. 

Characteristics of Marketing

A close examination of the term reveals the following key characteristics of marketing: 

1. Needs and wants: The marketing process assists people and groups in achieving what they want and desire. As a result, consumers’ major reason or motive to engage in the marketing process is to meet some of their needs or desires. In other words, the marketing process is centred on meeting the needs and desires of individuals and organisations. A state of perceived deprivation or emotion of being deprived of something is necessary. If a person feels dissatisfied, they will be unpleasant and uncomfortable. For example, when we are hungry, we get unsettled and begin hunting for stuff that might fulfil our needs.

2. Customer value: The marketing process makes it easier for buyers and sellers to interchange items and services. On the other hand, buyers base their purchasing decisions on their judgments of the product’s or service’s value in meeting their needs in proportion to its cost. A product will only be purchased if it provides the most benefit or value for the money. A marketer’s goal is to increase the value of a product such that buyers prefer it over rival products and choose to buy it.

Sales Promotion

Short-term incentives meant to induce customers to purchase a product or service are sales promotions. These activities comprise anything a corporation does to increase sales other than advertising, personal selling, and publicity. Cash discounts, sales competitions, gift giveaways, and free sample distribution are sales promotion activities. In most cases, sales promotion enhances other promotional activities like advertising and personal selling.

Companies utilise sales promotion methods created expressly to advertise to customers (e.g., free samples, discounts, and contests), tradesmen or intermediaries (e.g., cooperative advertising, dealer discounts, dealer incentives and contests), and salespeople (e.g., bonus, salesman contests, special offers). Only those actions utilised to give short-term incentives to improve a company’s sales are considered sales promotions.

Benefits of Sales Promotion

1. Attention value: The employment of incentives in sales promotion activities draws people’s attention.
2. Helpful for new product launch: Sales promotion tools may be extremely effective when a new product is first introduced to the market. It encourages customers to abandon their usual purchasing habits and try a new product.
3. Synergy in total promotional efforts: Sales promotion activities are intended to support a firm’s selling and advertising efforts while also increasing the overall efficacy of the firm’s promotional efforts.

Limitation of Type of Sales Promotion

1. Reflects crisis: If a company relies heavily on sales marketing, it may convey the appearance that it is unable to control its sales or that its product is unpopular.
2. Degrades product image: The use of sales promotion tools can degrade a product’s image. Buyers may feel that the product is of poor quality or is overpriced.

Frequently Used Promotional Activities for Sales Activities

1. Discount: Discounts are providing things lower than the advertised price. For example, consider a shoe company’s offer of ‘Discount Up to 50%’ or a shirt marketer’s offer of ’50+40% Discount’.

2. Refunds: Refunding a portion of a customer’s purchase price in exchange for proof of purchase, such as the return of empty foils or wrappers. This is a frequent tactic employed by food manufacturers to increase sales.

3. Instant draws and assigned gifts: For example, with purchasing a television, you may ‘Scratch a Card’ or ‘Burst a Cracker’ and instantly win a refrigerator, car, t-shirt, or computer.

4. Lucky draw: For example, a bathing soap offer to win a gold coin on a lucky draw coupon for free gasoline on the purchase of a specified quantity of petrol from a given petrol pump or a lucky draw coupon on the purchase of a comfortable undergarment and win a car offer.

5. Useful benefit: ‘Buy products worth Rs 3000 and receive a Rs 3000-holiday package free’, or ‘Get a Discount Voucher for Accessories on Apparel Purchases of Rs 1000 and Above’.

Conclusion 

Short-term incentives meant to induce customers to instantly purchase a product or service are advertising and sales promotion. These include non-advertising promotional initiatives, personal selling, and publicity, all of which are used by a corporation to increase sales. Rebates, discounts, refunds, product combinations, quantity gifts, instant draws and assigned gifts, lucky draws, usable benefits, full finance @0%, sampling, and contests are all common advertising and sales promotion activities. In the sense that it is a non-personal kind of communication, publicity is akin to advertising. It is, however, a non-paid type of sales promotion, as opposed to advertising.