Reds Marketing Tips

Reds regularly creates Marketing Tips for users who would like to increase, and perfect their marketing campaigns.
5 minutes reading time (969 words)

Why Sales Promotion Increases Sales

Sales promotion is a blend of marketing activities and promotional items to intensify the efforts of your sales force, induce your intermediaries to stock and sell your products, and persuade your customers to purchase the offering within a specified, limited time period.

point of sale Reds Tips 03Why do customers respond to sales promotions?
* They have a positive feeling about your brand which is linked to an unconditional stimulus such as a discount
* Reinforced reward - in-pack discount voucher and once tried, they keep coming back.
* Their attitude changes after trial - repeat purchase.
* Foot in the door' technique - sample is tried to gain a larger order.
* Salesforce promoting benefits to alter customers perception of the offering.
* Price perception - the perceived benchmark by customers. Used by quoting the reference price and sales price to assist the customer to calculate the savings.
* Decision-making process - end of isle items trigger recognition to purchase or seeing a machine in a magazine and it reminds them to place an order for a service or part.

Type Of Sales Promotion Objectives
* Encourages sales force to move slow-moving items
* Challenges sales force to locate and qualify new prospects
* Set up more store displays
* Train more distributor salespeople
* Induce wholesalers to carry a new product line
* Persuade distributors to promote (push) a brand in their promotional activities
* Persuade retailers to give a particular brand shelf space
* Encourage retailers to support sales promotion campaigns by carrying more inventory

Sales promotion is one of 6 elements in the marketing mix and should thus be used against the background of the firm's overall marketing communication strategy.
A firm selling expensive machines would not get involved in a sweepstake but would rather create a quality image through their distribution network by advertising in trade magazines and including personal selling in the mix.

How does sale promotion affect sales?
* Brand switching - does not only occur with price promotions. Customers might also buy the brand most readily available, or the brand on display. This is why there is rivalry amongst marketers for the end of aisle locations.
* Repeat purchasing -
* To create a habit of purchasing the offer
* Product extension - to purchase the same brand of the microwave after a refrigerator was bought
* Purchase acceleration -
* Purchase larger volumes - bulk buying
* Load customer to beat competitors promotion - two for the price of one

Category expansion -
* Give the customer another reason to buy - e.g. baking soda to remove stains and odours.
* Increase the consumption rate - recipe/technical books with a product showing new ways to use the product

What sales promotion can do
* Stimulate sale force enthusiasm for a new improved or even mature product
* Find new prospects
* Rekindle sales of a mature product
* Counteract seasonal slumps in sales
* Facilitate the introduction of new products to the trade
* Increase merchandising shelf space
* Reduce stock and increase turnover
* Neutralise competitive advertising and sales promotion
* Obtain trial purchases from consumers
* Retain existing users by encouraging repeat purchases
* Increase product usage by loading up consumers
* Reinforce advertising

Types of sales promotions
Internal Sales Promotion
Timing is very important. It should not become a regular routine event. Launch and feedback are two important factors. Campaign promotion will contribute to keen participation and constant feedback will keep enthusiasm at a high level.

Sale promotion to distributors
This is to introduce new or improved products and to increase shelf space. Sales promotion can be in the form of trade allowances such as a price reduction if certain quantities have been reached. Cooperative advertising when the cost is usually split 50-50. Trade contests and incentives can be extended to the distributor's management and staff.

Point Of Purchase
One of the most important forms of sales promotion. Displays are designed to attract attention and enhance the attractiveness of the products displayed. They come in various forms - posters, mobiles, wobblers, shelf talkers, coupon dispensers, in-aisle display, end-of-aisle display, front of store display, standees, dump bins etc.

Speciality advertising
Sale promotion that uses a number of materials and useful articles to carry your brand, such as T-shirts, calendars, pens, diary etc

Trade Shows
Provides effective opportunity to introduce new products and attract local and international dealers and distributors.

Offering a trial run is one of the most effective ways to introduce a new or old product. Nivea cream had a very effective promotion with young ladies in leotards with blue balloons handing out samples.

This is a growing sales promotion technique in South Africa but we are far behind the USA who redeem an estimated 8 billion coupons per annum.

A free giveaway to encourage customers to purchase the offering. Dunlop Tyres' new giveaway is a cooler box with an assortment of picnic plastic containers inside.

Contest and sweepstakes
A contest requires the participant to apply a skill to create something such as a slogan, new idea or concept - Five Roses Tea uses this form of promotion to great effect. The prize is usually a fantastic holiday. The degree of consumer involvement is high as it appeals to the human desire for a bargain.
Sweepstakes are a game of chance with every entrant having an equal chance of winning- Readers Digest and charity organisations.
This type of promotion creates a high level of consumer awareness and a renewed interest in products can be achieved.

Sales promotion is a very effective way to increase sales and price incentives are very effective where low brand loyalty exists. A mix in the offer could be a small reduction in price, a new benefit, being readily available and a challenge to try.

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