Sales promotion and its importance

Introduction of Sales promotion

“Sales promotions may be defined as all the marketing and promotion activities, other than advertising, personal selling and publicity that motivate and encourage the consumer to purchase by means of such inducements as premiums, advertising specialties, stamps, refunds, rebates, exhibits, displays and demonstrations.

It is employed as well, to motivate retailers, wholesalers; the manufacturer’s sales forces to sell through the use of such incentive as awards or prizes (merchandise, cash and travel), direct payments and allowances, co-operative advertising and trade show. It offers a direct inducement to act by providing extra worth over and above what is built into the product as its normal price. These temporary inducements are offered usually at a time and place, the buying decision is made.”

Importance of Sales Promotion:

Customers are more selective in; their buying choices and a good promotional programme is needed to reach them. The main purpose of sales promotion is to boost sales of a product by creating demand, that is, both consumer demand as well as trade demand. It improves the performance of middlemen and acts as a supplement to advertising and personal selling.

In recent years, the importance of sales promotion has increased. The amount spent on sales promotion now equals the amount spent on advertising. The sales promotion increase is due to the changes in the marketing environment. The importance of sales promotion increase is due to the thinking of new ideas for creating a favourable condition of selling, promoting sales and future expansion of sales.

It helps in achieving the following purposes:

1. The basic purpose of promotion is to disseminate information to the potential customers.

2. Sellers use incentive-type promotions to attract new customers, to reward loyal customers and to increase the repurchase rates of occasional users.

3. To encourage the customers to try a new product. An interesting example: the Brooke Bond Tea of India used to distribute free tea to every household during 1930’s, in order to promote tea drinking habits among the people of Chennai.

4. Sales promotions yield faster responses in sales than advertising.

5. Sales promotion is considered as a special selling effort to accelerate sales.

6. Brand switchers are primarily looking for low price, good value and premiums. Sales promotions are likely to turn them into loyal brand users.

7. It helps to defeat competitors’ promotional activities.