Sales promotion is one of the four aspects of promotional mix. (The other three parts of the promotional mix are advertising, personal selling, and publicity/public relations.) Sales promotions are non-personal promotional efforts that are designed to have an immediate impact on sales. Media and non-media marketing communications are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability.
Sales promotions can be directed at either the customer, sales staff, or distribution channel members (such as retailers). Sales promotions targeted at the consumer are called consumer sales promotions. Sales promotions targeted at retailers and wholesale are called trade sales promotions. Some sale promotions, particularly ones with unusual methods, are considered gimmick by many.
Consumer sales promotion techniques
* Price deal: A temporary reduction in the price, such as happy hour
* Loyalty rewards program: Consumers collect points, miles, or credits for purchases and redeem them for rewards. Two famous examples are Pepsi Stuff and AAdvantage.
* Cents-off deal: Offers a brand at a lower price. Price reduction may be a percentage marked on the package.
* Price-pack deal: The packaging offers a consumer a certain percentage more of the product for the same price (for example, 25 percent extra).
* Coupons: coupons have become a standard mechanism for sales promotions.
* Loss leader: the price of a popular product is temporarily reduced in order to stimulate other profitable sales
Trade sales promotion techniques
- Trade allowances: short term incentive offered to induce a retailer to stock up on a product.
- Dealer loader: An incentive given to induce a retailer to purchase and display a product.
- Trade contest: A contest to reward retailers that sell the most product.
- Point-of-purchase displays: Extra sales tools given to retailers to boost sales.
- Training programs: dealer employees are trained in selling the product.
- Push money: also known as "spiffs". An extra commission paid to retail employees to push products.
Sales promotions have traditionally been heavily regulated in many advanced industrial nations, with the notable exception of the United States. For example, Britain formerly operated under a resale price maintenance regime in which manufacturers could legally dictate the minimum resale price for virtually all goods; this practice was abolished in 1964.
Most European countries also have controls on the scheduling and permissible types of sales promotions. Germany is notorious for having the most strict regulations. Famous examples include the car wash that was barred from giving free car washes to regular customers and a baker who could not give a free cloth bag to customers who bought more than 10 rolls.
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This is an extract from Wikipedia, the Free Encyclopedia
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