Sales Promotion – Objectives, Strategies, Advantages, Limitations

Advertising, sales promotion and personal selling are the three major inter-related tools of promotion which supplement the efforts of each other. Sales promotion is regarded as one of the best tool of promotion as it helps in stimulating customer demand, supplementing advertising activities through cheaper means, facilitating personal selling and improving the overall marketing performance of the seller.

According to W.J. Stanton, “Sales promotion includes all those activities other than activities like advertising, personal selling, public relations and publicity that are intended to stimulate consumer demand and improve the marketing performance of the seller.”

It is the process of convincing a customer to buy a product by putting in various non-recurrent selling efforts. Sales Promotion activities are basically carried out to increase consumer demand and the sales volumes during a particular period of time. It can be classified into three types:

  1. Customer Promotion: All sales promotion efforts are targeted towards the end consumers to stimulate demand.

  2. Trade promotion: All sales promotion efforts are targeted towards the middlemen to push the product towards the end consumer.

  3. Sales force promotion: It involves efforts targeted towards the sales force to boost the morale of salesmen.

Objectives of Sales Promotion

Organizations usually carry out promotional activities to increase their sales volume. However, it is an activity carried out by organisations for achieving many purposes that are listed below:

  1. To stimulate consumer demand and attract prospective customers

  2. To increase market demand and market share

  3. To create new a market for a product

  4. To achieve stable sales pattern

  5. To encourage middlemen to store and supply products

  6. To increase the sales volumes

  7. To improve producer-retailer relations

  8. To counter competitors sales strategy

  9. To motivate the sales force

  10. To inform the market about the availability of the product

  11. To introduce a new feature added to an existing product or introduce a new product line

  12. To create brand awareness and build goodwill

Sales Promotion Strategies

Sales Promotion activities are carried out by organizations for the benefit of Sales Department, Retailers and Dealers who deal with the organisation’s products and end customers. Some Sales Promotion activities carried out by organizations are:

  1. Loyalty cards

  2. Competitions

  3. Free Gifts / Freebies

  4. Discount Coupons

  5. Gift Vouchers

  6. Free Samples

  7. Rebates

  8. Reward programs (for retaining customers)

  9. Repeat Purchase points

  10. Redeemable Reward Points

  11. Credit purchase programs

  12. Coupon Booklets

  13. Mobile refilling / recharging

  14. PAYTM Points

  15. Buy One Get One free offers

  16. Freebies signed by famous personalities

Some Sales Promotion activities carried out by organizations targeting large stores and super markets are listed below. Such benefits are passed on to the business partners to encourage them to stock their products in adequate quantities and promote their sales to customers.

  1. Training programs to enhance their knowledge about the products so they can explain the same to the customers

  2. Trade Allowances for stocking specified quantities of stocks particularly during specified periods of time

  3. Trade Discounts for Distribution Channel partners

  4. Dealer Loaders for retail partners for displaying and selling their product

  5. Push Money to Employees of the Retailers for selling their products on priority

  6. Trade Contests for retailers who sell huge quantities of products

Advantages of Sales Promotion

Sales Promotion offers many advantages to organizations, dealers and retailers associated with the business and the end customers who buy the products. Some such advantages are:

  1. Boosts sales within a short period of time

  2. Makes customers switch between brands

  3. Helps customers feel comfortable with their purchase through trials

  4. Enhances Brand visibility

  5. Helps Sales people achieve sales volumes

  6. Enhances relations between the organizations, sales force, retailers and distributors 

  7. Helps retain customers

  8. Helps rope in new set of customers

  9. Helps publicize new features added to products

Limitations of Sales Promotion

  1. The effect of sales promotion can be felt only for a brief period of time

  2. Sales promotions may set wrong expectation in customers who may start expecting such activities in a frequent manner.

  3. When sales promotion activities are not carried out as per the expectations of the customer, the brand image may get distorted

  4. Sales Promotion involves cost and so it may make a dent on the profitability aspects of the organization

  5. Sales Promotion activities may sometime get affected due to external factors that is not in the control of the organization

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