Sales Promotion is an element of the marketing process that can close the sale of good or services to a potential customer by providing the incentive to buy. Sales promotion, advertising, and salesmanship are the major techniques used in merchandising products to the public.
Distinction between advertising and sales promotion
Advertising aims to persuade customers or provide information, whereas sales promotion aims to promote sales. Advertising is done through indoor and outdoor advertising media whereas sales promotion is done through gifts, price reductions, special offers, point of sale, offers, sponsorship and trade fairs and exhibitions. Sales promotion might be carried out for a specific period whereas advertising needs to be carried out through out the life of the product.
Note that advertising is also part of the whole promotion process of a product. However the the difference between the two aspects is that, sales promotion is often short term. it may be for a special occasion like Olympics, Eid Holidays etc.
Methods of Sales Promotion
This form of sales promotion can be used for goods that are cheap and which will be on sale nationally. While launching the product, free samples can be offered through stands at the supermarkets. In departmental stores, free samples of perfume are placed for testing purposes by customers. Samples of women’s cosmetics can be given away free of charge with women’s magazines.
Customers often expect household articles to be offered at reduced prices. Some producers distribute coupons to customers. The customer can use these coupons for part payments.
Sometimes competitions are held. Customers have to purchase several packets of the producer’s goods to enter the competition.
Gifts such as glasses, caps or cups may be given to customers if they buy the producer’s goods.
Point of sales
In a trade fair or exhibitions, the producer of a product has a stall where the salesmen do a free product demonstration and at the spot, sale is done with offers and gifts.
Loss leaders: In this method the retailers advertise that they are selling a well-known product at a low price. The other products will be charged at a higher price. The consumers visiting the shops buy not only the good that has a discounted price, but they also buy so many other items which they need. So any reduced profit from the discounted item can be recovered from the sales of other items.
During festivals many traders announce special offers. These offers carry a special discount or a free service during a specific period of time. Customers tend to buy more when there are offers. Example, during New Year eve, manufacturers announce 20 – 30% special offers on certain range of consumer goods like home appliances, consumer durables and fabric items.
Special credit terms
When it comes to buying expensive goods, customers often look for a credit scheme. Special credit scheme such as ‘interest free credit’ for a particular period may be used to encourage customers to buy such items.
Certain expensive products like cars and motorbikes require regular maintenance and servicing. A company can offer to provide these services for free or a discounted price to encourage people to buy from the company rather than from competitors.