Sales Promotion

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The sales promotion is a component of the marketing factor, called Promotion-Communication, whose other components are advertising, public relations and sales. Its main objective is to stimulate sales. The promotional incentives must present exceptional, since it's an instrument to achieve short - term results. Finally, you have to remember the end customer or the channel.

All the media on which the promotion is based have different characteristics in common:

  • Communication: They attract attention and usually provide information that "pushes" the product to the customer.
  • Incentives: They incorporate or carry a certain concession or special advantage, which increases the value of the offer before the client.
  • Invitation: They incorporate a clear invitation for the customer to decide to buy in the short term.

The goals of sales promotion

The main objectives of promotion at the company level are:

  • Liquidate stocks
  • Motivate the sales team
  • Get more liquidity in the short term
  • Boost the sales figure significantly

The main objectives of the promotion at the market level are:

  • Differentiate yourself from the competition
  • Make it difficult to compare prices
  • Introduce new products
  • Increase the consumption habit
  • Capture undecided consumers

The main objectives of promotion at the distribution level are:

  • Liquidate perishable (low-selling) or declining products
  • Accelerate stock turnover
  • Improve the image in front of distributors
  • Extend distribution
  • Gain presence at the point of sale
  • Liquidate dealer stocks
  • Motivate and directly involve the distributor

The characteristics of sales promotion

The definition of the sales promotion and its comparison with the other elements of the communication mix it possible to highlight some interesting characteristics of the promotion:

  • The purpose of sales promotion is to increase the ability and desire of salespeople, distributors, and merchants to sell the company's products and to create a desire in potential customers to buy them by "bringing the products closer to them."
  • Sales promotion is a discontinuous incentive in time, in form and in character. Each time it starts, it must be a sporadic action, limited in time. This doesn't prevent a successful promotion from being repeated.
  • Promotion is used to drive sales in the short term.
  • It constitutes an incentive unrelated to the intrinsic characteristics of the product. It's not about improving the product, but about driving sales. If, for example, a packaging is improved for promotional purposes, it's no longer a promotion, since the packaging is part of the attributes or qualities of the product.
  • Promotion is an independent incentive from advertising. It motivates and informs and then sells. Instead, the promotion drives the sale immediately. The confusion between the two comes from the fact that most promotional actions must be communicated and advertising is used for this. Advertising "brings" the customer closer to the product; PV "brings" the product closer to the customer.
  • Promotion is an incentive that can take multiple forms. It covers different actions in each specific case; These can consist of a gift, a price discount, or participation in a raffle.
  • It must be done by establishing a relationship between the promotional bonus and the product and between the promotional bonus and the customer. For example, if you're promoting a toothpaste, a suitable promotional bonus would be a toothbrush or dental floss.

The advantages and disadvantages of the promotion

The advantages of the promotion are that:

  • It allows to counteract differences in prices or discounts with respect to other competitors.
  • It increases sales vertically in the short term and in the long term it provides stability in them.
  • Your results and costs can be controlled fairly accurately.
  • It allows to release excess production or reduce stocks.
  • It manages to capture, even temporarily, a part of the market share of competitors.

The main drawbacks of the promotion are:

  • The customer may focus more on the incentive than the product.
  • It demands a constant increase of the value of the gift directed to the clients, due to the promotional fights with the competition.
  • There is a danger that the customer will get used to the promotion.

Sales promotion effectiveness

Ultimately, the promotion is neither good nor bad . It can be effective or ineffective as long as it meets or not the objectives that are intended. To set these objectives, it's essential to take into account the advantages and disadvantages that have just been pointed out. This allows us to talk about the problems that promotions can solve and the cases in which it's not convenient to use them.

The main situnation in which it's advisable to launch a promotion are when:

  • The number of customers who buy a product is insufficient.
  • There is a need to introduce a new product.
  • Buyers don't buy large enough quantities, or they don't buy very often.
  • Competition is very strong in certain local areas or at certain times of the year.
  • Stocks are slowly replenished.

On the contrary, there are cases in which the realization of promotions is inadvisable, such as, for example, when:

  • Products are purchased for the distinction, category, or status symbol they provide.
  • These are well-known products, located in a very mature and declining market.
  • The products are very different from those of the competition, that is, easily noticeable.
  • The products enjoy good brand image and stable sales.
  • The products are established in a market with no promotional tradition.
A number of golden rules must be put into practice when planning a promotional campaign. These rules are intended to avoid certain circumstances that would lead to the failure of the campaign.

By considering them, a true fine-tuning of the project is performed and its success is remarkably guaranteed:

  • Make sure that all the people involved in the promotion understand the campaign in the same terms.
  • Establish the objectives that the campaign intends, which may include: giving the product greater notoriety, increasing sales, introducing a new product, etc.
  • Promotional activities to produce a short-term increase in sales should self-finance your expenses.
  • It reaffirms the definition of what a promotion is, but many companies fail to comply with it. A sales promotion should not become a permanent offer. Otherwise, it's incorporated "ex officio" into the product, it ceases to "be news" and the customer demands it without, however, generating the benefits that offset the additional costs incurred.
  • It proposes the creation of a base document that makes all those involved in the promotion fully informed, while facilitating a unification of criteria on topics such as the objectives pursued or the duration of the campaign.
  • Recommends hiring exclusively specialized companies with experience in the target market to carry out the promotional campaign.
  • It proposes, when the financial risk is important, to carry out a test on the promotion before presenting it to the public. The test should also be done when the type of promotion is new and original, so it's unknown what the reaction of the target audience will be.
  • It warns of the need to observe all legal requirements, to avoid hurting the client's susceptibility.
  • Try to make the idea of ​​the promotion usable at all levels of the distribution channel: wholesaler, retailer, end customer.
  • Evaluate how the promotion can affect the image of the company that carries it out. Many companies don't coordinate their production line well with their promotional campaigns, and the gaps that, where appropriate, may arise in the service of the product are likely to deteriorate the image of the company or the product.
  • It warns about the discretion with which the campaign should be planned so that it doesn't transcend the competition, since it can develop a counter-campaign that detracts from the objectives of the promotion.
  • Ask that sufficient human resources be allocated to carry out the promotion.

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