Sales promotion
Encyclopedia
Sales promotion is one of the four aspects of promotional mix
Promotional mix
There are seven main aspects of a promotional mix. These are:* Advertising - Presentation and promotion of ideas, goods, or services by an identified sponsor...

. (The other three parts of the promotional mix are advertising
Advertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...

, personal selling
Sales
A sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity....

, and publicity
Publicity
Publicity is the deliberate attempt to manage the public's perception of a subject. The subjects of publicity include people , goods and services, organizations of all kinds, and works of art or entertainment.From a marketing perspective, publicity is one component of promotion which is one...

/public relations
Public relations
Public relations is the actions of a corporation, store, government, individual, etc., in promoting goodwill between itself and the public, the community, employees, customers, etc....

.) Media and non-media marketing communication are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability. Examples include contest
Competition
Competition is a contest between individuals, groups, animals, etc. for territory, a niche, or a location of resources. It arises whenever two and only two strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For...

s, coupon
Coupon
In marketing, a coupon is a ticket or document that can be exchanged for a financial discount or rebate when purchasing a product. Customarily, coupons are issued by manufacturers of consumer packaged goods or by retailers, to be used in retail stores as a part of sales promotions...

s, freebies
Freebie marketing
Freebie marketing, also known as the razor and blades business model, is a business model wherein one item is sold at a low price in order to increase sales of a complementary good, such as supplies or software...

, loss leader
Loss leader
A loss leader or leader is a product sold at a low price to stimulate other profitable sales. It is a kind of sales promotion, in other words marketing concentrating on a pricing strategy. A loss leader is often a popular article...

s, point of purchase displays, premium
Premium (marketing)
Premiums are promotional items—toys, collectables, souvenirs and household products—that are linked to a product, and often require box tops, tokens or proofs of purchase to acquire. The consumer generally has to pay at least the shipping and handling costs to receive the premium...

s, prizes
Prize (marketing)
Prizes are promotional items—small toys, games, trading cards, collectables, and other small items of nominal value—found in packages of brand-name retail products that are included in the price of the product with the intent to boost sales...

, product samples, and rebates
Rebate (marketing)
A rebate is an amount paid by way of reduction, return, or refund on what has already been paid or contributed. It is a type of sales promotion marketers use primarily as incentives or supplements to product sales. The mail-in rebate is the most common...



Sales promotions can be directed at either the customer
Customer
A customer is usually used to refer to a current or potential buyer or user of the products of an individual or organization, called the supplier, seller, or vendor. This is typically through purchasing or renting goods or services...

, sales staff, or distribution
Distribution (business)
Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...

 channel members (such as retailers). Sales promotions targeted at the consumer
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...

 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 gimmicks by many.

Sales promotion includes several communications activities that attempt to provide added value or incentives to consumers, wholesalers, retailers, or other organizational customers to stimulate immediate sales. These efforts can attempt to stimulate product interest, trial, or purchase. Examples of devices used in sales promotion include coupons, samples, premiums, point-of-purchase (POP) displays, contests, rebates, and sweepstakes.

Consumer sales promotion techniques

  • Price deal: A temporary reduction in the price, such as 50% off.
  • Loyal Reward Program: Consumers collect points, miles, or credits for purchases and redeem them for rewards.
  • 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
    Loss leader
    A loss leader or leader is a product sold at a low price to stimulate other profitable sales. It is a kind of sales promotion, in other words marketing concentrating on a pricing strategy. A loss leader is often a popular article...

    : the price of a popular product is temporarily reduced in order to stimulate other profitable sales
  • Free-standing insert (FSI): A coupon booklet is inserted into the local newspaper for delivery.
  • On-shelf couponing: Coupons are present at the shelf where the product is available.
  • Checkout dispensers: On checkout the customer is given a coupon based on products purchased.
  • On-line couponing: Coupons are available online. Consumers print them out and take them to the store.
  • Mobile couponing: Coupons are available on a mobile phone. Consumers show the offer on a mobile phone to a salesperson for redemption.
  • Online interactive promotion game: Consumers play an interactive game associated with the promoted product.
  • Rebates
    Rebate (marketing)
    A rebate is an amount paid by way of reduction, return, or refund on what has already been paid or contributed. It is a type of sales promotion marketers use primarily as incentives or supplements to product sales. The mail-in rebate is the most common...

    : Consumers are offered money back if the receipt and barcode
    Barcode
    A barcode is an optical machine-readable representation of data, which shows data about the object to which it attaches. Originally barcodes represented data by varying the widths and spacings of parallel lines, and may be referred to as linear or 1 dimensional . Later they evolved into rectangles,...

     are mailed to the producer.
  • Contests/sweepstakes/games: The consumer is automatically entered into the event by purchasing the product.
  • Point-of-sale displays:-
    • Aisle interrupter: A sign that juts into the aisle from the shelf.
    • Dangler: A sign that sways when a consumer walks by it.
    • Dump bin: A bin full of products dumped inside.
    • Glorifier: A small stage that elevates a product above other products.
    • Wobbler: A sign that jiggles.
    • Lipstick Board: A board on which messages are written in crayon.
    • Necker: A coupon placed on the 'neck' of a bottle.
    • YES unit: "your extra salesperson" is a pull-out fact sheet
      Fact sheet
      A fact sheet, factsheet or one-sheet is a presentation of data in a format which emphasizes key points concisely. The layout is simple and often standardized, e.g...

      .
    • Electroluminescent: Solar-powered, animated light in motion.
  • Kids eat free specials: Offers a discount on the total dining bill by offering 1 free kids meal with each regular meal purchased.

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: Used to create the urge of "impulse" buying and selling your product on the spot.
  • Training programs: dealer employees are trained in selling the product.
  • Push money: also known as "spliffs". An extra commission paid to retail employees to push products.

Trade discounts (also called functional discounts): These are payments to distribution channel members for performing some function .

Retail Mechanics

Retailers have a stock number of retail 'mechanics' that they regularly roll out or rotate for new marketing initiatives.
  • Buy x get y free a.k.a. BOGOF for Buy One Get One Free
  • Three for two
  • Buy a quantity for a lower price

Political issues

Sales promotions have traditionally been heavily regulated in many advanced industrial nations, with the notable exception of the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

. For example, the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

 formerly operated under a resale price maintenance
Resale price maintenance
Resale price maintenance is the practice whereby a manufacturer and its distributors agree that the latter will sell the former's product at certain prices , at or above a price floor or at or below a price ceiling...

 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, as they are regarded in those countries as bordering upon unfair business practices
Unfair business practices
Unfair business practices encompass fraud, misrepresentation, and oppressive or unconscionable acts or practices by business, often against consumers and are prohibited by law in many countries. For instance, in the European Union, each member state must regulate unfair business practices in...

. Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...

 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.

See also

  • Alcohol advertising
    Alcohol advertising
    Alcohol advertising is the promotion of alcoholic beverages by alcohol producers through a variety of media. Along with tobacco advertising, it is one of the most highly-regulated forms of marketing...

  • Demand chain
    Demand chain
    -Concept:Analysing the firm's activities as a linked chain is a tried and tested way of revealing value creation opportunities. The business economist Michael Porter of Harvard Business School pioneered this value chain approach: "the value chain disaggregates the firm into its strategically...

  • Institute of Sales Promotion
    Institute of Sales Promotion
    The Institute of Sales Promotion is an organisation in the UK that represents brand owners, agencies and service partners engaged in promotional marketing. Formed in 1933, it was established as the ISP in 1979 and provides professional diplomas and certificates, best-practice guidelines and...

  • Marketing
    Marketing
    Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...

  • Pricing
    Pricing
    Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, market place, competition, market condition, and quality of product. Pricing is also a key variable in microeconomic price allocation theory. Pricing is a...

  • Promotion
    Promotion (marketing)
    Promotion is one of the four elements of marketing mix . It is the communication link between sellers and buyers for the purpose of influencing, informing, or persuading a potential buyer's purchasing decision....

  • Sales Promotion (magazine)
    Sales Promotion (magazine)
    Sales Promotion magazine is a monthly UK business-to-business magazine for people working in marketing.It was launched in 1989 by Brainstorm Publishing, based in Hertford. It was then purchased in 1991 by Marketlink Publishing, based in Bishops Stortford, Hertfordshire, and latterly Saffron Walden,...

  • Tobacco advertising
    Tobacco advertising
    Tobacco advertising is the advertising of tobacco products or use by the tobacco industry through a variety of media including sponsorship, particularly of sporting events. It is now one of the most highly regulated forms of marketing...

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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