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Sales Promotion Techniques Sample Paper

Updated on February 21, 2012

Introduction

"Everyone lives by selling something" (Robert Lewis Stevenson). Even at the very front lines of any company, where one does little more than answer the phones or provide technical support, we all succeed, because we are part of a company that sells something. We may be selling ourselves to get a job; and, when we get that job, we sell the company and its products and/or services with each interaction we have with vendors and customers. At the core of any company is its ability to sell, which is spearheaded by the company’s marketing team. Simply providing a quality product or service at a given price is not enough to be successful. Sales often rely upon the emotion that we can attach to the product or service for the buyer. In fact, “84% of all buying decisions are based upon emotion - not logic,” (Farrington, 2011). One way to enhance those emotions—and effectively close a sale—is to provide the buyer with information that makes them feel they are getting a deal, perhaps one that is not going to be around for long. There are a variety of sales promotion techniques commonly practiced in business, both for business to business sales and business to consumer sales. These include deals and discounts, increasing industry visibility, price-based consumer sales promotions, and attention getting consumer sales promotions. It is important that any marketing professional understand these four basic concepts.

Deals & Discounts

One way to increase sales to businesses is to offer deals and discounts. We would typically see this behaviour from a manufacturer to a retailer or wholesale business, which helps keep the price to the consumer lower, theoretically increasing the amount the consumer will buy. The promotional technique includes the practice of a merchandising allowance. The merchandising allowance provides a retailer with funds to enhance in-store support with the retailer. When we see the large displays set up in center aisles, on end caps, or other choice locations. Essentially, the manufacturer has paid for that extra space to be dedicated to their product. The pricing of the product is not necessarily lowered at this point, but the item is set apart from the rest of its kind. This draws attention to the item, and it makes it less convenient for the consumer to check the price compared to similar products. The case allowance or bulk discount method also falls under deals and discounts. At its most basic level, the manufacturer discounts the cost for larger orders placed by the retailer. The retailer already gets a discount from the suggested retail price, so case allowance or bulk discounting is a bigger discount, making it worthwhile to the retailer to purchase more. The manufacturer offers this lowered price for a limited amount of time. Larger retailers—particularly those with larger warehousing options—may purchase an inordinate amount of a product from the manufacturer at this price, not purchasing again until there is another similar offer from the manufacturer. Some retailers will go so far as to purchase and store enough product at the discounted rate, wait for the discounted rate to no longer be available, and then sell to other retailers at a price where they are making a profit, but it is less than the manufacturer is offering (Solomon and Marshall, 2008).

Increasing Industry Visibility

Another well practiced method to heighten the sales from a manufacturer to their retail buyers is to get out there and be noticed=--increase their visibility in the industry. There are a number of ways to do this. Of course, a manufacturer would send informational packets to current and possibly interested, future retail outlets, but they have a number of other techniques to try as well. There are trade shows, where manufacturers will set up the most elaborate booths they can to draw attention. They provide demonstrations at these trade shows, and they also often provide small giveaways including pens, calendars, even sample products. They want to be sure their retail and wholesale customers remember them. Even if they do not make a sale right away, they want to be a name readily at the top of a possible customer’s memory. Many manufacturers also go with incentive programs, encouraging their manufacturers to buy more; encouraging their sales reps to sell more. When a buyer buys more or s sales rep sells more, they may get a special gift. Mary Kay gives its top sales reps a pink car. A comic book dealer might get a special cover of a particular comic book when they order a certain amount. A retailer might get a set of golf clubs once they have ordered a certain amount of cases of cereal. There are many variations of how incentives work, although one must be careful that their industry allows such incentive deals. In some industries, incentives or kickbacks may be questionable at best, illegal at worse.

Price-Based Consumer Sales Promotions

The price-based consumer sales promotion is something everyone is familiar with. We see it on a daily basis in a variety of ways. The basic concept behind this sort of promotion is to draw the consumer in with lower prices. Hit them where in counts—in the wallet! By simply offering products to the consumer at a lower price, a manufacturer is increasing the likelihood that they will buy their goods. One way to do this is by supplying coupons. The coupons may come from the newspaper, direct by mail, in circulars, from websites, within packages of their goods, or printed on store receipts. The rebate offers we see are another method, where someone can send in their proof of purchase to receive a portion of the money spent in return. You might also see a price-based consumer promotion by offering bonus packs, where a larger quantity of products are offered for the same price as the traditional smaller quantities. One problem with these price-based consumer sales promotions is that consumers may become conditioned, buying goods only when they are on sale or a coupon is available (Solomon and Marshall, 2008).

Attention Getting Consumer Sales Promotions

There is no denying—especially in these trying financial times—that getting the consumer more for less is a definite way to draw attention. When we speak of attention getting promotional techniques, though, we are talking about selling products at the same amount as usual, but creating hype around a product. This might be done through the means of establishing a contest or sweepstakes. These might also include providing a premium item or value add to the product. This might include the prize in a box of cereal, free technical support for a specified time with purchase of an electronic gadget, or some such thing. There are cross-product promotional strategies where you might combine two similar but different brand products such as a Mag-lite flashlight along with Duracell batteries in the same package, or one having coupons included for the other. You might give away free samples of an item—a once common promotion was the free samples of food at the grocery store, although this has declined over the years. You might also have people at a table or go through a populated area dropping off free samples for the consumer. Sometimes, it is still sent out through the mail, such as a sample of new laundry detergent. Point of sale promotions is another way to try to grab the consumer’s attention. Auto repair centers often have a display set up to show the difference between shocks or brakes. Cosmetic counters often have sample make up to try and see which is best for you. Another way to grab the consumer’s attention is simply in where or how products are placed. Manufacturers pay premium pricing to have their products priced where they are most likely to be seen by shoppers. Many vendors and manufacturers set up huge displays to draw attention as well.

Conclusion

There are many ways that companies try to increase their market share by getting companies and consumers to buy more. We see these practices every day. In fact, if we did not see them, we would think something was seriously wrong. Marketing firms put in a lot of time and research to prove that these trade techniques work. By encouraging retailers to purchase more, manufacturers make money whether the products sell to the consumer or not. If those products do not sell to the consumer, however, the manufacturer would be hard pressed to encourage the retailer to continue purchasing their goods. The way the manufacturer is going to stay in business is to keep both the consumer and the retailer purchasing at a consistent rate. With a product that stays stagnant, has no promotions, it will flounder, never generating the added interest that will remind people that they are there.

References

Farrington, J. 2011. Top7Business.com. Retrieved on January 16, 2011 from http://top7business.com/?id=2512

Solomon, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real choices (5th ed.). Upper Saddle River, NJ: Pearson

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