SALES PROMOTION: The A-Z Guide

Sales Promotion definition, types, examples and tools
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For the longest time possible, there’s been some confusion between the terms, “sales promotion” and “advertising.” For tons of individuals, it was totally okay to use these terms interchangeably. Well if you were a perpetrator like me, you weren’t totally wrong. It turns out you just needed some pieces of information to set you on the right path. But besides that, I’m also guessing you need a little more information than the aforementioned. I’m talking about a detailed rundown of sales promotion tools, methods, examples, and so on. However, we will have to go through the conventional method of starting with a Sales promotion definition and its types.

Definition of Sales Promotion

Sales Promotion definition, types, examples and tools
Image Credit: EconomicTimes (Sales Promotion Definition)

Sales Promotion is a type of marketing aimed either at the consumer or at the distribution channels. It’s used to introduce new products, clear out inventories, attract traffic, and to lift sales temporarily.

Furthermore, it deals with the activities of awareness and advertising aimed at inciting customers into purchasing products. Some of these activities involve giveaway sample products, incentives, recreational contests, giving a premium on sales, etc.

Read Also: BUSINESS-TO-CONSUMER (B2C): Sales Models and Marketing Strategies

However, asides their definitions, sales promotion differs from advertising. This is because while advertising often employs the use of media platforms belonging to a business enterprise, sales promotion can take any media platforms belonging to either individuals or organizations. But, it imbibes non-recurring and non-routine methods to stimulate customers.

Let’s take a quick look at why sales promotion is needful.

Importance of Sale Promotion

The benefits from sales promotions are excessive, which makes it impossible to overlook its importance. Some of them are listed below;

#1. Attracting Attention

Sales promotion attracts the attention of prospective customers and feeds them with necessary information.

#2. Stabilization of Sales Volume

Sales promotion stabilizes sales volume, and even increases it too, provided customers have an assurance of the product quality. People switch brands when the promotion is done effectively.

#3. Product Differentiation

It differentiates a company’s product from other competing products of other firms.

#4. Incitation of Demand for New Products

Sales promotion creates awareness of new products and persuades people to purchase them.

#5. Synergy in Promotional Activities

It supports advising and personal selling efforts, adding to the overall effectiveness of promotional activities.

#6. Highlighting Utility of Product

People get to know how products can satisfy their needs through sales promotion.

Read Also: DAYS OF SALES OUTSTANDING- Everything You Need To Know

Objectives of sales promotion

Sales promotion is very crucial in the sense that it leads to awareness and escalate the sales of the product. However, with a definition in place, sales promotion activities are done to accomplish the following objectives:

  1. Attraction of new customers.
  2. Education on the use of the product
  3. To make customers buy at the point trade
  4. Publicly increase sales and disseminate information

Types of Sales Promotion

Sales Promotion definition, types, examples and tools
Image Credit: eduCBA (Sales Promotion Types)

There are two categories of Sales Promotion:

  1. Consumer’s Sales Promotion
  2. Dealer’s Sales Promotion

Looking at these two categories explicitly:

#1. Consumer’s Sales Promotion


This type of sales promotion is directed towards consumers to inform them about products and to attract new customers. Also, it’s used to compete with other products available to customers. There are attempts to bring products to the doorsteps of the consumers and retailers for them to make purchases.

Examples of Consumer’s Sales Promotion activities are:

Price-Off Promotions: This means offering products at lower prices than its normal market price or giving out more products at a lesser price. The issue with this is that it increases sales, but incurs a poor profit.

Coupons: A coupon is a certificate that specifies a reduction in the price of products to a customer. The certificate is distributed with the purchase of a product either on the package or inside of it. With the coupon, a customer has the encouragement to make another purchase.

Premiums: Marketers can offer incentives to stimulate product purchases. That is, customers get an extra article or service after purchasing a product. This draws customers to come to make a purchase knowing what they stand to get also.

Free Samples: on the other hand, marketers can offer a small number of products free to customers to persuade them to make purchases. The essence of this is to increase the sales volume of a product at its early stage of the life cycle.

Consumer Contest: Marketers engage customers in competitions on the ground of creativity. Through this contest, marketers create awareness of product brands and instigate customers’ interest in them.

#2. Dealers’ Sales Promotion


This type of sales Promotion focuses on dealers, distributors, retailers, and agents. They are channels of distribution. This is to make them keep large stock with them. The examples here include:

Trade Buying Allowance: This deals with temporary price reduction given to the retailer for purchasing some quantity of products. It guarantees short term profit and encourages retailers to repurchase.

Merchandise Allowance: This is some amount of money dealers receive for providing a satisfying sales promotion. They receive the allowance if they can provide proof of what they did.

Dealer Gift: Dealers receive gifts when they purchase some quantity of products and satisfy an assigned sales demand. Lastly, marketers use this method to promote new products to customers.
Premiums: Marketers use more incentives on dealers to encourage them into promoting more products in the market.

Read Also: WHY ADVERTISING WOULD KILL YOUR BUSINESS.

Sales Promotion Methods

 Some the most effective sales promotion methods include:

#1. Quantity Discount

The more quantity of the product you buy, the more the discount. For example, a soap may cost $1 but a combined package of 5 units will be sold at $4 thereby giving you a 20% discount.

#2. Trade Shows

This involves the maximum eyeballs grab of the retailers, dealers, or distributors. Meanwhile, exhibitions here are both for individual buyers and bulk sellers as well.

#3. Public Display of Product (Exhibition)

More commonly, this is used in food items, pieces of jewelry, some household electronics, clothing, phone sales, and other similar products. In this case, the sellers showcase their products to their buyers. However, a single company or group of companies can take care of this in one location.

#4. Exchange Offers

Exchange offers is the process by which new products are given out on the basis of the valuation of old products being returned to the company. You then receive a discount for it. It’s quite common across all countries, especially during the festive seasons.

#5. E-mail Marketing:

It entails the use of electronic mail messages to targeted individuals and organizations for adverts. In fact, it is mostly used in the online industry and this is seen as we access our mails regularly.

Sales Promotion Techniques

Below are some techniques you could try out as you scale through the world of sales promotion:

#1. Rebates

This is a marketing tactic that is employed when you have a deduction from the amount that is being paid. For example, you visit the cinema and bring your parking ticket to the showroom, this basically means you get a parking amount refund.

#2. Bundling

Bundling is the combination of products on sale for the same price as one unit. This is a major technique in the cosmetic space. For example, in soap companies, customers are given two or three soaps at the price of one soap.

#3. Sampling

Quite a number of companies across the globe practice this technique. In sampling, you display your products for people to see, and consequently, they introduce them to the market. And by so doing, you literally incite the target customers to buy the product.

Sales Promotion Tools

Image Credit: ISPGestion (Sales Promotion Tools)

When it comes to sales promotion tools, there are tons of them at your disposal and listed below are the most popular.

#1. Coupons

A coupon is a certificate that fetches buyers a saving when they purchase a specified product. Coupons are generally issued along with the product. They entitle the holder to either a specified saving on a product or a cash refund.

#2. Demonstration

The demonstration is a sales promotion tool required when products are complex and of a technical nature. Customers are educated as to how to properly use the product. Demonstration of products induces customers to buy. They are also free of cost.

#3. Consumer Sweepstakes

A sweepstake calls for consumers to submit their names for a draw. Names of consumers are included in a list of prize-winning contests. After the lots are drawn, winners get prizes.

#4. Price off offer

Goods are sold at reduced prices during slump season. Reduction in prices stimulates the sale of goods.

#5. Premium

Premium refers to goods offered either free or at low cost as an incentive to buy a product. A premium may be inside the package, outside it, or received through mail. Also, the reusable package itself serves as a premium.

Premium is generally offered for consumer goods such as soap, toothpaste, etc.

Sales Promotion Examples

The examples of sales promotion cover both online and offline options.

For online options, social media platforms are usually the most attention. Sellers use these platforms for contests and giveaways. Also, some share free gifts as they move around to advertise or put free gifts inside the packets of the products just like toothpaste.

“Buy one, get one free” is another example of sales promotion (for offline options). Basically, in this scenario, you are given exactly the same product you bought. Nevertheless, some companies, like drink and beverage companies engage in product campaigns. They give incentives like shirts, caps, umbrellas, etc. as you purchase their products.

Other Benefits From Sales Promotion

  1. Sales promotion serves as a supplement to advertising and also as personal selling.
  2. It maximizes sales of both new products and slow-moving products in the market.
  3. It stabilizes the fluctuating sales pattern.
  4. However, it attracts channel members to participate in production promotion efforts.
  5. It encourages customers to make a bulk purchase of products on promotion.
  6. It solves the problem of seasonal fluctuation of products.
  7. This also influences retailers on their own, to promote products by one-on-one advertising.
  8. Moreover, it reduces the perception of risk associated with the purchase of products.

Conclusion

With detailed information on Sale promotion tools, examples, and definitions in place, trying to find your feet using the techniques above shouldn’t be a bother

In any case, if you need a doubt cleared, drop by on the comment section.

FAQ

What are the 5 promotional strategies?

The Promotion Mix

There are five (sometimes six) main aspects of a promotional mix: Advertising, Personal selling, Sales promotion, Public relations, and Direct marketing.

What promotion means?

Definition: Promotions refer to the entire set of activities, which communicate the product, brand, or service to the user. The idea is to make people aware, attract and induce to buy the product, in preference over others. … Sales promotion is a part of the overall promotion effort.

How do promotions work?

A job promotion is when an employer moves an employee up to the hierarchical levels within an organization. A promotion typically allows an employee to progress to a higher position, a higher level of responsibility,, and higher levels of authority within the organization.

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