According to the Institute of Sales Promotion, sales promotion refers to a range of marketing tactical techniques designed within a strategic marketing framework to add value to a product or service in order to achieve specific sales and marketing objectives. In simpler terms therefore, sales promotion refers to marketing communications other than personal selling, advertising and PR.
Like other forms of sales and marketing campaigns, Sales promotions activities do come with additional costs to the business. It is therefore advisable that such initiatives should be adopted by well established business enterprises only. Research has shown that the tremendous increase in expenditure on sales promotion relative to advertising over the last decade can be accounted partially by its efficacy. Certain forms of sales promotions such as incentive schemes and exhibitions lend themselves to cost-benefit analysis to a greater extent than advertising. For instance, the sales effect of a precise markdown and the number of redemptions in prize incentives can be calculated with a high degree of accuracy as can the amount of orders taken in a particular exhibition.
Most companies dealing in consumer goods and services run fully established sales promotion departments or sub-departments which are often subjected to procedural audit just like the other elements of the marketing mix. The sales promotion audit should cover at least the following items:
· The effectiveness of sales promotion activities in total
· A review of the extent to which various types of sales promotions are used relative to competitors
· Costs of the various types of sales promotions employed, together with trends
· Results of individual sales promotions against objectives set
The benefits of sales promotion can therefore be seen in terms of the way in which it helps to maintain a high level of awareness of the supplier and of the brand in several ways that include: packaging impact at the point of sale; other point-of-sale display materials; strategic positioning in retail outlets; special offers and other incentives; advantageous exhibitions; and use of sponsorship.
It is therefore evident that apart from maintaining patronage of customers, sales promotions build the goodwill of dealers, and distributors who enjoy increases in store traffic and rates of stock turn. Sales promotion further encourages the trial and repeat purchases of goods and services.
However, it is important to note that while sales incentives such as price markdowns are used to boost sales of a product line, it should be remembered that the majority of the boost can only be temporary. Buyers may switch loyalties only for the period of promotional offer and then revert back to their normal brand purchases. The real challenge of a good promotion is to convert some of the brand switchers to loyal repeat purchasers of a brand.
