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Basics of Marketing - Kotler Philip

Sales promotion

Advertising activities are complemented by the efforts of other means that are part of the marketing mix, namely sales promotion and propaganda.

Stimulation of sales - the use of a variety of incentive measures designed to accelerate and / or strengthen the market's response.

These include the stimulation of consumers (distribution of samples, coupons, offers for refunds, packages sold at a reduced price, bonuses, competitions, coupons, demonstrations), stimulation of the trade (credits for purchase, provision of goods for free, credits to dealers for inclusion of goods In the nomenclature, conducting joint advertising, issuing premium pushers, holding trade contests of dealers) and stimulating its own sales staff (premiums, competitions, conferences of sellers).

Most of the organizations resort to sales promotion tools, including manufacturers, distributors, retailers, trade and industry associations and non-profit institutions. As an example of non-profit enterprises, one can refer to churches that organize clubs for bingo, conduct theater nights, arrange subscription lunches and clothing lotteries.

In recent years, the volume of activities to promote sales has increased dramatically. From 1969 to 1976 spending on sales promotion grew by 9.4% annually against 5.4% for advertising. In 1976, the cost of sales promotion exceeded $ 30 billion.13

A number of factors contributed to the rapid growth of sales promotion activities, especially in the consumer markets. Here are some of them. 1. Today, top management is more willing to accept incentives as one of the effective marketing tools. 2. An increasing number of managers in goods acquire the ability to use means of stimulating sales. 3. Managers of goods have a constantly increasing pressure, demanding sales growth. 4. An increasing number of competitors are beginning to engage in activities to promote sales. 5. The mediators demand ever greater concessions from the producers. 6. The effectiveness of advertising is reduced due to rising costs, advertising bottlenecks in the means of dissemination of information and legislative restrictions.

The means of stimulating sales can be divided into contributing and not conducive to the creation of an advertiser's "consumer privileges". Means that promote the formation of privileges in the eyes of consumers usually accompany the trade appeal with a preferential transaction, as is the case with the distribution of free samples, coupons with trade messages printed on them, and premiums directly related to the goods. Among the sales promotion tools that do not create privileges in the eyes of consumers are packages sold at a reduced price, premiums to consumers not directly related to the product, contests and lotteries, offers of money back to consumers and discounts to retailers. The use of funds that promote the formation of privileges in the eyes of consumers, helps to strengthen awareness of the branded product and understanding its essence.

Stimulation of sales is most effective when used in conjunction with advertising. In one of the studies it was found that the exposures at the points of sale, tied to the current TV advertising of the company, provided a 15% excess of sales volume in comparison with similar exposures not related to TV advertising conducted in parallel. According to another study, the intensive distribution of samples, coupled with television advertising in bringing products to the market, was more successful than one TV commercial or TV commercials, accompanied by the spread of coupons16.

Deciding to resort to sales promotion, the firm should determine its objectives, select the necessary incentive funds, develop an appropriate program, organize its preliminary testing and implementation, monitor its progress and evaluate the results achieved.