Importance of Promotion. When one manufacturer increases his promotional spending and adopts an aggressive strategy in creating a brand image, others are also forced to follow the suit. Sales promotion activities are generally performed at certain times thus, these are not regular activities, like the display, fairs, and exhibitions, demonstration, seasonal discount, free gifts, etc. If one company cuts its sales promotions, it will suffer short-term loss, chances are that competitors will take advantage of that, the company increases its sales promotional expenditures short term increase of sales might be very small because competitor reacts. They have learnt overtime that brands with promo offers need not necessarily be of bad quality. Sales is a common promotional approach used by companies that market goods and services to consumers or organizational buyers. Although marketing is hugely important for a business to succeed, it can also be very expensive. The middleman wholesalers and retailers have induced the Purchase more stock by offering more facilities such as credit facilities, higher trade, and cash discount and free gifts, etc. Stimulate Trial Purchase. Show More. The advertisement helps the organisation to reach to their targeted customers in an effective manner and … As mentioned before, salespeople bridge the gap between customer needs and the product/service that fulfils that need. Sales promotion encourages dealers and distributors to sell the product more. The sales will increase as a result and with a successful promotion like this the business will get more return on … when a new product is introduced or there is a change of fashion or taste of consumers, existing stocks can be quickly disposed off; iv. Due to the prevalent market conditions, mass selling is quite Impossible without promotional activities. Everybody wants prime space, especially during new product introduction. What are the Disadvantages of Sales Promotion? / Marketing / The importance of motivation in a sales environment; The importance of motivation in a sales environment . The intense competition has necessitated the sales promotion activities. Sales Promotion: Definition, Purpose and Importance. It is an important promotional strategy to – Spread information about the brand to new customers or new market Stabilize sales volume and fulfil short-term sales goals As the term implies — the ultimate goal is sales or transactions. Thus, all marketing activities are undertaken to increase sales. eval(ez_write_tag([[580,400],'googlesir_com-medrectangle-3','ezslot_0',105,'0','0']));Related: Top 5 Important Determinants of Promotion Mix (Explained). Sales promotions are a great way to build year-over-year and month-over-month revenue growth. Very often it would be seen that one product is widely used in one sector and not … It can be specific tool of the marketing strategy of an enterprise. Remain competitive. Any successful business leader will testify to the fact that sales are the lifeblood of any organisation. Sales promotions often involve working with other organizations. Often, salespeople are dealing with already warmed up prospects who have an existing awareness of the company through marketing and advertising efforts, and it’s the job of the salesperson to close the deal by introducing further information and helping the customer make those connections. Increasing importance of sales promotions as a percentage of the total advertising and promotional budget and increasing at a rate of 12 percent per year over the last 10 years, studies that strive to understand the impact of sales promotions on consumers are very important. More and more promotional activities are required to induce the customers to purchase more and more products and Thus they produce the demand. Promotional activities increase the sales by changing the elasticity of demand of the product through various techniques, like, by distributing samples, free purchase, premiums, discounts, etc. Introduce a New Brand. Sales promotions are short-term incentives that are done to encourage the purchase or sale of a product or service [P.DALOK 200]. Related: 18 Reasons and the Importance of Product Innovation (Explained). Engender customer loyalty. Sales promotion does not include advertising, personal selling, and publicity. You have to stay ahead of your competitors in order for customers to keep doing business with you. Due to the adversity of markets, the importance of sales promotion has increased tremendously. Sales Promotion Specialists Are Available As a result of economic liberalization, the number of management institutions has increased. 15 Factors that Affecting Market Segmentation. In slack season, the promotional activities help in maintaining the sales of the product, Customers and middleman are offered attractive discounts and free gifts along with their products to induce the persons to purchase their products.eval(ez_write_tag([[300,250],'googlesir_com-box-4','ezslot_16',120,'0','0'])); One of the most objectives of the sales promotions is to keep the memory of the product alive in the minds of the present customers. Distance Between Producers and Consumers. So, in order to aid the retailers and also to ensure that share of shelf space, many manufacturers have taken to sales promotion activities. A reduced price or offer of a rebate may stimulate trial purchase. Sales promotional activities serve the following purposes: eval(ez_write_tag([[250,250],'googlesir_com-medrectangle-4','ezslot_2',101,'0','0']));eval(ez_write_tag([[250,250],'googlesir_com-medrectangle-4','ezslot_3',101,'0','1']));The producer generally provides information regarding the quality, uses, different uses of the products and the price, etc. Promotional activities increase the sales by changing the elasticity of demand of the product through various techniques. Sales promotions are short-term incentives that are done to encourage the purchase or sale of a product or service [P.DALOK 200]. It is essential for the survival of a manufacturer. The producers have spent much more amount on sales promotion than on advertisement. Some sales promotions are aimed at consumers. Importance of Sales Promotion. Business owners also count on sales promotions to: Sustain customers' interest. As an essential part of any promotional campaign they should be planned from the beginning. Sales promotion is an important component of a promotion campaigning programme. Most of the sales promotion devices (such as contests, premium, coupons, etc.) Consumer behaviour has changed drastically. Trigger of First Impressions – Often, customers’ first perception of a product is formed as soon as they learn the price . The business world today is a world of competition. There are several reasons explaining this phenomena: Increased brand parity and price sensitivity of consumer: With more brand choices available to the consumer and with the fact that product differences are becoming less and less apparent, consumers are becoming more and more reliant to the price and price incentives. On the basis of the meaning of sales promotion, the following are characteristics of sales promotion may be enumerated-, Related: 17 Importance and Role of Small-Scale Industries (Economy). have brought greater pressure on manufacturers for support and allowance. The producer generally provides information regarding the quality, uses, different uses of the products and the price, etc. Consumers are getting used to the fact that almost always at least one brand category is on sale or on a sales promotional offer. Sales promotion acts as a bridge between advertising and personal selling. However, the phenomenon of sales promotion is not studied vary widely. 15 Reasons for the Occurrence of Industrial Conflicts, How to Make a Successful Participative Management, 10 Basic Limitations of Workers Participation in Management. As the promotional activities cannot be performed without the help of an effective Salesforce and the specialists in the field, Basically, sales promotion policies supplement the efforts of personal and. Because of increasing level of competition and costs of advertisement, producers largely use this technique as a promotional tool. 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