WHAT YOU NEED TO KNOW ABOUT SALES PROMOTION

 

Sales Promotion

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INTRODUCTION

Sales Promotion, element of the marketing process that can close the sale of goods or services to a potential customer by providing the incentive to make a positive purchase decision. Sales promotion, advertising, and salesmanship are the major techniques used in merchandising products to the public. Salesmanship often takes the form of a face-to-face encounter between the buyer and seller; the presentation is set up to convince customers that the product on sale is essential to their satisfaction. The lack of personal feedback between buyer and seller is sometimes considered a drawback of the advertising approach. Selling by telephone, although it is significantly less effective than personal selling, is still considered an important method of merchandising. In the 1980s, a growing promotional technique involved in-home shopping programs using cable television channels.

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HISTORY

The traveling salesman appeared late in the 19th century both in Europe and in the U.S. The early itinerant peddler carried his goods on his back or on his horse, working his way from a port city through the hinterlands. With the coming of the railroad and the assurance given to sellers by new credit-reporting systems, salespersons with their sample cases moved across the land. Persuasive skill was less important in those days of unsatisfied demand, and orders were readily forthcoming. By 1900, however, with the increasing supply of manufactured goods, buyers became more discriminating in their purchases. Greater attention was given to training the sales force and to providing buyer incentives. The growth of industrialization and urban living led to the development of merchandising as a major business endeavor. The use of sales promotion practices has experienced steady growth in the 20th century.

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PROMOTIONAL PRACTICES

The techniques of sales promotion are used both to motivate salespersons to improve their performance and to induce consumers to purchase goods and services. Although sales promotion works most closely with advertising, it is also related to other elements of marketing: production services, packaging, price, and distribution. At the manufacturing and wholesale levels of distribution, the methods used to motivate personnel to meet specific goals usually fall into two categories—sales incentive prizes (such as merchandise, travel, or cash awards) and sales contests. Both are based upon the salesperson reaching an objective above the normal sales quota.

Consumer promotions encompass a wide variety of techniques, including sampling of goods or services, store redeemable “money-off” coupons to encourage the trial of products, special price-reduced packages, mail-in premium merchandise offers, cash or coupon refunds by mail, special product packaging, contests, and sweepstakes. During recessionary periods, when the demand for consumer expendable dollars becomes more competitive, there is greater participation in refund, coupon, and premium offers. More than half the households in the U.S. take advantage of some sales promotion offers each year.

Sales promotion, now fully recognized as a vital element in the marketing mix, has become a multibillion dollar industry. In recent years, sales promotion expenditures have exceeded monies spent on advertising and there are strong indications that this pattern of growth will continue to maintain its economic edge.

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