Sales Promotion
Sales promotions are the set of marketing activities undertaken to boost sales of the product or service. Sales promotion is designed to be used as a short-term tactic to boost sales – it is not really designed to build long-term customer loyalty. Sales promotion includes several communications activities that attempt to provide added value or incentives to consumers, wholesalers, retailers, or other organizational customers to stimulate immediate sales. These efforts can attempt to stimulate product interest, trial, or purchase.
Intermediaries-oriented Sales Promotion:
Trade-oriented sales promotion programs are directed at the dealer network of the company to motivate them to the sell more of the company’s brand than other brands. It is also known as push strategy, which is directed at the dealer network so that they push the brand to the consumers by giving priority over other competitor brands. Some of the important trade-oriented promotion tools are as follows:
1. Buy back allowances:
Sometimes the firms offer cash discounts or straight cash payments to the intermediaries to encourage volume sales, product display, or in support of a price reduction to customers.
2. Merchandise Allowances:
Some firms provide extra quantity to the wholesalers or retailers at regular prices to encourage them to boost the sales to the customers.
3. Stock return:
Some firms take back partly or wholly the unsold stocks lying with the retailers, and distribute it to other dealers, where there is a demand for such stocks.
4. Credit terms:
Special credit terms may provide to encourage bulk orders from retailers or dealers.
5. Dealer conferences:
A firm may organize dealer conferences. The dealers may be given information of the company’s performance, future plans, and so on. The dealers can also provide valuable suggestions to the company at such conferences.
6. Dealer trophies:
Some firms may institute a special trophy to the highest-performing dealer in a particular period of time. Along with the trophy, the dealer may get a special gift such as a sponsored tour within or outside the country.
7. Push incentives:
It is a special incentive given to the dealer in the form of cash or in kind to push and promote the sale of a product, especially a newly launched product.
8. Cooperative advertising:
Some business firms also bear the certain advertising expenses of the dealers, wholesalers, or retailers to encourage them to sells more and more.