Sales promotion can be defined as any activity that is used to stimulate sales of a product. It is a special promotion technique designed to encourage brand patronage. Sales promotion may be directed at customers in the form of consumer promotion or to middlemen as trade promotion. It usually lasts for a period of time.

 

Reasons for the Use of Sales Promotion

  1. To encourage slow-selling lines.
  2. To create dealers’ interest and encourage stocking.
  3. To encourage more frequent use of a product.
  4. To stimulate off peak period sales.
  5. To introduce a new product.
  6. To boost sales in a particular geographical area.
  7. To offset price competition.

 



Forms of Sales Promotion

1) Consumer Promotions: The following are examples of consumer promotions:

  • Free Sample Distribution: Manufacturers of products regularly give free goods bearing their logo to some of their customers to maintain goodwill and this is good for new products.
  • Special Price Sales: This is the process of reducing the price of a product’s regular package by stating the price reduction in the goods or by selling three products at the price of two.
  • Premium Offer: Manufacturers of products can offer a low value item as a bonus to purchasers of a particular product, e.g. a biro or tooth brush in a tooth paste.
  • Competitions: Customers can be invited to participate in contest, lotteries, raffles in which a fraction of them will win prizes, e.g. entry into a quiz competition advertised in a newspaper.
  • Trade Fairs: A firm may participate in a trade fair by displaying samples of the firm’s product and the literature about the product are given to the enquiring customers.

 

2) Trade Promotions: Examples include;

  • Free-Goods: An offer of a certain amount of a product can be made to the wholesalers or retailers on the condition that they purchase a specified quantity of the product.
  • Special Discounts: The manufacturer can offer special discounts to the middlemen by giving them cash reduction on the price of each quantity purchased. This will encourage bulk purchase.
  • Co-operative Advert: The cost of advertising a product placed by the middlemen in a local media, which features a manufacturer’s product can be borne by the producer.
  • Sales Competition for Sales Staff: Prizes are awarded to the distributors, retailers or salesmen to stimulate and motivate them to greater performance.

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