Definition of Sales Promotion | Sales | Marketing Research

September 13, 2018 | Author: Anonymous | Category: Documents
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INTRODUCTION. Sales promotion is an important component of a small business's overall marketing strategy, along with adv...


INTRODUCTION Sales Sales promot promotion ion is an import important ant compon component ent of a small small busines business's s's overall overall market marketing ing strategy, along with advertising, public relations, and personal selling. The American Mark Market etin ing g Asso Associ ciat atio ion n (AMA (AMA)) defi define ness sale saless prom promot otio ion n as "med "media ia and and nonme nonmedi diaa market marketing ing pressu pressure re applie applied d for a predet predeterm ermine ined, d, limit limited ed period period of time time in order order to stimulate trial, increase consumer demand, or improve product quality." Compared to the other components of the marketing mix (advertising, publicity, and personal selling), sales promotion usually operates on a shorter time line, uses a more rational appeal, returns a tangible or real value, fosters an immediate sale, and contributes highly to  profitability.

DEFINITION OF SALES PROMOTION “Sales promotion includes incentive-offering and interest-creating activities which are generally short-term marketing events other than advertising, personal selling, publicity and direct marketing. The purpose p urpose of sales promotion is to stimulate, motivate and influence the purchase and other desired behavioral responses of the firm’s customers.”

Characteristics Characteristics of Sales Promotion Writing about sales promotion tools, Prof. Philip Kotler observes – “they have 3 distinctive characteristics.” Communication: They gain attention and usually provide information that may lead the customer to the product. Incentive: They incorporate some concession, inducement, or contribution that gives value to the consumer. Invitation: They include a distinct invitation to engage in the transaction now (offer valid till …or till stocks last)

List of product categories using sales promotion is ever-increasing, no matter what the  product category, it could be staples, impulse goods, emergency goods shopping goods, speciality goods, unsought goods, industrial products, or different types of services. Sales  promotion is now established as an important an d increasingly respectable element of the marketing communication tools. Sales promotion expenditures are increasing dramatically, and economic recession is most likely to fuel this trend further.

Advantages of Sales Promotion

1. Price discrimination Procucers can charge different prices to different consumers and trade segments depending on how sensitive each segment is to particular prices.Coupons, special sales events, clearance sales and discounts are examples to explain the phenomenon


2. Effect on consumer behaviour  As sales promotions are mostly announced for a short period, customers may feel a sense of urgency and stop comparing the alternatives. They are persuaded to act now rather  than later. For eg. With every 500g pack of Tang, you get a free Tang glass. Offer valid only till stocks last.

3. Effect on trade behaviour  Short-term promotions present an opportunity and encourage dealers to forward buy. This forward buying ensures that retailers won’t to go out of stocks. As dealers have more than the normal stocks, they think it advisable to advertise in local media, arranged displays and offer attractive promotion deals to consumers. These actions help in increasing the store traffic. Buy 2 dozen shampoo sachets & get 2 sachets free.

4. Regional Differences The South is generally characterised by greater degree of going out and people tend to drink outside the house. The Tamilian, consumer in particular, is value oriented, rational and looks up to film stars, while the Keralite is more international in his outlook. The Bangalorean is as Cosmopolitan as his Mumbai or Delhi counterpart. Such factors have to be taken into consideration while providing incentives to the customers.

Reasons for Growth of Sales Promotion 1. Increasing Competition 2. Customers have become More Price Sensitive

3. Sales Promotions generally create an Immediate Positive Impact On Sales 4. Products have become more standardized 5. Consumer Acceptance 6. Advertising has become more expensive and less effective 7 Trade has become more powerful 8. Emphasis on sales volumes 9. Sales Promotions maximise profits 10. Introducing an element of interest.

Research problem Sales promotion acts as a competitive weapon by providing an extra incentive for the target audience to purchase or support one brand over another. Customers are more selective in their buying choices and a good promotional activity is needed to reach them. The basic purpose of promotion is to disseminate information to the potential customers The problem under the study is the effectiveness of sales promotional activities that are used by the firm. If the organization keeps its sales promotional effectively it will be able to lead the path of success.

Topic of study To study the effectiveness of sales promotional activities by KSE in promoting sales of ready mix cattle feed.

Objectives of study ● To study the different methods of sales promotional activities used by KSE

● To find out whether the promotional activities are meeting its objectives. ● To study the response of customers and dealers upon the sales promotional efforts of KSE. Scope of study Can help to discover new methods to boost the sale of ready mixed cattle feed produced by KSE. Helps in understanding the problems of dealers and consumers and there by to serve them the best

RESEARCH METHODOLOGY Research is an investigation to discover new facts. Clifford woody defines research is as, “comprising of defining and redefining problems, formulating hypothesis or suggesting solutions, collecting, organizing and reaching conclusions.”

The American marketing association defines marketing research as, “The systematic gathering, recording and analyzing of data about problems relating to the marketing of  goods and services”.

It is a process of linking the consumer, customer and public to the marketer with necessary information related to the products or services of the marketer or its competitors.

The information obtained through marketing research can be utilized for forecasting to evaluate new products or services, ideas and to help managers in making better   promotions and advertisement decisions


“ A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in  procedure”. Research design is purely and simply the framework or plan for a study that the collection and analysis of data. The function of research design is to ensure that the required data are collected accurately and economically. There are two basis of research design names (1) Exploratory research method is used to collect data. This method, as the name implies as the one designed to describe something especially in user characteristics of product here the descriptive research method is used  because it describes the expectations, attitude, opinions and level of satisfaction among the consumers.

THE DATA The unprocessed information is called data.

1.NATURE There are two types of data through which information can be collected i.e.. primary data and secondary data. The data collected entirely depends on primary data through structured questionnaire . These are first hand views, opinions and expectations of  respondent.

2.SOURCES OF DATA The sources of data are mainly from the dealers and the consumers.

PRIMARY DATA Primary data are those data that are collected for the first time and that is original in nature. The primary data collected through questionnaire and interviews. Separate questionnaire for Dealers, consumers of K S E Cattle feeds are prepared.


Secondary data are those data which have been collected by some one else and passed through statistical process. Secondary data are like, 1. company profile 2. website 3. journals

3.RESEARCH INSTRUMENT For this study, structured questionnaire was used.

4. METHOD OF DATA COLLECTION The method of data collection used was structure questionnaire. A predetermined questionnaire was administered for the respondents.

SAMPLING METHOD Convenient sampling technique is used for daelers and consumers were is a *********sampling method.

SAMPLING SIZE The total sampling size is ************

Promotion In KSE the promotion is done in two ways 

Consumer promotion

This includes giving samples and free gifts. For this maximum awareness should be given. 

Dealers promotion

This includes giving gifts to distributors and dealers. Here the main achievement is less cost for advertisement.

Marketing Strategy of KSE Limited   Necessary publicity being provided for assistance. The company reduced its advertising expenditures and concentrates more o radio, wall paintings and hoardings. 

Seminars are conducted on relevant topics

Cost of operation kept to be minimum

Sales representatives will be provided for assistance

Supply quality products at reasonable prices using advanced production technique

Other Marketing Strategies •

Pricing strategies

Price is the value of the market offer to market expressed in monetary terms ,which the consumer is required to pay. It is the exchange value of product or service in terms of  money.price can decide the success or failure of a firm pricing of these types 

Cost oriented pricing policy

Demand oriented pricing policy Competition oriented pricing strategy

In KSE Ltd cost oriented pricing strategy is adopted. In this strategy, profit are added with the cost. The percentage is changed as and when needed. When the price is changed  by department, the price tags are printed and distributed among dealers to know change in price level. In KSE Ltd, different quality products are available at different selling  price. Farmers oriented policies are also adopted in KSE Ltd.

Distribution strategies

The distribution of KSE Ltd mainly involves private leaders and corporate milk societies. Dealers are offered a fixed commission on cattle feed price in order to ensure uniform  price throughout company. The company does not offer any quality based rebates. The company employed competent field sales person in different areas in order to ensure distribution of goods. The field sales representatives also analyses performance of dealers and retailers and suggest collective action if necessary. They also identify potential customers if dealers are to be uncovered.

Promotional activities

The objective of company is to provide high quality products at most affordable price to farmers. For this company requires raw materials at minimum possible price. Since the coconut cake availability is not sufficient for operation, the company imports coconut cake from Indonesia, Srilanka etc. The cost of operation is kept minimum through

advanced techniques. In order to ensure quality, all the materials from raw material to finished products are tested in advanced laboratories. The quality control is entrusted with chief nutritionists. Promotional activities are different from department to department. Dairy products are advertised in TV and in newspapers, magazines etc. Cattle feed is advertised in radio because farmers are main listeners of radio programs.


The Retail Organizing

The KSE Ltd is having more than 550 dealers and 22 shops selling cattle feed to its customers. These persons are key link between KSE Ltd and customers. Every year KSE Ltd selects the most successful dealers and awarded him. The following award schemes are implemented every year for dealers. 

First best seller

: cash worth Rs.10,000/- and 3 days trip to

Banglore 

Second best seller : cash worth Rs. 5,000/-

Third best seller

: cash worth Rs.3,000/-

4-10(7 prizes)

: Rs. 1,000/-

Further the dealers are given workshop training; cattle feed marketing, milk, marketing farm management.

Sample / free coupon scheme

This method is strong introduction tool adopted by KSE Limited at all time. A packet of  5kg cattle feed is distributed as sample along with 2 coupons for concession in purchase

 price. As majority of cattle growers are poor farmers, this scheme has become a small relief. This is an introductory as well as an enhancement tool in market.

Trade credit Schemes

It is an introductory technique. The customers supplied with bag for current use. The cost of this bag will be collected along with supply of replacement bag. This will help KSE Ltd to be in touch with customers. The KSE Ltd has discontinued this practice because of  technical reasons, but dealers are encouraged to continue this for common benefit.

Door delivery system

As majority of customers are farmers in rural area they prefer door delivery system. They  prefer order by phone and delivery within few hours at door. The KSE Ltd not involved in door delivery system directly, but insist that on dealer to do in all possible market areas. In Kerala this system is taken up by all dealers and sales increases accordingly.

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