It is the use of short-term incentives to purchase, such as free offers, sampling and selling, competitions. Often there are two types of strategies used in the sales promotion and they are aggressive and defensive. Defensive sales promotion is used to defend the brand against a competitive attack by a new product and aggressive promotion would be attempting to gain sales and market share. It is targeted at purchasers of rival brands.

The main purposes of sales promotion are:

¤ To create initial surge of demand to persuade shops to stock a newly launched product.

¤ To attract new buyers who the firm hopes will become regular customers.

¤ To lock customers in to buying your product when under threat from a new competitor.

Marketing is a communication process. Marketing specialists have to gather information about heir target market so that they know their potential customers better than any one else. To adopt the product or service offered, potential customers would need to be told of its existence, and how it will satisfy their needs. This can be achieved by using a mix of five different promotion methods.

(1) Advertising: It is paid for communication through media such as television, newspapers or radio. Most advertising can be categorized as either informative or persuasive.

(2) Publicity: Any event that can be turned into an interesting piece of news for a newspaper, magazine, television channel or radio station can produce publicity for a business. The publishing of the news item is free, but the cost of creating the event or preparing the press release can be high.

(3) Direct mailing: It is sent through the post. Every month each British household receives on average six and a half direct mails. By using direct mail an organization may establish a direct relationship with its customers. The advertiser supplies promotional literature to encourage a sale and then tries to cater for the customers' perceived needs. If it is addressed to the recipient it is known as mail shot and if it is unaddressed it is known as mail drop.

(4) Sales promotion: It is the use of short-term incentives to purchase, such as free offers, sampling and selling, competitions, point of sales displays, leaflets and sponsorship.

(5) Personal selling: Personal selling involves persuasive communication between a seller and a buyer, which is designed to convince the consumer to purchase the products or services on offer. It involves matching a consumer's needs with the goods and services on offer. It is a two way process of communication which allows an organization to obtain information about its customers.

The promotional mix comprises all the marketing and promotional communication methods used to achieve the promotional objectives of the marketing mix. These can be broken down into two distinct areas, controllable and non-controllable.

Non-controllable communication: It consist marketing messages which take place on the basis of word of mouth, personal recommendation and consumers' overall perception of a particular product or service. A brand heritage, character, colour and image will also have helped to create brand loyalty and influenced regular purchasing patterns. For example Rolls Royce brand is frequently applied to organizations, which build up a strong reputation for their goods and services. On the other hand, public displeasure with a particular origination may adversely influence its fortune.

Controllable communication: It consists of marketing messages, which are carefully designed and directed to achieve the objectives of an origination's promotional campaign. There are four main areas.

# Advertisements are messages sent via the media which are intended to inform or influence the people who receive them.

# Sales promotion are techniques designed to increase sales, such as money-off coupons, free samples and competitions.

# Personal selling involves the making of sales and emphasizes the importance of salesmanship.

# Publicity is a non-personal communication using the media but, unlike advertising it is not quantified with the success of a particular product. Its key component is public relations.

In planning any piece of promotional communication, the marketing specialist should first answer the question: 'Who is the message aimed at- who are the target audience?' Until this is clear, it is not possible to decide:

# The meaning that has to be communicated

# The level of language, signs or symbols to be used

# How the message might be delivered to the target audience

# When the audience will be available to receive the message

# Who should deliver the particular message to that audience

The objectives of promotional mix:

(1) To make consumers aware or increase awareness of a product.

(2) To reach a target audience which might be geographically dispersed

(3) To remind customers about the product. This can encourage existing customers to re-purchase the product and may attract new customers.

(4) To show a product is better than that of a competitor. This may encourage consumers to switch purchases from another product.

(5) To develop or improve the image of a business rather than a product. Much corporate advertising is carried out with this in mind.

(6) To reassure consumers after the product has been purchased. This builds up confidence in the product and may encourage more to be bought at later stage.

(7) To support an existing product. Such promotions may be used to remind consumers that a reliable and well thought of product is still available.

Factors affecting the promotional mix:

(1) The nature of the product: Simple and inexpensive products have little personal selling involved. On the other hand expensive and complex product (Machinery) requires two-way communication where advertising plays little or no role. Products, which exist in between, require both advertising and personal selling.

(2) The nature of the product and its customers: Advertising plays a greater role in the consumer market rather than industrial market. On the other hand advertising for capital goods differ in style, content and delivery.

(3) The product life cycle: The level of sales promotion depends on the stage the product is at in its life cycle. For example sales is widely used for products at the launch stage or when the life of a product has been extended. When a product is at it is mature phase advertising or other techniques of sales promotions are less useful.

(4) Relative costs and the availability of funds: Business firms would prefer most effective in terms of achieving the firm's objectives but it has to be least expensive promotional mix.

· Advertisements should contain nothing that is in breach of the law.

· No advertisement should contain any matter that is likely to cause offence.

· No advertisement should seek to take improper advantage of any characteristic that may make consumers vulnerable.

· No advertisement, whether by inaccuracy, ambiguity, exaggeration, omission or otherwise, should mislead consumers.

· No advertisement should play on fear or excite distress.

· Advertisements should neither condone nor incite to violence or anti social behavior.

· Advertisements should contain nothing that is likely to result in harm to children or exploit their credulity, lack of experience or sense of loyalty.

· Advertisers should not seek to discredit the products of competitors.

· No advertisement should so closely resemble another advertisement as to be likely to mislead or confuse.

The British Code of Advertising Practice, Committee of Advertising Practice

During the time of launch a new product advertising expenditure usually is very high. On the other hand at this stage advertising will concentrate more on the product rather than its brand. As the product moves towards growth and mature stages the advertising will be persuasive in nature, which will pursue customers to purchase the product by providing its various merits. Advertising is essential to maintain market share when the product is at its saturation stage. Products, which are matured and face constant competition from substitute or new goods, need to remind consumers of the product on the regular basis. Advertising at this stage of the product is known as 'reminder oriented'. On the other hand if a product's life has to be extended advertising activity has to be increased.

Sales Promotion

It is a method of developing the product image and to enhance the promotional activities undertaken by distributors. It reinforces advertising and encourages consumers to try the product. It includes all types of promotions except advertising and personal selling.

There are a variety of sales promotions that a business can use.

(1) Coupons, refunds and reward cards: These involve either refunding money to the customers or allowing savings to be made on repeat purchases. The boots loyalty card, launched in 1997, had 8.7 million holders by mid 1998.

(2) Competitions: Prizes are sometimes offered for competitions. To enter, consumers must first buy the product. Tabloid newspapers often use this type of promotion. They try to attract customers through large cash prizes in their 'bingo' competitions.

(3) Product endorsements: These are widely used by sports goods manufacturers. Sports personalities and teams are paid to wear or use particular products. In 1998 Nike were lining up Ronaldo, Michael Jordan against Tim Henman, David Beckham for Adidas.

(4) Product placing: This is a recent innovation. It involves a firm paying for product brands to be placed on the sets of films and TV programmes. Car manufacturers are often eager to see their vehicles driven by Hollywood stars in popular movies. This Business Studies II synopsis comes to you from msj@bol-online.com, msj@agni.com

(5) Free offers: A free gift may be given with the product. An example of this is the music magazine, Q, which regularly offers its readers free CDs of featured artists.

(6) Special credit terms: It includes offers such as interest free credit and 'buy now pay later' schemes.

Uses of Sales Promotion

(a) It introduces a product into a new market or introduces a new product into an existing market. This can also be used as a means of extending the product life cycle.

(b)They are a means of encouraging consumers to sample a good or service, which they might not have bought otherwise. Once the initial good has been purchased it is likely that further goods will be bought.

(c) Customers feel rewarded for their custom. They may, as a result, develop a loyalty to a particular product or business.

(d) Customers identify products or businesses with things that they like or are attracted to.A customer is therefore more likely to purchase a product.

(e) Sales promotions provide businesses with feedback on the impact of their marketing expenditure, for example, through the number of coupons returned or the amount spent on loyalty cards.

Conclusion: Sales promotions are not without problems. The free flight offer of Hoover in 1992 is one example. It offered two free flights to the US with the purchase of products worth over £200. The company misjudged the number of people taking advantage of the offer. This meant extreme pressure on the company to produce the goods the consumers were demanding. Also many consumers did not receive the holidays on dates or at times they wished. By 1993 there were so many complaints that Maytag, Hoover's US parent company. had to intervene to make sure flights or compensation were provided. It was estimated that the cost of dealing with these problems was £21.1 million.

Personal selling occurs when a company's sales team promotes a product through personal contact. This can be done over telephone, by setting up meetings, in retail outlets, or by 'knocking on doors'. In general, the more highly priced, technically complex or individual the product, the greater the need for personal selling. Most firms supplying industrial markets rely upon personal selling in the form of sales representatives.

Personal selling involves persuasive communication between a seller and a buyer, which is designed to convince the consumer to purchase the products or services on offer. It involves matching a consumer's needs with the goods and services on offer. The better the match the more lasting relationship between the seller and the buyer.

It is the most expensive ingredients of the promotional mix.

Personal selling is a two way process of personal communication. The sequence of events personal selling creates is known as the five Ps. They are preparation, prospecting, pre-approach, presentation, and post sales support.

(1) Preparation : Sales staff should be adequately trained and familiar with the product, customers, competition and the market.

(2) Prospecting : This involves identifying customers or prospects before selling takes place.

(3) Pre-approach : It is important to learn about the projected customer before the approach.

(4) Presentation : this involves active selling skills.

(5) Post-sale support : Following up sales helps to create repeat business.

ADVANTAGES :

· Customers can be given individual attention.

· With personal selling the individual consumer's needs can be dealt with and the product shaped to meet these needs.

PURPOSES OF PERSONAL SELLING :

· Creating awareness of and interest in a product.

· Explaining the functions and technical aspects of a product.

· Obtaining order and making deliveries

· Encouraging product trails and test marketing

· Providing detailed and rapid feed back from the consumer to the producer.

DISADVANTAGES :

· It can be expensive. The cost of maintaining a team of sales representatives can be very high.

· Another problem is the dislike of 'callers' by consumers.