Sales promotion

Sales promotion is the promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities (such things as displays, shows and exhibitions, and contests).

Those free samples of products that people get in the mail; the cents-off coupons that they clip out of the newspapers; the contests that various retail stores sponsor; the catalogs you look through; and those rebates that have been so popular in recent years all are examples of sales promotion activities. Sales promotion programs supplement personal selling, advertising, and public relations efforts by creating enthusiasm for the overall promotional program. In 1988, marketers sent out some 12 billion catalogs, or roughly 50 for every man, woman, and child in the United States. You can see, therefore, how big and important sales promotion is.

Sales promotion can be both internal (within the company) and external (outside the company). It is just as important to get employees enthusiastic about a sale as it is potential customers. Often, the most important internal sales promotion efforts are directed at salespeople and other customer-contact persons such as complaint handlers and clerks. Sales promotion tries to keep the salespeople enthusiastic about the company through sales training; the development of sales aids such as Flip charts, portable audiovisual displays, and movies; and participation in trade shows where salespeople can get leads. Other employees who deal with the public may also be given special training to make them more aware of company programs and a more integral part of the total promotional effort. After enthusiasm is generated internally, it is important to get distributors and dealers involved so that they, too, are enthusiastic and will cooperate by putting up signs and helping to promote the product.

After the company’s employees and salespeople have been motivated with sales promotion efforts, and middlemen are involved, the next step is to promote to final consumers using samples, coupons, cents-off deals, displays, store demonstrators, premiums, and other incentives such as contests, trading stamps, and rebates. Sales promotion is an ongoing effort to maintain enthusiasm, so different strategies are used over time to keep the ideas fresh.

When thinking about a sales promotion scheme for Fiberrific, we might learn from General Food’s promotion of Super Golden Crisp, Honeycomb, Fruity Pebbles, and other children's cereal. They sent a “fun book” to children featuring Sugar Bear. Cents-off coupons were placed in the book for the parents. Sales went up 80 percent. Some 90 percent of the households replying wanted more mailings. Wouldn't you feel more comfortable promoting our high-fiber, low-sugar cereal to children rather than the high-sugar content cereals promoted by General Foods? Don’t firms have some social responsibility in the area of nutrition? You wouldn’t believe the number of coupons sent out by marketers such as General Foods. Recently the number of coupons reached over 215 billion! "Advertising Age" reports that sales promotion is a hot area of marketing and is getting hotter.

One relatively unexplored area in promotion is specialty advertising. Specialty advertising involves the use of specially designed products such as pens, calendars, business cards, balloons, and hundreds of other items to promote a business or a product. One of the authors of this text has used several specialty items to promote his books, including pens with the book’s name on them and balloons.

One year a book fair was enlivened by "jumping nickels" that explained why everyone was jumping into Nickels’ book rather than the competition’s. Jumping nickels ended up in people's drinks and other strange places. They caused much word of mouth for the book. The clever use of tennis ball cans, T-shirts, microwavable popcorn bags, and other items can make any other promotion come alive.

Exercise 14. Answer the questions.

1. What is the main objective of sales promotion?

2. Is external sales promotion more important than internal?

3. How does a company keep its employees enthusiastic about sales?

4. Why is it important to involve distributors and dealers into sales promotion activities?

5. What strategies are used to get customers interested in purchasing a product?

6. What is specialty advertising?

Exercise 15. According to the text are the following statements true or false?

1. Sales promotion employs different short-term activities to stimulate consumer purchasing and dealer interest.

2. Sales promotion is a special type of advertising through sending catalogs to consumers.

3. External sales promotion is directed at distributors and dealers that will help to promote products.

4. Cents-off coupons, premiums, trading stamps and rebates help to increase sales.

5. Specialty advertising is designed to promote specialty goods and services.

Exercise 16. Find in the text the English equivalents of the phrases.

Короткострокова діяльність; безкоштовний зразок товару; купон на отримання знижки; повернення переплати (за товари чи послуги); програма рекламно-пропагандистської діяльності; внутрішнє/зовнішнє стимулювання збуту; торгові агенти; співробітники, які розглядають скарги; розробка демонстраційних та рекламних матеріалів; промислова виставка; винагорода; паперові марки з визначеною сумою (дають право безкоштовного отримання товару в магазині, де були отримані ці марки); товари спеціального асортименту.

Exercise 17. Give Ukrainian equivalents to the words and phrases.

Consumer purchasing, salespeople, complaint holders, flip charts, portable audiovisual displays, trade shows and exhibitions, contests, final consumers, cents-off deals, store demonstrators, incentives, trading stamps, rebates, households, specialty advertising.

Exercise 18. Find words in the text to define people who do the following:

a) sell a company’s goods to businesses, homes, etc.;

b) are taken or appointed as paid workers;

c) deal with customers’ complaints;

d) are involved in a given type of business;

e) buy and use goods and services;

f) sell a product;

g) supply goods in a particular area, esp. to shops.

Exercise 19. Rewrite the sentences below, replacing the underlined words and phrases with the following words from the text: enthusiasm, rebates, potential, complaint, incentive, motivate.

1. The customer was not satisfied with the work of the TV-set he bought, so he sent a statement expressing his annoyance to the producer.

2. The Coca-Cola company tried to generate a strong feeling of interest about its product sales offering dealers one free case of drink for every dozen cases they purchased.

3. Many large companies try to provide their employees with a strong reason to be interested in sales promotion through sales training.

4. Procter & Gamble often organize distribution of free samples to attract possible customers.

5. Return of part of a payment has become popular in recent years as an encouragement for the customers to buy more products.

Exercise 20. Complete the sentences with the words from the text.

1. To buy products cheeper customers can use _____ they clip out of newspapers and catalogs.

2. Marketers employ different _____ strategies to create interest and enthusiasm of _____ and final consumers.

3. Retail stores use a lot of _______ to attract more customers, for example, they _____ various contests.

4. The use of specially designed products ____ a business or a product is called_____.

5. Internal sales promotion motivates _____ through participation in _____ where they can get leads.

Exercise 21. Translate the sentences into English.

1. Програма рекламно-пропагандистської діяльності будь-якої великої компанії передбачає стимулювання збуту товарів.

2. Внутрішнє стимулювання збуту зорієнтоване на торгових агентів та інших співробітників компанії з метою підтримки їх зацікавленості в збуті продукції.

3. Внутрішнє стимулювання збуту спрямоване на оптові фірми та посередників, щоб залучити їх до просунення товару.

4. Щоб принадити споживачів у магазини та збільшити обсяг продажу, торговці використовують різноманітні винагороди та знижки, а також організовують демонстрацію товарів, виставки та змагання.

5. Купони на отримання знижки можна вирізати з газет, каталогів і навіть дитячих книжок, які компанії розсилають споживачам.

Exercise 22. Read about the services offered by some libraries and colleges in the USA.

One branch of the Chicago Public Library lends expensive power tools and such accessories as fiberglass extension ladders. At the Carnegie library, in Pittsburgh, volunteer psychologists go to the library, listen to people's troubles, and refer them to appropriate help. The Broome High School Media Center in Spartanburg, South Carolina, lends prom, wedding, and mother-of-the-bride dresses donated by members of the community.

Answer the questions.

A. What is the product of a library?

B. What prompted libraries to be so creative in their product offers?

C. Is this a good example to find a need and fill it?

D. What is the product of a college or university?

E. How did American colleges manage to diversify their product offer?

Exercise 22. Working in pairs do the following tasks.

1. Promoters spend more money on sales promotion than advertising. Study the list of sales promotional techniques. Comment on if you are familiar with the activities involved in sales promotion at least as consumers: displays (store displays); rebates (refunds from producers); contests ("You may have won $1 million"); lotteries; audiovisual aids; samples (toothpaste, soap); catalogs; coupons (10 c off); demonstrations; premiums (free glass when you buy a meal); special events; exhibits; shows (fashion shows); portfolios for salespersons; deals (price reductions); trading stamps; trade shows; conventions; bonuses (buy one, get one free); sweepstakes; incentives (the gift in a Cracker Jack box).

2. An article in "Marketing News" reported that spending on sales promotion is over $100 billion a year. In the USA spending on sales promotion activities in recent years has been about $40 billion more than advertising. Read about the results of the survey on where sales promotion dollars were spent and discuss the questions below: meetings and conventions (dollars spent – 31%), direct mail (16%), premiums and incentives (e.g., rebates) (14%), point-of-purchase displays (12%), audiovisuals and miscellaneous (8%), promotional ad space (8%), exhibits and trade shows (6%), couponing (4%). Coupons were highly accepted. When asked about their reactions to sales promotion efforts, 8 % of 7,554 households polled felt coupons increased the value of shopping dollars. Some 50 % of respondents felt rebates gave the best value. Many felt that sweepstakes, contests, and mail-in efforts were not worth the trouble. About 40 % found sweepstakes and contests "too much to deal with".

Much time, effort, and expense is spent evaluating advertising effectiveness. Not nearly as much effort is placed on evaluating sales promotion efforts, even though more money is spent on these promotions than advertising.

3. Answer the questions.

A. Meetings, conventions, exhibits, and trade shows take up some 37% of sales promotion dollars. What do you think of the effectiveness of such activities? Do you see any signs of wasteful spending at such events?

B. Point-of-purchase displays are an important sales promotion tool. Think about the displays you have seen. Which are most effective and why?

C. What is your reaction to coupons, rebates, sweepstakes and contests? Are your reactions similar to those in the survey? What would you recommend to producers given those reactions?

4. Comment on the following statement by Theodore Levitt: "The marketing view demands the active recognition of a new kind of competition. This is not competition between what companies produce in their factories, but between what they add to their factory output in the form of packaging, services, advertising, customer advice, financing, delivery arrangements, warehousing, and other things people value".