What are the major decisions in Sales Promotion?

Sales Promotion decisions follow the framework set for the steps decided on promotion activities as part of market planning. (Kindly see chapter – Promotion Mix – Marketing Communications;Discuss the steps involved in Promotion Decisions?).

All the Sales Promotion activities are guided by the marketing plan like any other Promotion activity. The market plan decides on the target market and objectives. A decision is taken on which of these objectives are achievable through sales promotion activities.

Below are the decisions taken for sales promotion activities –
Determining sales promotion objectives – The objectives laid down for promotion activities during promotion mix decisions, guide the objectives for sales promotion activities. The target audience behaviour as well as other external factors helps the marketers in finalising the objectives. These objectives can be any of these –

– Reward existing customers,
– Increase repurchase of the product by occasional buyers,
– Attract customers who are often looking for value from products and are not brand loyal,
– Generate a short term demand for the product in the target market,
– Luring buyers away from competitors,
– Encourage them to switch brands.

For retailers and other middlemen these objectives can be –
– Encourage off-season buying,
– Encourage stocking of company’s products,
– Discourage competitor’s stocking and display of products,
– Gain entry into new retail stores.

Similarly for the sales force, the objective is to encourage them to put in extra efforts by way of rewarding them to generate sales, gain new customers and drive sales in off season.

Selecting the right promotion tools – These are decided basis the objectives set, competition, sales promotion tools availability, and its feasibility and cost effectiveness. Once the audience is decided, the marketer selects the right tool to target the audience either through in-store activities or directly reaching out to them. The in-store sales promotion includes displays, demonstrations, free sample with another product, etc. The audience is also reached directly through sales promotion letters, coupons, mail, demos at home or business, etc. Trade shows and exhibitions are targeted towards middlemen as well as consumers. These tools have been discussed in detail above.

The marketer must choose the most advantageous sales promotion tool according to the audience targeted.

Sales promotion budget for the sales promotion program – The marketer cannot rely on one tool to achieve its objectives. They need to blend the various sales promotion tools at their disposal to their advantage. The cost effectiveness and reach of each tool is considered and the list of the sales promotion tools is finalised. This activity considers the costs involved. For example, giving free gifts, coupons, prizes have the incentive cost apart from the administrative cost. Incentive cost is the value (free sample, discount, etc.) being delivered to the buyer to encourage buying. The activity decides on the total sales promotion budget.

Evaluation and control – Pre-testing is a research carried out to study the reaction of the target audience on a small scale before the full implementation to the entire target audience. Post-testing is done during as well as after the implementation of the sales promotion program in the target market. It is at the organisations discretion on how much importance they give to sales promotion activities in relation to other promotion tools like advertising, personal selling, direct marketing, etc. The analysis is basis the results achieved. For example, how many coupons were redeemed, how many units sold or business agreements made during exhibition, etc. For activities where the date cannot be recorded, like in case of gifts, free samples, the organisations compare the sales data before, during, and after such promotion activity to arrive at a conclusion. In case of number of sales promotion tools in place and other factors influencing sales, some organisations ask customers for their contact details to check with them later on how they rate the product and if they will buy the product again.