Sales Promotion

Author: Jim Riley
Last updated: Sunday 23
September, 2012

Marketing - Sales promotion
Sales promotion is the process of persuading
a potential customer to buy the product.
Sales promotion is designed to be used as a
short-term tactic to boost sales – it is not
really designed to build long-term customer
loyalty.
Some sales promotions are aimed at
consumers. Others are targeted at
intermediaries (such as agents and wholesalers)
or at the firm’s sales force.
When undertaking a sales promotion, there are
several factors that a business must take into
account:

What does the promotion cost – will the
resulting sales boost justify the investment?
Is the sales promotion consistent with
the brand image? A promotion that heavily
discounts a product with a premium price
might do some long-term damage to a
brand
Will the sales promotion attract
customers who will continue to buy the
product once the promotion ends, or will it
simply attract those customers who are
always on the look-out for a bargain?
There are many methods of sales promotion,
including:
Money off coupons – customers receive
coupons, or cut coupons out of newspapers
or a products packaging that enables them
to buy the product next time at a reduced
price
Competitions – buying the product will
allow the customer to take part in a chance
to win a prize
Discount vouchers – a voucher (like a
money off coupon)
Free gifts – a free product when buy
another product
Point of sale materials – e.g. posters, display
stands – ways of presenting the product in
its best way or show the customer that the
product is there.
Loyalty cards – e.g. Nectar and Air Miles;
where customers earn points for buying
certain goods or shopping at certain
retailers – that can later be exchanged for
money, goods or other offers
Loyalty cards have recently become an
important form of sales promotion. They
encourage the customer to return to the
retailer by giving them discounts based on the
spending from a previous visit. Loyalty cards
can offset the discounts they offer by making
more sales and persuading the customer to
come back. They also provide information
about the shopping habits of customers –
where do they shop, when and what do they
buy? This is very valuable marketing research
and can be used in the planning process for
new and existing products.

The main advantages and disadvantages of
sales promotion are:

Advantages
Disadvantages
Effective at achieving a quick boost to sales
Encourages customers to trial a product or
switch brands
Sales effect may only be short-term
Customers may come to expect or anticipate
further promotions
May damage brand image