SALES PROMOTION TOOLS & TECHNIQUES

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M.COM First Year Tutor Marked Solved Assignment

Course Code: IBO – 02
Course Title: International Marketing Management
Assignment Code: IBO-02/TMA/2019-20
Coverage: All Blocks

IBO – 02 International Marketing Management Solved Assignment for 2019-20

Q5.) Discuss various sales promotion tools in international marketing to enthuse consumers, middlemen and own sales force to buy/promote the product.

Ans: Sales promotion is a part of the promotional mix. Sales promotion refers to the activities which supplement and co-ordinate personal selling and advertising to attract customers to buy a product. Sales promotion methods include displays, demonstrations, expositions, exhibitions and other non-recurrent selling efforts that aim at impelling spot buying action by prospective customers.

Sale promotion techniques are indirect and non-personal. Sales promotion activities are more common for consumer goods marketing than for industrial goods. Consumers are attracted by displays, packaging, and publicity. Sales promotion devices are also a source of information for the customers.

According to Philip Kotler – “Sales promotion consists of a diverse collection of incentive tools, mostly short-term, designed to stimulate quicker and/or greater purchase of particular product/services by consumers or the trade.”

  A. Consumer-oriented Promotion Tools:

The consumer-oriented promotion tools are aimed at increasing the sales to existing consumers and to attract new customers to the firms. It is also called a pull strategy. The consumer can take the benefit of promotion tools either from the manufactures or from the dealer, or from both.

Some of the commonly used consumer-oriented promotion tools are as follows:

1. Free samples:

In this case, small units of free samples are delivered door to door, sent through direct mail, attached to another product, or given along with the purchase of some other product (e.g., soaps, soft drinks, detergents or other items). Free samples are normally provided during the introductory stage of the product.

2. Coupons:

This involves offering a price reduction or saving to customers on the purchase of a specific product. The coupons may be mailed or enclosed along with other products or inserted in a magazine or newspaper advertisement.

3. Exchange scheme:

In this case, the customer exchanges the old product for a new one. The old product’s exchange value is deducted from the price of the new product. This sales promotion tool is used by several companies for consumer durables. For instance. Philips came up with a five-in-one offer. The offer consisted of Philips TV, two-in-one, iron, mixer-grinder, and rice cooker at an attractive price.

4. Discounts:

It refers to a reduction in price on a particular item during a particular period. It is common during the festival season or during the off-season period. It is very stimulating short-term sales, especially when the discount provided is the genuine one. For instance, the Hawkins pressure cooker manufacturer announced an attractive price reduction, up to Rs.150 off, on a new Hawkins in exchange for any old pressure cooker. The advertisement specified that the offer was open only up to a particular date.

5. Premium offers:

These can be extra quantities of the same product at the regular price. Premium offers are used by several firms selling FMCG goods such as detergents, soaps, and food items. For instance, Colgate offered 125 g in a tube for the price of 100 g.

6. Personality promotions:

This type of promotion is used to attract a greater number of customers in a store and to promote the sale of a particular item. For instance, a famous sports personality may be hired to provide autographs to customers visiting a sports shop.

7. Installment sales:

In this case, consumers initially pay a smaller amount of the price and the balance amount in monthly installments over a period of time. Many consumer durables such as refrigerators and cars are sold on an installment basis. For example, Washotex came up with a scheme to pay 20 percent now and take home the Washotex washing machine. The consumers were offered the facility of paying the balance in 24 equal monthly installments.

B. Trade-oriented Sales Promotion:

Trade-oriented sales promotion programmes are directed at the dealer network of the company to motivate them to sell more of the company’s brand than other brands. It is also known as a push strategy, which is directed at the dealer network so that they push the brand to the consumers by giving priority over other competitor brands.

1. Cash bonuses:

It can be in the form of one extra case for every five cases ordered, cash discounts or straight cash payments to encourage volume sales, product display, or in support of a price reduction to customers.

2. Stock return:

Some firms take back partly or wholly the unsold stocks lying with the retailers and distribute it to other dealers, where there is a demand for such stocks.

3. Credit terms:

Special credit terms may provide to encourage bulk orders from retailers or dealers.

C. Business and Salesforce promotion tools : 

These are directed towards the company’s sales force so that they put in extra effort in making sales.

1) Manufacturers organize sales contests wherein the winners are rewarded by way of money, incentives, trips, gifts, etc.

2) Trade shows – Trade shows or conventions are organized to meet new customers, introduce new products, educating customers about the new as well as existing products. These help the manufacturers come in direct contact with the buyers. Manufacturers sign contracts worth millions or even billions in international trade shows.