Question

SALES PROMOTION: 1) Definition:

2) Trade Sales Promotion and Consumer Sales Promotion: define each, and what is the difference?

3) Tools for Trade Sales Promotion: Provide a good marketing example of each of the following:

a. Trade allowances

b. Push money

c. Free merchandise

d. Store demos

e. Business meetings, conventions, trade shows

Answer 1

1. Definition of 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 rarely suitable as a method of building long-term customer loyalty.

2. Trade Sales Promotion and Consumer Sales Promotion :-

Any sales promotion activity that you do keeping the end consumer in mind is known as consumer sales promotions. Example – if an E-commerce website gives 10% discount on its products, then it wants the consumers to make the best of this deal. This is a consumer focused promotional activity and hence can be called as consumer sales promotions.

If your promotional activities are focused on Dealers, distributors or agents, then it is known as trade promotions. There is a lot of competition in any field. And in channel sales, to get the products moving and to motivate the dealer to perform better, trade discounts are given.

3)

a. Trade Allowances :-

Discount offered by producers or marketers to distribution channel members (distributors, wholesalers, retailers) usually as a short-term promotional incentive. Its objective is to effect a lower retail price to stimulate sales

One type of trade allowance is an advertising allowance (money) to advertise a seller’s products in local newspapers. An advertising allowance benefits both the manufacturer and the retailer. Typically, the retailer can get a lower rate than manufacturers on advertising in local outlets, saving the manufacturer money. The retailer benefits by getting an allowance from the manufacturer.

b. Push Money :-

A push strategy involves promoting a product to businesses (middlemen), such as wholesalers and retailers, who then push the product through the channel promoting it to final consumers.

Manufacturers may set up displays in retail outlets for new products or provide incentives such as price discounts to the retailer so the retailer can promote or push the product to consumers.

c Free Merchandise:-

Free merchandise is premium or “give-away” items. Free merchandise, such as a tool, television, or other product produced by the manufacturer, can also be used to get retailers to sell products to consumers. In other words, a manufacturer of televisions might offer the manager of a retail electronics store a television to push its products. If a certain number of televisions are sold, the manager gets the television. Have you ever been to an electronics store or a furniture store and felt like the salesperson was pushing one particular television or one particular mattress? Perhaps the salesperson was getting push money, or a cash incentive from the manufacturer to push a particular item. The push to sell the item might be because there is a large amount of inventory of it, it is being replaced by a new model, or the product is not selling well.

d. Store Demos;-

Product demonstrations are a form of sales promotion that involves interactive sales presentations such as providing test samples and showing video presentations of a product. This marketing technique is used to introduce new products into retail markets, such as mass-merchandise outlets, by attracting prospective customers to demonstration booths.

e. Business meetings,conventions,trade shows :-

Conventions, or meetings, with groups of professionals also provide a way for sellers to show potential customers different products. For example, a medical convention might be a good opportunity to display a new type of medical device. Sales representatives and managers often attend conventions to market their products.