1.
INTRODUCTION TO SALES
PROMOTION
Meaning of Sales Promotion (Detailed Explanation)
Sales promotion is a marketing technique used by companies to increase the sale of goods and
services in the short run by offering additional benefits to customers, dealers, or salespersons.
It includes all promotional activities other than advertising, personal selling, and publicity that
stimulate immediate buying behaviour.
Sales promotion:
Creates urgency in customers’ minds
Encourages trial of new products
Helps in clearing unsold stock
Indian Example
During festivals like Diwali, companies such as Samsung, LG, and Reliance Digital offer
discounts, cashbacks, and free gifts to boost sales quickly.
Nature / Characteristics of Sales Promotion
1. Short-Term Activity
Sales promotion schemes are temporary and valid only for a specific time period.
They are not continuous like advertising.
Once the offer ends, customers must pay the normal price.
Why important?
This creates urgency and pushes customers to make quick buying decisions.
Indian Example:
“Diwali Sale – Valid till 5 days only” on Amazon.
2. Immediate Impact on Sales
Sales promotion results in quick increase in sales volume.
Customers respond immediately to incentives.
It encourages impulse buying.
Indian Example:
“Buy 1 Get 1 Free” offer by Domino’s Pizza leads to immediate rise in orders.
3. Value-Oriented Incentives
Sales promotion offers extra value to buyers in terms of:
Price reduction
Extra quantity
Free gifts
Chances to win prizes
Indian Example:
Colgate offering an extra 20g toothpaste at the same price.
4. Supplement to Advertising
Sales promotion supports and strengthens advertising efforts.
Advertising creates awareness.
Sales promotion converts awareness into purchase.
Indian Example:
TV ads of Pepsi followed by “Scan & Win” offers.
Objectives of Sales Promotion (Detailed)
1. To Increase Sales Volume
The main objective is to boost sales during slow periods or when demand is low.
Seasonal products rely heavily on sales promotion.
Helps meet sales targets.
Indian Example:
End-of-season sale by Pantaloons and Westside.
2. To Attract New Customers
Free samples and discounts encourage customers to try the product for the first time.
Especially useful for new product launches.
Reduces risk for customers.
Indian Example:
Free shampoo sachets by Clinic Plus in rural India.
3. To Clear Excess or Old Stock
Sales promotion helps companies sell outdated or slow-moving products.
Prevents losses due to storage.
Frees warehouse space.
Indian Example:
Discount sale on previous-year mobile models by Flipkart.
4. To Face Competition
In competitive markets, sales promotion helps firms retain customers.
Price wars and offers attract customers away from competitors.
Indian Example:
Discounts and cashback offers by Swiggy to compete with Zomato.
Tools / Techniques of Sales Promotion (Detailed)
1. Discounts
Reduction in marked price to encourage purchases.
Most common tool.
Attractive to price-sensitive customers.
Indian Example:
“Flat 40% Off” on Myntra fashion products.
2. Coupons
Printed or digital certificates offering price reduction.
Encourages repeat purchases.
Can be used later.
Indian Example:
Amazon discount coupons available in the app.
3. Free Samples
Small quantities of product given free to try.
Builds confidence in product quality.
Useful for FMCG products.
Indian Example:
Free Himalaya face wash samples in malls.
4. Contests and Lucky Draws
Customers get a chance to win prizes.
Increases excitement and engagement.
Encourages repeat purchases.
Indian Example:
Tata Tea contest campaigns.
5. Buy One Get One Free (BOGO)
Extra quantity given at no extra cost.
Increases sales volume.
Very popular in food and apparel sectors.
Indian Example:
BOGO offers by Reliance Trends.
2. ADVANTAGES AND DISADVANTAGES
OF SALES PROMOTION
Advantages of Sales Promotion (Detailed)
1. Immediate Increase in Sales
Sales promotion encourages quick buying decisions.
Helps during market slowdown.
Useful for meeting short-term targets.
Indian Example:
Festive sales by Reliance Smart.
2. Attracts New Customers
Offers reduce hesitation among first-time buyers.
Encourages product trial.
Expands customer base.
Indian Example:
First-order discounts on Zomato.
3. Clears Excess Inventory
Helps sell unsold or old products.
Reduces storage costs.
Prevents spoilage (especially food items).
Indian Example:
Clearance sales by Big Bazaar.
4. Motivates Dealers and Retailers
Trade promotions increase dealer interest.
Better shelf display.
Retailers actively promote the product.
Indian Example:
Extra margins offered by ITC to kirana stores.
5. Increases Brand Awareness
Promotional campaigns bring attention to products.
Customers remember the brand.
Useful for new products.
Indian Example:
Sampling campaigns by Nestlé.
Disadvantages of Sales Promotion (Detailed)
1. Short-Term Effect
Sales rise only during the promotion period.
Does not build long-term loyalty.
Customers may switch brands later.
2. Reduces Brand Image
Frequent discounts may harm brand prestige.
Customers associate product with cheap pricing.
Not suitable for premium brands.
Indian Example:
Luxury brands like Tanishq avoid heavy discounts.
3. Reduces Profit Margins
Promotions involve extra costs.
Discounts lower revenue.
Gifts and contests increase expenses.
4. Encourages Price-Sensitive Behaviour
Customers wait for offers.
Reduces regular sales.
Makes customers less loyal.
5. Not Suitable for All Products
Industrial and luxury products avoid promotions.
Quality and brand image are more important.
3. PUSH AND PULL STRATEGIES
A. PUSH STRATEGY (Detailed)
Meaning
Push strategy involves pushing products through distribution channels by motivating
wholesalers and retailers.
The manufacturer:
Persuades dealers to stock products
Encourages retailers to sell actively
Tools Used in Push Strategy
1. Trade Discounts
Extra discounts offered to dealers.
Increases dealer profit.
Encourages bulk purchases.
Indian Example:
HUL offering trade discounts on soaps.
2. Dealer Incentives
Bonuses, gifts, or foreign trips.
Motivates dealers to sell more.
Improves dealer loyalty.
Indian Example:
Car companies rewarding top dealers.
3. Personal Selling
Sales representatives interact with dealers.
Builds relationships.
Explains product benefits.
Indian Example:
Medical representatives promoting medicines.
Indian Example of Push Strategy
HUL pushes products like Surf Excel by motivating retailers to promote them to customers.
B. PULL STRATEGY (Detailed)
Meaning
Pull strategy focuses on creating strong consumer demand through advertising and
promotions.
Consumers:
Ask retailers for the product
“Pull” the product through the channel
Tools Used in Pull Strategy
1. Advertising
Mass media advertising to attract customers.
Indian Example:
Amul creative advertisements.
2. Consumer Promotions
Discounts, contests, coupons.
Indian Example:
Pepsi prize campaigns.
3. Brand Building
Emotional connection and trust.
Indian Example:
Tata Salt – Desh Ka Namak.
Indian Example of Pull Strategy
Consumers demand Amul Butter due to strong advertising, forcing retailers to stock it.
Summary Difference (Conceptual)
Push → Manufacturer → Dealer → Consumer
Pull → Manufacturer → Consumer → Dealer