issues and challenges in sales promotion

Sales promotions can help to increase or reduce trade inventories 11. These four conditions were taken from J. O. Peckham’s list from “Wheel of Marketing” published in 1977. Gupta 1993) Limitations of this review As it was mentioned in the beginning of this paper it was intended to be general overview of the academic literature on sales promotion; it was not focused on any of the particular techniques of sales promotion. Hire a Professional to Get Your 100% Plagiarism Free Paper. Contests and sweepstakes – a form of consumer oriented promotion in which winners receive prizes, cash, or merchandise. 85-92 Desiraju Ramarao (2001) “New Product Introductions, Slotting Allowances, and Retailer Discretion” Journal of Retailing 71, Issue 3, (Fall) p. 335 Dickson, Peter and Alan Sawyer (1990), “Point of Purchase Behavior and Price Perceptions of Supermarket Shoppers” Journal of Marketing, 54 (July), 42-53 Dobson, Joe, Alice Tybout, Brian Sternal (1978) “Impact of Deals and Deals Retraction on Brand Switching:” Journal of Marketing Research, 15 (February) 72-81 Engel J. F. , H. G. Wales, and Warshaw “Promotional strategy” Irwin 1967 Gardener, Elizabeth; Trivedi, Minakshi A communication framework to evaluate sales promotion strategies. In, on, and near-packs (and reusable containers) – specially designed pieces that retailers give to consumers who purchase the promoted product. org/student_account/fall_01/adv392/anuta/promo/effectiveness. Many of the researches cited here done on particular products or product category. 4. In conjunction with a sales drive to increase store distribution 3. Communication – promotions gain attention and usually provide information that may lead the consumer to the product 2. But the challenges are different from one to the other. Reality This part of the paper organized as following – each point is presented and then analyzed in respect of the research done in that area. The implications of this models give an insight into short-term versus long-term communication effect of sales promotions. “Sales promotion represents those marketing efforts that are supplementary in nature, are conducted for a limited period of time and seek to induce buying ” (Davis, 1981) b. B) Sales promotions are marketing events – they all happen within marketing strategy of the company/ organization. So, I’ll proceed talking about the objectives of sales promotions and what sales promotion can do for the company and what it can’t do. What sales promotion can do? Little’s Brandaid Promotional Model. Sales promotion can affect purchase acceleration – Here two aspects of purchase acceleration should be considered – increased quantity and decreased interpurchase time. com operations. If a promotion lasts too long, especially if it exceeds discounts of 15-20%, the customers may start thinking about the regular prices of the company, wondering how it is possible to survive with such low prices for so long, concluding that they have big profit margins and that the normal price is ridiculously high. And though replication of the study did not confirm the results of the original research, this is still considered as one of the possible explanations of the variations of the levels of advertising and promotional expenditures for different companies. This is part of the Brandaid aggregate marketing model developed by Little. Promotion Proliferation – there are many forms and combinations of sales promotions techniques that are being used nowadays. (Kotler 1983, Levy 1971, Shimp 1993). The word “promotion” comes from a Latin word meaning “to move forward”. So as the follow up of this literature review there should be more done to uncover what we really know about the effectiveness, application and models for each of the vehicles of sales promotion. K. Jocz, Marketing Science Institute 1000 Cambridge MA 1984 pp. Sales promotion can not compensate for inadequate levels of consumer advertising 5. One of the aspects that is not reflected in this operational definition is the short-term effect of promotion, this issue is still under discussion and will be addressed later in the paper. Sales promotion can obtain trial of the product. Coupons – A promotional device that provides a price-off to consumer upon redeeming the coupon 3. Price-offs – promotion which entails a reduction in the brand’s regular price. This is another possible direction of the literature review. Overall there are four challenges for sales promotion activities that they are supposed to meet and accomplish. Because sales promotional tools are so varied in form, no single unified objective can be identified for them. Refund offers – A cash reimbursement to the consumer by the manufacturer whose product the consumer has purchased. Dickson and Sawyer (1982) suggested number of psychological models of consumer response to promotional activities. 2. Trade allowances – deals that are offered to retailers for performing activities in support of manufacturer brand 5. Manufacturers are locked into defensive reactive escalation of sale promotional expenditures. How much to spend on sales promotion relative to advertising was the topic of several researches done for the last 20 years. (Gupta 1993) 2. A common assumption is that advertising, word-of-mouthor the salesperson has infromed the consumer about the product, while sales promotion gives them additional reasons to buy. This diversification as it will be shown later plays very important role in identifying objectives and models for promotions. There is some published work that studies the long run effects of promotions and advertising. Cross-category analyses: Most of the research studies to date, with a few notable exceptions, have estimated and validated their models using a single data set. Another limitation of this paper is that though in some parts of the paper trade promotions are mentioned, I was not particularly focused on the distinguishing between promotions targeted on consumers and on the trade. There are three major contributions of sales promotions that have practical influence of the objectives of promotion: (Kotler 1988) 1. Bonus packs – Extra-quantities of a product that company gives to consumers at a regular price. These techniques can be trade or consumer oriented. It is actually suggested that with low involvement product category promotions might actually have positive influence on brand evaluation Scott Davis, J. Inman, L. McAllister 1992). Because promotions include so many difference tools and mechanisms there is an ongoing threat of viewing sales promotional techniques in isolation from other marketing mix elements. Sales promotion cannot compensate for a poorly trained sales force 2. Number of findings in research prove this case, for example Scott et all (1992), Dickson and Sawyer (1990) found that consumers in our study appear to remember information about promotions very poorly, they were not able to identify the depth of the price cuts. . With this strategy, usually you are not going to get the loyalty of the customers, because most of the people who are attracted by promotions are the ones most sensitive to price, so although you may gain new clients, once your prices are at their normal rates again, you can say bye to a big amount of them. This goes hand in hand with another reason of increasing sales promotions budget – decreased brand loyalty. 57-68 Balasumbamanian S. and Kumar V. 1997) “Explaining Variations in Advertising and Promotional Costs/Sales Ratio: A reanalysis” Journal of Marketing, 61 (January) pp. First, it will establish better generalizability of results across different product categories. Journal of Marketing Research, 30 (November), Issue 4, p. 342-355 Gupta, Sunil (1993) Reflections on `Impact of Sales Promotions on When, What, and How Much to Buy’. As indicated in Table 2 [pic] Coupons and other type of promotions have very important role in driving traffic to the website and in overall company’s operations. Additional Disconfirming Evidence” Journal of Marketing Research, 29 (February) 143- 148 Shultz Don E. , William A. Robinson “Sales Promotion Management” Crain Books, Chicago IL, 1982, Are You on a Short Deadline? He presents one of the first methods/models of measuring effectiveness of sales promotion, where he correlates the objectives of each form of sales promotion with the specific method of measurement. Please note that this paper is not intended to discuss the issues relevant to each particular element of sales promotion, rather it is focused on the general issues and characteristics shared by all (or most) of the components. (Shuhltz 1982). However there is a very important question – how these two aspects will influence (counteract) each other due to the stockpiling effect. Blattberg, Neslin 1990). I thought it would be interesting to provide solutions and recommendations to deal with each of the top six sales challenges facing sales teams today.

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