MODULE 4 MARKETING COMMUNICATION

30.1 SALES PROMOTION

Importance of Sales Promotion
In a competitive market, sales promotion comes handy to a marketer, to
solve several of his short-term hurdles. Short-term because, the impact
of sales promotion measures is not that durable & lasting like the results
obtained through advertising & personal selling. Sales promotion is
understood & practiced as a catalyst & a supporting facility to
advertising & personal selling.

Sales Promotion Serves a Variety of Marketing Needs

For facilitating introduction of new products
For overcoming a unique competitive situation
For unloading accumulated inventory
For overcoming seasonal slumps
As a support & supplement to the advertising effort
As a support & supplement to the salesmens efforts
For persuading salesmen to sell the full line of products
For persuading the dealer to increase the size of inventory

How Does Sales Promotion Differ From Advertising?

Whereas advertising is mostly an indirect approach, sales promotion
is a direct & open inducement to consumers to immediately buy the
product.
While advertising normally has long-term objectives like positioning,
building brand awareness, consumer loyalty or developing new
markets for the brand, sales promotion performs an immediate task
of increasing current sales.
While advertising helps sales by adding some durable & long-term
value to the product, sales promotion aids selling by temporarily
changing the existing price-value equation of the product in favor of
the consumer.
1

MODULE 4 MARKETING COMMUNICATION

30.2 TOOLS/TECHNIQUES OF SALES PROMOTION

Trade fairs, Exhibitions Demonstrations

Coupons, Free-Offers, Price-Offs
Free Samples, Joint Promotions
Contests Consumers, Dealers
Merchandising, Displays
Sales promotion on the Internet

Premiums & Free Offers

ARISTOCRAT LUGGAGE: If you buy an Aristocrat within the next
week, you get a Philips 2-band transistor worth Rs 266/- free! Offer
for just a week!
SUZUKI SHOGUN BIKE: FREE Ray-Ban Sunglasses with
Suzuki Shogun, the most powerful bike of its kind!
AQUAFRESH TOOTHPASTE: At the launch of Aquafresh
toothpaste, SKB offered two tubes for the price of one!
COLGATE: Colgate 125 gms for the price of 100 gms
SANTRO: Book your Santro today & Take home a Worldspace
Hitachi Digital Radio receiver worth absolutely free.
IT FIRMS: IT firms with a range of products give away their main
product free & are still able to make money on the complementary
products & service. For ex, Apache software is free but the upgrades
& support are priced.
SAMSUNG: In one of its sales promotion program, Samsung
announced: This festive season, buy any Samsung product & you
can be taking home another product absolutely FREE. Heres how:
Visit any of the Samsung dealers & along with the product you buy,
you get a plastic coconut. Break the coconut right there & along with 2
pure silver coins that fall out will be third coin, which could bring you
your surprise gift. It could be anything from the Samsung range. The
gift includes fridge, washing machine, TV, mobile phone & airconditioner.
2

MODULE 4 MARKETING COMMUNICATION

30.3 SALES PROMOTION
Discounts, Price-offs: NIRLEP: Nirlep cookware came with 25% discount under
exchange offer. Offer was valid upto a specified date.
Installment offers: WASHOTEX: Washotex washing machines came up with pay
20% now, take home Washotex scheme. Balance payable in 24 installments.
Free samples: Free samples are offered to persuade consumers to try the product.
By offering free samples to a large section of a new market, a firm is gaining an
entry into that market. The constraint in using this tool is that the product should
be of low unit cost, apart from being a product of frequent purchase.
Gifts: Companies distribute gifts to customers, dealers & influential & key people.
These gifts include pens, calendars, diaries, table decorations etc., Gifts normally
carry the firms name & logo. The gifts are intended to create goodwill towards the
firm & indirectly further the firms sales interest.
Exchange schemes, Money back offers: In the consumer durable market, this has
become the latest sales promotion tool. Customers can surrender their old models of
TV or gas stoves for a price & take home new models:
o Akai exchange scheme: Indias #1 CTV, Akai 53 cm is now available for a
shocking Rs 5900/- Heres how:
Bring in your old 51 or 53 cm CTV (in proper working condition) with remote.
Take home new Akai for Rs 5900/- in exchange.
o Godrej fridge with Akai TV: Another scheme of Akai offered an Akai 53cm CTV
& a Godrej Ultra 200 ltr fridge for Rs 14,990/- in exchange for an old CTV. It is
worth noting that the MRP for the fridge was Rs 11,000/-. All CTVs players in
India came up with similar schemes. It helped tap replacement market faster.
o Videocon money back offer: Videocon came up with a unique scheme, a money
back offer. The offer ran like this:
Own a Videocon 21 free
Greatest money back offer
Bring your old 20 or 21 CTV in working condition with remote
Deposit Rs 8,990/- & take home a Videocon 21. Take back Rs 8,990/- after 5
years. There is no catch please.
o Videocon sales went up. The firm got ready money @ 0% interest.
o Philips 5-in1-offer: Philips came up with a 5-in-1 offer. The offer consisted of
Philips TV, 2-in-1, iron, mixer-grinder & rice-cooker at an attractive price.

MODULE 4 MARKETING COMMUNICATION

30.4 SALES PROMOTION CONTESTS
Contests of various kinds constitute another widely-used sales
promotion tool. There are dealer contests & consumer contests. While
dealer contests normally remain a closed affair between the firm & its
dealers, consumer contests are given wide publicity to attract the
participation of the widely-scattered consumer base. Big budgets are
normally allotted for consumer contests.

Consumer Contests
Consumer contests take a variety of forms quiz contests, beauty
contests, scooter/car rallies, slogan contests etc. Whatever be the type of
contest, the intention of the marketer is to create a widespread action &
news around the brand. To get vast mass of consumers interested in the
brand & induce them to buy it is the central idea in all consumer contests.
Contests can be broadly classified into 2 groups: Skill competition &
Sweepstakes governed by chance. When the participant has to suggest a
name to a brand, it involves a skill on the part of the participant. When
the # of a coupon claimed by the consumer is included in a prize draw,
the contest falls under chance.

Factors That Decide Success of Consumer Contests

Studies show that for contests to succeed, they must be simple to operate
from the standpoint of the consumer. If the consumer has to go through
difficult & time-consuming procedures, he will not take part in the
contest. The prizes constitute another major consideration that decides
the success of the contest.
When fabulous prizes are announced & the procedure suggested is also
simple, the contests attract wide attention & arouse consumer interest &
participation. Another condition for the success of the contest is the
publicity given to it. Another precondition for the success of the contest
is the current of honesty behind the offer. The public should perceive
the whole program as genuine.

MODULE 4 MARKETING COMMUNICATION

30.5 EXAMPLES OF CONSUMER CONTESTS
Bombay Dyeing Contest: Conducted in 1990s, this contest offered Rs 10
m in prizes. The entrants had to rank the top 10 Indian film stars from
a series of 12 names. Entrants had to complete a slogan on Bombay
Dyeing fabrics along with a purchase of Rs 100/-.
The Nescheque Contest: This attracted a participation of 0.4 m
consumers vying for the prizes worth Rs 1 m. This contest was planned
to pre-empt launch of Brooke House Coffee.
The Nescafe Shake Contest: This contest was primarily designed to
educate the consumers about Nescafe as a cool summer drink in
addition to its traditional image of a hot beverage.
The Cadburys Contest: Cadburys announced fabulous prizes round
the world economy class air tickets for 2 adults with 2 children, apart
from other durables. The intention of this contest was to thwart the
attempt of introduction of chocolates from Amul.
Bajaj Scratch the Card Contest: To quote Bajaj: The objective of this
contest is to push scooter sales which have been flat & to grow the market.
Also, we want to create excitement for the scooter buyer especially at a
time when sales are slower. The prizes on offer equal a months sales
Bata-HAHK Contest: Bata tied up with Sony TV channel to bring the
Bata-HAHK contest, associating with the hit movie, Hum Apke Hain
Kaun. Every time Sony aired a promo for the movie, Bata TVC was also
aired. The contest gave Bata good exposure at prime time. The contest
was simple: Viewers had to answer 2 questions on the movie & the
winners were offered Maruti cars, CTVs & Music systems.
Pepsi Contest for Children: Pepsi ran a contest among children to
promote its potato chips brand, Ruffles. The program ran like this:
Nearly 500 children from a school are collected in an auditorium, 30 of
them are picked to speak for a minute on a subject of their choice. The
winners get free Ruffles packs. For Pepsi the expenditure at each school
was Rs 1000/- & the cost per child Rs 2/-. Pepsi covered 250 schools &
125K students across the country, spending just Rs 0.2 million.
5

MODULE 4 MARKETING COMMUNICATION

30.6 JOINT PROMOTIONS
JVs are a new trend. 2 or more firms from different industries, but with
shared markets & values, join together & conduct sales promotion
programs. It helps to save promotional expenses for every partner.

Oberoi, Lufthansa & American Express

Oberoi in participation with Lufthansa & Amex came out with the
Oberoi Plus scheme. The Oberoi Plus worked on a system of
redeemable points that were gained once the customer tapped the
services of any one of the joint promotion partners. Since the customer
base of all the 3 firms overlap, Oberoi Plus proved an ideal program to
increase market penetration of every partner, it also gave them
substantial savings.

Diverse groups coming together to do joint promotion

In another interesting campaign, pediatricians joined hands with school
principals, social service agency & a variety of retail stores (ice cream,
pizza, toys, children clothing & video rental) to attract 7 serve their
common market: families with young children. The main objective was
to give immunization injections for children. Immunizations were
organized at convenient times in a spacious childrens store. Parents got
news about the offer through all the participating outlets; children were
given free snack coupons. All partners in the scheme were beneficiaries.

Merchandising/Display
Proper merchandising & display at the store level promotes sales; it
prompts the consumer to switch over to the displayed brand ignoring
existing brand loyalties; it persuades him to buy now rather than
later; and it makes him buy more than the originally intended quantity.
While
advertising
is
useful
for
creating
awareness,
merchandising/display often motivates consumers to buy instantly.
6

MODULE 4 MARKETING COMMUNICATION

30.7 ORGANIZING SALES PROMOTION CAMPAIGNS
Though almost all companies resort to sales promotion
techniques, only some of them go about the job in a planned
way. Others mostly view sales promotion as a weapon that can
be taken out just like that & used in an emergent situation.
Sales promotion yields the intended results only when it meets
certain basic requirements like:
Identifying the requirements
Identifying the right promotion program
Enlisting the involvement of salesmen
Enlisting the support of trade
Enlisting the ad-agencys support
Maintaining the tempo
Timing of campaign/Coordination with other elements of promotion

Potential/Limitation of Sales Promotion

While sales promotion can help a firm to up its sale, it also has
certain limitation. For instance, sales promotion can be used
only for a short-term sales achievement. Also, if sales
promotional devices like price-offs & premiums are frequently
resorted to, the image of the brand suffers; consumers may
hesitate to buy the brand without offers.
It is interesting to remember that marketing experts have the
view that whereas advertising builds up brand loyalty, sales
promotion breaks down brand loyalty. The point is that sales
promotion must be used judiciously ensuring that the money
spent on sales promotion adds to the strength of the total
communication/promotion efforts of the firm.