BANKING DIPLOMA EXAMINATION
Banking Diploma Courses in Bangladesh under The Institute
of Bankers, Bangladesh (IBB)
Marketing of Financial
Services-JAIBB
Sales Promotion
Q. Define sales promotion? What is the nature, role & importance of sales promotion?
OR
What is sales promotion? Discuss the nature, role & importance of sales promotion.
Ans.: Sales promotion is a key
factor & strategy for marketers within the promotional mix. Sales promotion
refers to many kinds of incentives & techniques directed towards consumers
& traders with the intention to
produce immediate or short term effects.
Sales promotion helps in stimulating trial or purchase by final customers or
others in the channel. A marketer can increase the value of its Product/
Service by offering an extra incentive to purchase a Product/ Service or brand.
A few definitions are quoted below:-
1. American Marketing Association - Sales
promotions is media & non media marketing pressure applied for a
predetermined, limited period of time in order to stimulate trial & impulse
purchases, increase consumer demand or improve Product/ Service quality.
2. Council of Sales Promotion Agencies – sales
promotion is a marketing discipline that utilizes a variety of incentives
techniques to structure sales related programs targeted to consumers/trade/ and
or sales level, that generate a specific measurable action or response for a
Product/ Service/service.
3. Institute of sales promotion, U.K. – “Sales
promotion comprises that range of techniques used to attain sales/marketing
objectives a cost effective manner adding value to a Product/ Service or
service either to intermediate or end users, normally but not exclusively
within a definite time period”.
Sales promotions have 3 distinct
characteristics –
(a) Communication – They gain attention &
usually provide information that may lead the consumer to the Product/ Service.
(b) Incentive – They give certain concession,
inducement or contribution that gives value to the consumer.
(c) Invitation – They invite a distinct
invitation to engage in the tre.
Nature of
sales promotion:-
1. Irregular / non recurring activity- Sales
promotion is an irregular & non recurring activity to increase the sales
& this technique is used for specific situations only such as decline in
demand, fall in profit, acute competition in the market or during the
introduction of new Product/ Service in the market.
2. Target- The target for producer’s sales
promotion may be middleman, end users, household or business users or the
producer’s own sales force. Middleman sales promotion at their sales people or
prospects further down the channel of distribution.
3. Motivation & extra incentive- Sales
promotion involves some type of incentives that offer a reason to buy. This
incentive is usually the key element in a promotional program & is an
effort by which consumers, traders and sales force are motivated towards
maximum sales.
4. Acceleration tool- sales promotion is designed
to speed up the selling process & maximize sales volume.
5. Immediate impact- Sales promotion can be
implemented quickly & gets sales results sooner than advertising sales
promotions offers an incentive to buy now.
6. Objective- The objective of sales promotion is
to establish a link & coordination between the activities like advertising,
personal selling, publicity etc. sales promotion bridges a gap between
advertising and personal selling.
7. Non media activity- Sales promotion is
referred to as a non media activity as sales promotion is differentiated from
advertising & publicity & also includes them as part of the overall
promotions mix.
8. Strategic role- Because of the immediate
nature of the impact, sales promotion have been thought of as merely this view
is changing and the strategic role of sales promotion and their integral role
in the promotional mix are being recognized.
9. Planned activity- The fact that sales
promotion can be effective throughout the life of a brand shows their strategic
role. Sales promotion activities should be planned well to stimulate sale.
10. Versatile- Sales promotion is extremely
versatile. The different forms of sales promotion are capable of being used
with various groups & designed to achieve different effects. Sales
promotion can be useful throughout the Product/ Service life cycle.
11. Means of marketing communication- It is an
important means of communication by which views & ideas of consumers about
the Product/ Services & services are exchanged with the producers
regularly.
12. An element of promotion mix- Sales promotion
is one of the important elements of promotion mix, other than advertising,
personal selling and publicity.
13. Universal activity- It is a universal
activity adopted by all the economies of the world in their sales efforts.
Role of
sales promotion:-
1. To popularize goods and services of the
producer among the potential consumers & to motivate them towards larger
purchases.
2. To motivate the existing customers for maximum
purchase.
3. To maintain the sales up to normal level even
during seasonal vacations & during the declining stage of PLC.
4. To increase goodwill of the firm.
5. To educate customers/dealers & salesmen
about the techniques of sales promotion.
6. To simplify the efforts of sales force &
motivate them for larger purchase.
7. To stimulate maximum sales on special
occasions such as Diwali, religious festivals & other such occasions.
8. To search for a new market & to introduce
new Product/ Services in to the market.
9. To counteract competition.
10. To facilitate coordination & proper link
between advertising and personal selling.
11. To promote larger sales in certain specified
segments of market.
12. To present a counter promotional program
against the competitoBDT
13. To develop patronage habits among customeBDT
14. To prove the Product/ Service better in
quality & useBDT
Importance
of sales promotion:-
Sales promotion is an important component of the
marketing program . It can be a specific tool of the promotion. Quality sales
promotion provides advantages to the various groups described below:-
1. Importance to consumers
2. Importance to produceBDT
3. Importance to middlemen.
4. Importance to society & nation.
1.
Importance to consumers:-
(i) Availability of new Product/ Services- It is
easy to sell new Product/ Services with the help of sales promotional tools.
Hence the producers are encouraged to bring new Product/ Services.
(ii) Various rebates & free discounts- Sales
promotions offers various incentives like rebates & free discounts, free
samples which helps to stimulates sales & purchase.
(iii) Thrill in life- The various incentives
contents samples, demonstrations, fair and exhibitions create thrill and joy in
consumer’s life and the relish these beneficial offeBDT
(iv) Low price- Sales promotion increases sales
volume and reduce the unit cost of Product/ Serviceion & thus the prices
reduce & it benefits consumeBDT
(v) Increase knowledge- Sales promotion increases
the knowledge of the consumers with regard to the uses,
operation & maintenance of the Product/
Service.
(vi) Provide higher standard of living.
(vii) Buying confidence- Sales promotion tools
provide the consumers an opportunity to understand the Product/ Service. This
creates a buying confidence among consumeBDT They may take better buying
decisions which ultimately increases their satisfaction level.
(viii) Minimize exploitation- The promotional
plan creates a better knowledge about the Product/ Services, their uses &
quality. As a result, the seller can’t exploit the consumeBDT
2.
Importance to producers:-
(i) Increase in sales- Sales promotion attract
consumers & stimulate them to make larger purchaser.
(ii) Improve effectiveness of Media Activities-
the sales promotions plans make the advertisement & other media activities
more effective to achieve the sales largest these give pulling power to ads.
(iii) Help personal selling- sales promotions
supports personal selling process the salespersons can use demonstrations ,
distributions to free samples , contest methods to push the sales. Sales
promotion aimed at company’s own sales force might motivate salesmen to get new
costumers, selling a Product/ Service.
(iv) Able to capture new market.
(v) Increase regular sales & seasonal
Product/ Services.
(vi) It helps in increasing goodwill of the firm.
(vii) The various promotional incentives offered
to the dealers help to achieve cooperation from them to sale the Product/
Services & to maintain maximum stock with them.
(viii) It is an effective step to face the
competition.
(ix) It helps in increasing the demand of new
Product/ Services.
(x) It helps in maintaining existing customeBDT
(xi) It creates a trusting attitude among
customeBDT Free sample & functional demonstrations creates a faith in the
use of merchandise which results in longer sales.
Importance
to middlemen / dealers:-
(i) Facilitates longer sale.
(ii) By operating various sales promotional
plans, manufacturers provide various type of helps such as rebates, trade
discounts, gifts, rewards to dealers & reselleBDT
(iii) A direct relationship between the dealers
& the customers are established through the sales promotion techniques
which will continue for a long term.
(iv) As the cost of each deal is reduced the
profits of dealers are also increased.
Q. What are the functions performed by a
sales promotion department?
Ans.
The success of modern business largely depends on the functions of sales
promotion department. Sales promotion department becomes more important as
there exist a buyers’ market in place of a seller’s market.
The functions & responsibilities of sales
promotions department have been described by Alfered Ghoss & Haughten in 3
ways:
To establish coordination with other departments.
1. Assisting functions towards dealeBDT
2. To motivate the customeBDT
Usually
the sales promotions department undertakes the following functions:-
1. Planning for sales promotion company-The
primary function of the sales promotions department is to make long term &
short term planning for undertaking promotional programs. This is done by
evaluating the various factors such as market condition , level of competition
, demand & supply situation , advertising , personal selling , etc.
2. Assistance to top executives- The sales
promotions department provides various information to top executives & give
assistance in related matters for decision making.
3. Coordination & liaison with other
departments- The sales promotion department regularly coordinates with other
departments such as advertising, sales force management, packaging, publicity
etc. The value promotion is coordinated in view of the travelling schedule of
salesmen, sales presentation etc. Sales promotion department is also associated
with Product/ Serviceion, finance, training departments of the organization
& established coordination with these departments from time to time.
4. Sales promotion research- In order to make
sales promotion program more effective , the S.P. department undertakes surveys
& evaluates the information gathered to know about the changing values,
traditions, culture , consumers behavior & public opinions.
5. Execution of sales promotion program -The
sales promotion department also execute programs design for consumers, dealers
& the various advertising & promotional agencies, PR officers,
distributers & exchange ideas with them. It organizes sales exhibitions,
trade fairs, contests etc, from time to time.
6. Provides training to the sales lesson -The
sales promotion department trains the salesmen about the company , its Product/
Services , promotional incentives being gives to buyeBDT The department also
gives introduction about company’s policies & plans. Customers-salesmen
relationship.
7. Evaluation of sales promotion - sales
promotion department evaluates the planned promotional program & with the
help of these promotional plans, data are collected & it is analyzed to
find out the effectiveness of the program. Consumes survey, consumer panels
gives a clear picture of the various sales promotional tools.
8. Assisting dealers / middlemen to make
advertising more effective-dealers also deal with advertising of the various
Product/ Services. The sales promotion department helps in producing training
to the salesmen , to promote dealer interests etc. The sales promotion
department also decides on with best advertising messages, copies & media
for their Product/ Services.
9. Coordination between advertising &
personal selling.
Q. What is distinction with advertising &
personal selling?
OR
Discuss the points which make sales promotion
distance with that of Advertising & personal selling.
Ans.
Sales promotion can be differentiated from advertising in the following ways:-
1. New media activity:- Sales promotions a
non-media or below the line activity & advertising is the media related
activity.
2. Limited time period:-Advertising is for long
term effect & is for longer periods, whereas sales promotion is for a
limited time period only.
3. Easy evaluation:-The impact of sales promotion
can be easily measured in comparison to advertising.
4. Faces on immediate purchase:- Advertising is
designed to have awareness , interest & preference building effects over a
long run. Sales promotion simulates quick & immediate purchase or sales
promotion offers a reason to buy now.
5. Creating action:-Advertisement builds long
term brand awareness & sales promotion is used for creating action.
Distinction of sales promotion & personal selling.
1. Role:- Sales promotion helps to increase the
effectiveness of personal selling & personal selling creates desire for a
Product/ Service thereby effecting sales .
2. Motivation:-Sales promotion provides physical
motivation to customers personal selling provides physical and emotional
motivation to customers
3. Personal presence:-Personal presence of
salesmen is not necessary in sales promotion whereas in personal selling
salesmen is required for selling.
4. Media:-Sales promotion can be presented
through any media like vocal, written or audio visual personal selling it can
be presented through vocal media only.
5. Compumentary function:- Sales promotion is
complimentary to personal selling whereas personal selling does not complement
to the sales promotion program.
6. Continuity:- Sales promotion is not used as a
securing activity whereas personal selling is a routure activity which
regularly operates.
7. Orientation:- Sales promotion is oriented largely
towards the firms or its Product/ Service , personal selling in customer
oriented.
8. Object:-The objective of sales promotion is to
feel a gap between advertising & personal selling & the objective of
personal selling is to solve the problems of customers & to get more sales
Q. What are the roles of sales promotion in
an company or shortages?
Ans. There are three types of world economy:-
developed, developing & under developed (Shortage economy) . In an economy
of shortages, the availability of goods & resources are shorter or lesser
than their demands.
Limitations of a shortage economy-
1. Under developed in economic aspects.
2. Natural resources remain untapped.
3. Restricted development of industrial
activities.
4. Lower standard of living of people .
5. Shorter supply of Product/ Service &
resources.
6. Slow growth of capital formation.
7. Limited opportunity for employment.
Economists say that development of economy is
possible only when there is increased sale. Therefore sales promotion is considered
to be tool for stimulating the sales. Also, in a shortage economy, seller’s market is
dominant whereby seller takes the advantage of the situation & creates
situations of unfair trade practice. Thus, sales promotion can stop this
situation of unfair trade practice & thus the economy will grow through the
Product/ Serviceion of new items copy setting Product/ Services of new
industries & industrial units & this way the wheel of economy
development might move faster & can create a surplus situation in an
economy of shortage.
Q. What
are the commonly used tools & techniques of dealer? Promotions?
OR
What are
the different sales promotional tools useful for traders?
Ans.
These promotional tools are targeted to marketing intermediaries such as
wholesalers, retailers, distributers or agents who stock the manufactures
Product/ Services for sale sales promotion directed at the trade helps push a
Product/ Service into the distribution channel until it reaches customeBDT
Here are the most common types of trade promotion
tools:-
1) Point of purchase displays:- A manufacturer
designed display distributed to retailers who use it to draw the customers
attention to Product/ Service promotions is called as pop displays. Pop
includes passion racks, displaycartoons, banners, signs, price cards,
mechanical Product/ Service, dispenses etc.
2) Incentives: - Incentives to members of trade
include awards in the form of travel, cash bonus, gifts etc. another form of
trade incentive is referred to as push money. Push money is carried out through
a program in which retail sales people are offered a monetary reward for
featuring a marketers brand with shoppe BDT
3) Trade allowance: - Trade allowance is probably
a discount or deal offered to retailers or whole sales, to encourage them to
stock display the manufacturers Product/ Service Types of allowances offered-
(i)Advertising allowance: - In this method,
actual expenses or certain percentage to purchases made, are not met by the
producer. Instead an allowance is paid to the dealer toward advertising
expenses.
(ii) Promotional allowance: - Certain items which
helps in advertising and publicity are distributed to retailers free of
cost.Such novelties include pens, calendars, paper weights, bill books, bags,
diaries, memo pads etc.
(iii)Display allowance:- The producers who don’t
provide display material to dealers, provide them with display allowances.
(iv)Buying allowance/Price off allowance:- The
price of allowance is given on purchase made during a specified period of time
directly from the producer. This encourage larger purchase from the producer.
(v) Brand deal allowance:- Such allowances are
given to those middlemen who deal exclusively with a single brand.
(vi)Buy back allowance:- It is a sum of money
given to the reseller for each unit brought after an initial deal is over.
4) Sales training program:- Another form of
dealer promotional tool is sales training program. Salesmen at the retail level
need to be trained about the features of the Product/ Service, benefits,
advantages of different models/brands etc. cosmetics, appliances, computers,
electronic Product/ Services are examples for which consumer rely on trained
sales staff.
5) Trade shows:- Trade shows are certain
activities designed where manufacturer can display their Product/ Services to
current as well as prospective buyer BDT They are attended by retailers to
distributors and involve demonstrating Product/ Services, identifying
prospectus and gathering customer BDT Trade shows are particularly valuable
when a new Product/ Service is introducing in to the market many companies use
trade shows to entertain key customers and to develop and maintain relationship
with them.
6) Cooperative advertising:- In this method the
dealer and the producer both jointly share the expenses of advertising. Either
the producer may bear a fix amount of the advertising expenses or certain
percentage to the purchase made by the dealer in a year.
7) Free merchandise:- Free merchandise is
sometimes offered to resellers who purchase stated quantities of the same or
different Product/ Services.
8) Sales contests:- Sales contests are organized
for dealers also on the basis of highest sales achieved by dealers during a
specific time period. Prizes, certificates are issued to such dealers and such
contest hence motivates the dealer for longer purchases.
9) Retailer kits:- Materials that support
retailers selling efforts are retailer kits. The kits contain supporting
information such as detailed Product/ Service specification, ad slicks- print
ads that are ready to be sent to the local print media.
(10) Advertising and display aids:- Some of the
aid are –
(i) Local news paper advertising:- Advertisements
in local news paper specifying name, contact no. and address of dealers, helps
the people to know about the dealers in town.
(ii) Direct mail advertising:- In this the
producer sends various advertising and publicity material to dealer by mail.
This includes reply cards, calendars, diaries, folders, house magazines, order
book, hand bills etc.
(iii)Outdoor advertising:- Producers provide
banners, sign boards, posters, bill boards, holdings to dealers at their own
cost.
(iv)Organizing fashion shows:- Some companies
organize fashion shows in big cities to promote their Product/ Services. This
is also an encouragement to Deale BDT
11) Sales assistance:-
(i) Building up sales plan: - Producers extend
help and express knowledge to wholesalers and retailers in building up sales
plan, formulating strategies and sales programs. This helps the dealers to
increase their selling skills.
(ii) Sales meetings:- Producers organize sales
meeting for distributors to provide knowledge about new Product/ Services,
sales policies and sales plan.
(iii)Buy back guarantee:- Producers sometimes
gives buy back guarantee to dealers for the goods that have not been sold by
them. Thus goods are sold to dealers on sell or return condition.
(iv)Special trade terms:- Middlemen/Dealers are
encouraged by special trade terms which may be related to price, payment,
credit, allowance, financial assistance balance of stock etc.
(v) Special services:- Producers also offer
special services to dealers which include packaging, categorization of Product/
Services, dealer listing.
(vi)Credit facilities: - Producers provide short
term credit facility to dealers to motivate them to have maximum stock of the
goods.
12) Management assistance:- It includes –
(i) Providing knowledge about management
techniques.
(ii) Advice towards policy matteBDT
(iii)Guidance in setting up internal
organization.
(iv)Sales management process.
Q. What are the different tools of sales
promotion for consumer promotion?
Ans.
This sales promotion is aimed at final consumer or use BDT Consumer sales
promotion used by retailers are aimed at attracting customers to specific locations.
The consumer promotion tools are-
1) Sample-Samples are offer of a trial amount of
a Product/ Service generally 84% consumer package goods marketers use sampling
as part of their promotion strategy. By offering free samples, a company gains
entry into that market, soaps, detergents, toothpastes, shampoos, conditioners
are examples of few Product/ Services that are normally popularized through
free samples. Free samples are distributed for several reasons: To stimulate
trail of a Product/ Service to increase sales volume in the early stages of
PLC, to obtain desirable distribution. The samples can be distributed through
in store sampling (food Product/ Services and cosmetics), door to door
sampling, mail sampling, (through postal service), news paper sampling, mobile
sampling, on package sampling, professional sampling(drugs).
2) Premiums:- Premiums are goods offered either
free or at low cost or an incentive to buy the Product/ Service. Premiums are
offered as bonus, prize, gifts or other free offer BDT Premium can be used to
boost sales to attract competitor’s customers, introduces different Product/
Services.
E.g.:- Aquafresh toothpaste- At the launching of
Aquafresh toothpaste offered two tubes at the price of one.
Colgate offered 125gm. tube for the price of 100
gm. Santro- book year santro today & take home a
world space Hitachi
digital radio receiver worth BDT 4990/- free.
Pepe- Buy Product/ Services worth BDT 4000/-
& get a bag worth BDT 888/- free.
Adidas- Buy Product/ Service worth BDT 2800/- and
get a Adidas bag free.
3) Contests: - Contests of various kinds
constitute widely used sales promotion tools. There are consumer contest which
are open for all, consumer contest are given wide publicity to attract the
participation of the widely scattered consumer base. Consumer contest take a
variety of forms- Quiz contests, beauty contest, car rallies, scooter rallies,
suggesting a logo etc. Contests can be divided in to 2 broad categories- Skill
competition & sweepstakes. One form of sweepstakes is a game & scratch
off cards with instant winners & prizes are an important promotional tool.
E.g.:
(i) Nescafe shake contest – Nescafe shake contest
offered BDT 5 lacks as total prize money with BDT 1 lack for the first prize.
The total number of prizes ran to 21000. The contest had a specific objective
to make consumers aware of Nescafe as a cool summer drunk in addition to this
traditional image of a hot beverage.
(ii) Cadbury’s family contest- Cadbury announced
fabulous prizes round the world, economy class are ticket for two adults &
two children plus BDT 1 lack in prize money. The participant has to submit a
minimum no. of Cadbury’s wrappers & coin a jingle to participate in the
contest. The campaign helped to increase the sales.
(iii)Lakme – Create your own shade contest –
Lakme lever held the to elle 18, Create your own shade contest for the target
audience of elle 18 range of colors cosmetics & fragnances. The
participants were required to create own shades. The winner created a sparkling
blue shade & later Lakme launched the new shade in the market.
(iv) Pepsi contest for children – Pepsi ran a
contest among children to promote its potato chips brand ruffles. Nearly 500
children from a school were collected 30 of them were picked to speak for a
minute the winners were given ruffles. Pepsi had covered 250 schools and 125000
students across the country spending BDT 2 lacks only.
4) Demonstration:- Companies resort to Product/
Service demonstration for sales promotion especially when they are coming up.
With a Product/ Service new to the market. In Bangladesh Product/ Services like
beverages, washing powders, electronic Product/ Service have utilized Product/
Service demonstration as a tool of sales promotion. it may be-
(i) Demonstration at retail store.
(ii) School demonstration.
(iii)Door to door demonstration.
(iv)Demonstrations to key people.
5) Coupons: - Coupons are certificates which
offer reductions to consumers for specified items. Coupons distributed through
newspaper, magazine advertisement or by direct mail. Coupons enchoose the
customer to exploit the bargain and them also serve as an inducement to the
trade for stocking the items.
Types of coupons-
(i) Instant redemption coupon- Consumers can
immediately redeem the coupon.
(ii) Bonus back coupon- Coupons can be placed
inside packages so that customer can’t redeem them quickly.
(iii) Scanner delivered coupon- Firm can issue
coupons at the cash register. These are triggered by an item being scanned.
(iv) Cross ruffling- It is the placement of a coupon
for one Product/ Service on another Product/ Service. E.g. a coupon for an
onion sauce placed on a package of potato chips is a cross scuffling coupon.
(v)Free standing inserts coupons can be delivered
to consumers through news paper.
(vi) In store couponing- Coupons are distributed
in a retail environment.
6) Trade fairs and exhibitions:- They form one of
the oldest practices of sales promotion. Trade fair & exhibition provide
companies with the opportunity for introducing and displaying their Product/ Services.
This brings the company’s Product/ Service and the consumer’s direct contact
with each other. Trade fairs have become a handy and effective tool of sales
promotion. Orders and enquiries worth billions get generated at international
trade fair BDT
7) Discounts and price of E.g. 20% off on levis 10% on Tanishq
8) Free gifts/Gift cards- Companies also give
gifts to consumers, dealers and key people. These gifts include pens, diaries,
table, decoration. Gifts normally carry the company’s name and logo. The gifts
are intended to create goodwill towards the company.
9) Exchange schemes/Money back offers- This is
the latest sales promotion tool in consumer disables market. E.g. Akai exchange
scheme- Bring in your old color TV with remote. Videocon money back offer.
Philips- 5 in 1 offer.- Philips TV, 2 in 1,
Mixer, grinder, rice cooker at an attractive price. Sponsoring the games and teams- Many companies
like reliance, Pepsi, Pentaloons, Maruti sponsor different games and
sports in the country and abroad.
Q. What are the tools of sales promotion used
for business and industrial goals?
Ans.
Sales promotion is targeted for business and industrial goods also Industrial
Product/ Services differ with that of consumer goods. The tools which are used
are-
1) Trade shows: - The industrial Product/
Services are displayed and demonstrated to the members of trade and industry.
The representatives explain about the Product/ Services.
The trade shows can be useful for smaller firms
which can’t much in advertising and also salesman can make for more contacts.
Trade shows are important rules for reaching potential wholesalers & distributors
for a company’s brand.
2) Business gifts:- These gifts are given as a
part of building and maintaining a close working relationship with suppliers
business gifts may include small items of jewellary, watch, electronic items,
expensive trips.
3) Trial offers:- Trial offers are particularly
well suited to the business and industrial market. Trial offers provide a way
for buyers to lower the risks of making a commitment to one brand over another.
Trial offer is a good way to attract new customers who need a reason to try
something new.
4) Frequency program: - high degree of travel
associated with many business professionals make frequency programs and an
ideal form of sales promotion for the business and industrial markets. This can
be used in airline, hotel and other industries.
5) Coupons:- Coupons are used in business to
business sector. Coupons must reach the hands of a purchasing against or
someone who has the authority to make decision.
6) Contest and sweepstakes:- As like in consumer
promotional methods. Customer methods. Business buyers are also interested in
winning prizes as are customers in other situations.
7) Sampling:- Sampling is an excellent method to
encourage a business to buy a Product/ Service. E.g. producing a sample in the
area of process materials has the advantage of giving the engineers an
opportunity to analyze the materials to see if it meets their standards. Through
analysis they may find that the material is actually superior to the Product/
Service they currently use.
8) Bonus picks:- offering a prospective a bonus
pack may attract new users as price is a negotiated item in our B2B sector
price of discount can be offered by vendors seeking to obtain a new business
contract.
9) Other tools:- They may include demonstrations,
free training, warranties, credit faculties maintenance services, films,
publicities and audio visual aids.
Q. Discuss the promotional tools aimed at
internal organization?
Ans. Promotional of internal organization concern
with the steps to be taken for a sound promotional programs. The elements of
internal promotion are as follows-
1) Approval of promotional philosophy:- The
success of a promotional program depends on the attitude of the top management.
There for a promotional program requires the approval of the top management.
The manager has to make a cost profit analyses so that top management appraise
him about the profitability of program.
2) Product/ Service department for marketing:-
Quality of a Product/ Service is responsible for the success of sales promotion
program. As the customers are quality conscious and he always makes a
comparison with that of competitors Product/ Service before taking the final
decision of purchase. Therefore the Product/ Service manager should
continuously work on improving the features of the Product/ Service.
3) Coordination with advertising department:-It
is the advertising department that make the ground for the sales by giving
Product/ Service knowledge among the distributors as well as potential customer
BDT When the frequency of the advertisement is reduced then the sales
promotion’s frequency start increasing. Therefore a coordination has to be made
with the advertising department.
4) Coordination with sales department:- Sales
promotion program can be successful if a proper exhibition is established with
the sales department. Its includes arranging and organizing sales meetings and
conferences, organizing contest, sales exhibition, traveling to sales personal
etc.
Q. What are the needs for evaluation of sales
promotion program? Discuss the methods of evaluations of sales promotion
program.
OR
Discuss the needs for evaluations of sales
promotion program.
OR
Why the need arises for evaluations of sales
promotion program? Explain.
Ans.-
Though almost all companies resort to sales promotion techniques , only some of
them follow it in a planned way. The conditions for the success of sales
promotion program are as follows:-
1. Identify the requirement – The firm needs to
find out. It is to bring in substantiate extra sales immediately. It is to
offered accumulated stocks ? It is to regain loosing consumer interest in the
Product/ Service etc.
2. Identifying the right promotion program-The
firm has to select the program suitable for current need & situation the
choice of the firm should be deducted according to the resources available with
the firm.
3. Enlisting the involvement of salesmen- Often
sales promotion program are conceded & planned at the head office . But for
the campaigns to succeed, it is essential that the salesmen be briefed on the
contest & contest of the program. They have to be informed of their roles
in the conduct of the program.
4. Enlisting the support of the dealers:- It is
also essential to enlist then support of the dealers in any large scale sales
promotion venture. Since the major part of the activity is around the dealer
shop, the pop material and the Product/ Service under campaign will get the
required prominence. Only if the leader so dealeBDT
5. Enlisting the advertisement agency’s support:-
The adevertising agencies support is also essential for the successful working
of a sales promotion campaign. carrying out a sales promotion campaign is as
challenging as conditioning an advertising campaign. So companies while
commetting heavy finds for sales promotion make it a point ensure that that
they benefit from the experience and experlise of their agency.
6. Timing of the campaign:- The sales need of the
company is the prime factor that desides the timing. But the firm has to
eansider factors like seasonality of purchase of Product/ Service.
Need for
evolution:- The need for evaluating the sales promotion programs are-
1. Identifying growth and development
opportunity.
2.Taking correction steps in case of any draw
back.
3.To measure the effectiveness and achievements
of objectives.
4.Facilities for future planning.
5.To encourage for research & innovations.
6.To motivate the employees into have
contributor.
7. to know the maturity limit of sales promotion
program.
8.To study new & modern tools of promotion.
9.To get allocated maximum budget for sales
promotion.
Methods of evalution:-
1. Sales data method- This method is a widely a
accepted practice. In this method , sales volume or market share prior to any
sales promotion techniques are measured . Eg. If market share of a Product/
Service before the introduction of sales promotion is 4% , during the period
10% & immediately after the program 6% ,Thus giving an increase of 8%.
Showes that new customers are created by the sales promotion program.
2. Consumer panel data- This technique help to
identify that how the customers have been motivated by the sales promotion
technique for longer purchase . How much quality have the customers purchased
& What were the charges of their buying behavior after the sales promotion
program. This technique help to identify the various classes of customers on
new or old customers / women / men / industrial / general customers etc.
3. Consumer surveys- This method collects various
kinds of information about the customers so as to analysis the effectiveness of
sales promotion. The analysis of suchinformation help to know following things-
1) The numbers of customers who have remembered
the techniques used.
2) The views opinion about these techniques.
3)How these technique have been helpful in
influencing the buyer’s behavior & brand chore of customer?
4)Do the customer require any innovation to be
differed in the Product/ Service?
5)Do these techniques improve the image of the
firm?
6)Do they feel like using these techniques
through the year?
4. Experiment methods- The effectiveness of sales
promotion technique may be measured by experimenting them in selected markets.
However there can be certain difficulties. They are as follows-
1) The consumer always looks for deals customers
are interested only in the purchase in the items Which offer certain additional
incentive with that of the Product/ Service.
2) The promotional tools at times can be very
costly as, if the organization does not get expected results. Then the price of
Product/ Service may be increased.
3) The cooperation from middlemen might not be
smooth.
Q. Define
sales forecasting? Discuss the produce & the methods of sales forecasting.
Ans.
Sales forecast is the basis of corporate planning forecasting is a systematic
attempt to Product/ Service the future on the basis of known facts. It is the
result of numerous assumption made about the external and internal environment
of firms.
Sales forecasting is the estimate level of
the company sales based on chosen marketing plan and assumed marketing
environment.
OR
Sales forecasting is the climate of sales during
some specific future period time & under a pre determined marketing plan of
the firm.
Important
–
1. it is the foundation of planning.
2. Companies uses the sales forecast to allocate
resource across different functional areas.
3. It is the key factor in all operational
planning throughout the company.
4. It serves as a base for sales force planning.
5. It plays a major role in the success of the
organization.
6. It is the key to sales management.
7. It helps in profitability of the firm
8. It helps in facilitating Product/ Service ion
planning
9. It helps in better financial planning.
10. It is developing sales strategies and
promotional plans
11. It helps in suggesting R & D.
12. Also helps in better inventory control &
sales quota determination.
Process of sales forecasting :-
Determination of goals – The sales manager should
decide the goals for sales forecasting. The objectives may include
determination of sales publicity programme, marketing methods, sales quota
determination, estimation of working capital etc. Determining the factors
affecting sales – The controllable factors are like marketing & advertising
policy, organization structure etc. & the non controllable factors like
political & social systems, seasonal fluctuations etc. must be determined.
Selection of techniques – Suitable methods for sales forecasting must be
selected keeping in view the objective time intervals resources and nature of
the firm. Correction of data – This is the step of collecting various kinds of
information’s & data related with future demands of Product/ Services. Analysis
of market potential –
The next step is to analyze the data of market potential.
Analysis requires two steps>>
a) Select the market associated with Product/
Service demand.
b) Eliminate those market segments that do not
contain prospective business.
Forecasting
of future sales:-
Sales projection should be made for an entire
Product/ Service line or for an individual Product/ Service or for companies
total market or individual market segment.
Making
operational programme & the budget:-
The firm determines the requirements for various
operational activities such as Product/ Serviceion purchasing marketing capital
assets. On the basis of forecast the related plans such as sales budget sales
quotes sales publicity and material acquirement are formulated Derivation of a
sales volume objectives:-
A sales volume objectives for the coming
operative period is hoped for the outcome of a company’s short range sales
forecasting procedure, The sales volume should be consistent with managements
profit aspirations and the companies market capabilities.
Evaluation
& revision of forecasts:-
The sales executives should evaluate the
forecasts carefully. The company should examine all the assumption on which it
is based. The company should the forecasting process periodically. The first
step in the review is to determine the accuracy of past forecasts to learn if
changes are needed in the way forecasts are made if the company finds that
sales forecasts are significantly different from actual sales in the period it
should undertake a review of the sales forecasting process.
Techniques
of sales forecasting:-
I. Survey methods:-
a) Executive opinion
b) Prudent manager forecasting
c) Delphi method
d) Sales force composite
e) Detecting differences in figures
f) Survey of buyer intention
g) Product/ Service testing and test marketing.
a) Executive opinion – It consists of obtaining
the views of top executives regarding future sales. The forecasts made by
executives are arranged to yield one forecast for all executives or the differences
are reconciled through discussion.
b) Product/ Service manager forecasting – In this
method the company personnel are asked to assume the position of purchasers in
customer companies. They must then look at company sales from a customer’s view
point & prudently evaluate sales.
c) Delphi method
– This method begins with a group of knowledgeable individuals estimating
future sales. Each person makes a prediction without knowing others in the
group have responded. these estimates are summarized. Now knowing how the group
responded. They are asked to make another Product/ Serviceion on the same
issue. This process of estimates & feedback is continued for several
rounds. In final round involves face to face discussions among the
participants.
d) Sales force composite – This method is based
on collecting an estimates from each salesperson of the Product/ Services they
expect to sell in the sale forecast period. The estimate may be made in
consultation with sales executives and customeBDT
e) Detecting differences in figures method – In
this method the sales person produces figures broken down by Product/ Service
& customers and the area manager produces figures for the sales persons
territory. They then meet & must reconcile any differences in figures. the process
proceeds with the area manager producing territory by figures.
f) Surveys of buyer’s intentions – This method
consist of contacting potential customers & questioning them about whether
or not they would purchase the Product/ Service at the price asked.
g) Product/ Service testing & test marketing
– This technique is of value for new or modified Product/ Services for which no
previous sales figures exists & where it is difficult to estimate. Likely
demand. It involves placing the pre Product/ Serviceion model with a sample of
potential users beforehand & noting their reactions to the Product/
Service. Test marketing involves the limited launch of a Product/ Service in a
closely defined geographical test area.
II.
Mathematical methods :-
a) Moving average technique – Simplest way to
forecast sales is to predict that sales in the coming period will be equal to
sales in the best period. This forecasts assumes that conditions in the last
period will be same as the conditions in the coming period.
SALES t+1 salest + salest-1 + sales + s…………………
salest-n
SALESt+1 = Forecasted sales
SALESt = Sales in the present period.SALESt+1 =
Sales in the period immediately past.
b) Exponential smoothing models – It is a type of
moving average that represents a weighted some of all past numbers in a time
series. with the heaviest weight placed on the most recent data.
c) Regression analysis – This technique is used
to project sales trends in the future. The sales plotted are for each past time
period. It determines and measures the associations between the sales &
other variables.
d) Projection of past sales – It takes a variety
of forms. · To set the sales forecasts for the coming year at the same figure.May be moving average of the sales figures for
several past yea BDT
e) Time series analysis – It is a statistical
procedure for studying historical sales data this process involves measuring 4
types of sales variations – long term trends, cyclical changes, seasonal
variations & regular fluctuations. Then a mathematical model about the past
behavior of the series is selected assumed values for each types of sale
variation are insisted and sale forecast is made.
f) Market factor analysis – Market factor
analysis determines market factors & measures their relationships to sales
activity.
g) Correlation analysis – This method takes in to
account the association between potential sales of the Product/ Service and
market factor affecting its sales.
h) E-charts – this technique is furtherance of
moving average technique. It also shows the monthly sales & cumulative
sales.
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