Of all the methods of promotion that constitute the promotion mix, sales promotion is the only method that makes use of incentives to complete the push-pull promotional strategy of motivating the sales force, the dealer, and the consumer in transacting a sale.
There is no single universally accepted definition of sales promotion. One can, however, gather its essence by perusing a few definitions. Let us look at some of the popular definitions of sales promotion:
According to the American Marketing Association, sales promotion refers to:
‘those activities other than personal selling, advertising and publicity, that stimulate consumer purchasing and dealer effectiveness, such as display shows and exhibitions, demonstrations, and various other non-recurrent selling efforts not in the ordinary routine.’
This definition suggests that sales promotion is a catch-all for all those promotion activities which do not fall clearly into advertising, personal selling, or publicity.
Roger A. String offers a simple definition
‘Sales Promotion is short term incentives to encourage purchase or sale of product units or service.’
Yet another definition that seems fairly exhaustive, and hence, will be used in this unit is the one given by Stanley M. Ulanoff in his Handbook of Sales Promotion.
Stanley defines sales promotion as: ‘all the marketing and promotion activities, other than advertising, personal selling, and publicity, that motivate and encourage the consumer to purchase by means of such inducements as premiums, advertising specialties, samples, cents-off coupons, sweepstakes, contests, games, trading stamps, refunds, rebates, exhibits, displays, and demonstrations.
It is employed as well, to motivate retailers, wholesalers the manufacturer’s sales forces to sell through the use of such incentives as awards or prizes (merchandise, cash, and travel), direct payments and allowances, cooperative advertising, and trade shows.
It offers a direct inducement to act by providing extra worth over and above what is built into the product as its normal price. These temporary inducements are offered usually at a time and place the buying decision is made.
Summing up, sales promotion deals with the promotion of sales by the offer of incentives that are essentially non-recurring in nature. It is also known by the names of Extra-Purchase-Value (EPV) and Below-the-line-selling.
Like in other market economies, the use of sales promotion is catching on in Nigeria in terms of volume. The number of sales promotion schemes offered to consumers alone has grown by over seven times in the first three years of the eighties as against the average in the seventies.
The schemes offered at the dealer level also nearly doubled during the period 1978-79 and 1982-83. In terms of the expenditure incurred, large-size companies are stated to be spending between 40 and 50 percent of their advertising and sales promotion budget on this activity.
In terms of product groups, the major users of sales promotion are tea, coffee, and beverages, soaps, detergents and washing soaps, toothpaste, textiles, food products and baby foods, household remedies, and consumer durables like fans, refrigerators, sound systems, television, and other household appliances.
Among the various types of sales promotion schemes used, contests at the consumer, dealer, and sales force levels have made significant headway.
Why Rapid Growth?
A perusal of the list of the product groups which emerged as the major users of sales promotion, and from the market feel, it seems clear that a transformation from the seller’s to the buyer’s market is taking place and marketing has become more competitive in these product markets.
In addition to increasing competition, other reasons for the rapid growth of sales promotion as pointed out by some large-sized cooperating companies in surveys are summarized below:
Sales promotion makes an immediate effect on sales.
Measurement of the effectiveness of sales promotion is easier than other promotional methods.
Channels of distribution are emerging as powerful entities and demand greater use of incentives to get desired results.
Products are becoming standardized and similar, and so need increased support of non-price factors of which sales promotion is an important one.
Impulse buying is on the increase, and so is the rise in the number of marginal customers. With virtually no brand loyalty, an offer of attractive schemes helps manufacturers to induce such customers to choose their product.