Marketing Aptitude Study Material – Sales Promotion

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Promotion

Promotion is one of the primary elements used in the marketing mix. As a key marketing element, promotion comprises communication tactics used to educate consumers, increase demand and differentiate brands.

“Promotion is the means by which firms attempt to inform, persuade and remind consumers-directly or indirectly about the products and brands they sell. ”                        —Kotler and Keller

Objectives of Promotion

• To inform people about particular issues.
• To introduce new products to the market.
• To compete with competitors products.
• To improve the company/brand image.
• To increase sales.

Importance of Promotion

•  It can boost sales during the year when sales are traditionally low (encourage off season purchases).
• It encourages people to try a product.
•  It encourages people to buy a product or the product in greater quantities.
• It encourages people to buy a product instead of competitors products.

Promotion Mix 

Promotion mix is a specific combination of promotional methods used for one product or a family of products. In other words, promotion mix refers to combination of promotional tools used by an organisation to achieve its communication objectives.

Elements of Promotion Mix

The main elements of promotion mix are

1.  Advertising: Advertising communicates a message to a targeted a audience and generates feedback in the form of a sale.
2. Personal Selling: Marketing impacts personal selling and improves the selling environment by increasing exposure to potential customers.
3. Sales Promotion: It stimulates market demand, product availability and coordinates public selling, advertising and public relations.
4. Public Relations: It is the management of a message between an individual or organisation and the public.
5. Social Media: It is versatile, far-reaching, fast, inexpensive, fosters brand awareness and can improve customer service.
6. Direct Marketing: It goes direct to customer via telephone, mail, fax, etc.

Factors Affecting Promotion Mix

• Budget available
• Stages in product life cycle
• Type of product
• Type of purchase decision
• Target market characteristics
• Consumer s readiness to purchese
• Consumers preferences for media
• Regulations
• Competitors
• Availability of media
• Push vs Pull strategy

Sales Promotion

Sales promotion is one level or type of marketing, aimed either at the consumer or at the distribution channel (in the form of sales-incentives). It is used to introduce new product, clear out inventories, attract traffic and to increase sales temporarily.

The sales promotion targeted at the consumer is called consumer sales promotion. The sales promotion targeted at the retailers and wholesalers is called trade sales promotion.

Objectives of Sales Promotion

Some of the objectives of sales promotion are listed below

• Information to Customers: Sales promotion activities inform the potential buyers about the availability, features, use, etc of the product. Thus, it offers additional support to promotional activities like advertising, publicity and personal selling.
• Persuades Customers: Sales promotion activities aim at arousing customers interest in the products and persuading them to buy them.
• Increase in Sales Volume: The sales promotion schemes are a big help in boosting off-season sales and also in tempting the buyers to make quick decisions to purchase.
• Incentive to Retailers: The main objective of sales promotional activities is to offer promotional support to retailers. Incentive schemes help product in getting shelf-space for them in new retail outlets.
• Create Product Identity: Under Sales Promotion Programme, product identity is established by offering additional features and incentives for that particular product. This helps in building consumers preference for the specific products and brands.

Characteristics of Sales Promotion

Characteristics of sales promotion are as follows

1. Attractiveness: This is the degree to which the consumer perceives the promotion as being desirable.
2. Fit to Product Category: A promotion which has no relationship with the product is less likely to appeal to customers.
3. Reception delay: If the promotional gift or discount will not arrive for sometime, it is less attractive.
4. Value: High value promotions work better than low value ones, but it is the value as perceived by the customer which is important.

Importance of Sales Promotion

• It helps to increase sales in a competitive market and thus, increases profits.
• It helps to introduce new products in the market by drawing the attention of potential customers.
• When a new product is introduced or there is a change of fashion or taste of consumers, existing stocks can be quickly disposed off.
• It stabilizes sales volume by keeping its customers with them.
• The consumer gets the product at a cheaper rate.
• It gives financial benefit to the customers by way of providing prizes and sending them to visit different places.
• The consumer gets all information about the quality, features and uses of different products.

Difference between Advertising and Sales Promotion

Basis	Advertising	Sales Promotion
Objectives	Objective of advertising is to create a favourable consideration for the product.	Objective of sales promotion is to stimulate the consumers to buy the product.
Effect	It has a long-term effect.	It has a short-term effect and useful for increasing immediate sales.
Nature	Advertising is recurring in nature.	It is non-recurring and one time communication process.
Price	Expensive in most cases.	Not very expensive in most cases.
Suitable for	Medium to large companies.	Small to large companies.
Sales	Assumption that it will lead to sales.	Directly related to sales.
Purpose	Increase sales, brand building.	Increase sales.
Example	Giving an advertisement in the newspaper about the major products of a company.	Giving free products, coupons, etc.

Elements of Sales Promotion

• It is a part of promotional mix.
• It is an art and science both.
• It is a different form of advertising.
• It is a different form of personal selling.
• It contributes to selling.

Merits of Sales Promotion

1. Sales promotion is always very useful in new product launch.
2. Sales promotion activities are designed to supplement the personal selling and advertising efforts used by a firm.
3. Sales promotion activities attract attention of the people because of the use of incentives.
4. Sales promotion activities induce people to break away from their regular buying behaviour and try the new product.

Demerits of Sales Promotion

1. Frequently promoted brands in the product category, especially on the basis of price, make consumers and traders more price sensitive, not only for the promoted brand, but for other brands as well in the same product category.
2. Sometimes, use of sales promotion tools may affect image of a product. Consumer may start suspecting that perhaps the product has not been selling well or think that the product has become outdated.
3. Sales promotions are generally for a short duration. Sometimes, it has negative effects on long term future of the organisation. Promotions generally build short-term sales volume which is not maintained.

Tit – Bits

• Marketing communication mix involves personal selling and advertising, sales promotion, public relation, publicity.
• DSA stands for Direct Selling Agent. A DSA is required to be adopt in communication skills.
• Telemarketing campaigns are resorted to avoid face-to-face interactions.
• A ‘lead’ means an interested buyer.
• A cold call means calls made without prior appointment
• Sales process begins with lead generation.
• The meaning of conversion’ in terms of sales is converting perspective customers into purchasers.

Check Your Skills

1. Effective selling skills depends on [SBI PO 2013; PNB Clerk 2010]

1. number of languages known to the DSA
2. data on marketing staff
3. information regarding IT market
4. knowledge of related markets
5. ability to talk fast

2. Which of the following is are examples of the popular sales promotion activities?

1. Buy one get one free
2. Customer relationship management
3. Merchandising
4. Free samples
5. All of the above

3. Leads can be best sourced from [SBI PO 2013]

1. foreign customer
2. yellow pages
3. dictionary
4. list of vendors
5. local supply chains

4. A Direct Selling Agent (DSA) is required to be adopt in [SBI PO 2013]

1. surrogats marketing
2. training skills
3. communication skills
4. market research
5. OTC marketing

5. Sales promotion may be effective, when ……. techniques are used.

1. advertising and salesmanship
2. pricing
3. BEP
4. EOQ
5. All of the above

6. Post-sales activites include [SBI PO 2013]

1. sales presentation
2. customer feedback
3. customer identification
4. customer apathy
5. product design

7. ‘Benchmark’ mean [SBI Steno 2012; PNB Clerk 2009]

1. sales performance measurement
2. marks given to sales perosns
3. appraisal
4. standard value for comparison
5. automation

8. Communication skills in the case of a DSA means [SBI Steno 2012]

1. giving lengthy speeches
2. sending good SMS messages
3. being talkative
4. ability to convince the customer with the right choice of works
5. being multi linguist

9. The sales promotion targeted at the consumer is called

1. consumer sales promotion
2. trade sales promotion
3. retailer sales promotion
4. wholesaler sales promotion
5. None of the above

10. Effective communication skills are not required in marketing if

1. demand exceeds supply
2. supply exceeds demand
3. buyer is illiterate
4. seller is illiterate
5. None of the above

11. The sales promotion can be directed at

1. customer
2. sales staff
3. distribution channel members
4. AH of the above
5. None of the above

12. Free samples are given to consumers to

1. introduce a new product
2. expand the market
3. Both ‘1’ and ‘2’
4. target the profit
5. target the market

13. Direct marketing means [SBI, steno 2o12]

1. seminars and conferences
2. face-to-face selling
3. banners
4. cold calls
5. sales presentations

14. The sales promotion targeted at the retailers and wholesalers is called

1. consumer sales promotion
2. users sales promotion
3. primary sales promotion
4. trade sales promotion
5. tertiary sales promotion

15. The most essential quality of a good sales person is [SBI Steno 2012]

1. questioning skills
2. good appearance
3. production skills
4. good communication
5. curiosity

16. Which is the benefit of sales promotion?

1. Thrill in life due to contests
2. Skill development of the users
3. Low price product
4. Social life changed
5. All of the above

17. After sales, service is not the job of [SBI Clerk 2009]

1. marketing staff
2. sales persons
3. directors of the company
4. employees of the company
5. All of the above are false

18. A DSA’s (Direct Selling Agents) main job is [SBI Steno 2012]

1. to design products
2. to sell to the target group
3. to do market survey
4. to distribute profits
5. to earn incentives

19. Telemarketing campaigns as are resorted to [SBI Steno 2012]

1. avoid face-to-face interactions
2. avoid ‘buyer resistance’
3. reach a larger clientele
4. increase cold calls
5. reduce profits

20. A ‘lead’ means [SBI Steno 2012; PNB Clerk 2009; SBI Clerk 2008]

1. a leash
2. a leader
3. an interested buyer
4. a DSA
5. a cold call

21.The aspects of the promotional mix include

1. advertising
2. personal selling
3. publicity
4. sales promotion
5. All of these

22. The consumer sales promotion technique includes

1. price deal
2. loyal reward programme
3. cents-off deal
4. price pack deal
5. All of the above

23. One of the following is not required in a good sales person. Find the same [SBI Recruit 2012]

1. sympathetic approach
2. good communication skills
3. courteous nature
4. persuasion skills
5. perseverance

24. A cold call means [SBI Steno 2012; SBI Clerk 2008]

1. a futile exercise
2. calls made in cold countries
3. sales talk
4. old product with new wrapping
5. calls made without prior appointment

25. An audio or video advertising announcement usually presented on television, radio or in a movie theater is called [SBI Clerk 2012]

1. publicity
2. creative
3. banner
4. sponsorship
5. commercial

26. The trade sales promotion technique include

1. trade allowance
2. dealer loader
3. trade contest
4. push money
5. All of these

27. Sales promotion devices for sales force is are

1. more commission for more selling
2. bonus
3. contests
4. All of the above
5. None of the above

28. Major consumer promotion tools are

1. samples
2. coupons
3. cash refund offers
4. Premiums
5. All of these

29. Inviting prospective purchasers to try the product without cost in the hope that they will buy is known as

1. patronage awards
2. free trials prizes
3. price packs
4. None of these

30. Full form of DSA is [SBI Clerk 2011; PNB Clerk 2010]

1. Delivery Staff Agency
2. Direct Selling Agent
3. Direct Supplier Agent
4. Distribution and Supply Age
5. Driving Sales Ahead

31. The meaning of‘conversion’ in terms of sales is [SBI Clerk 2011]

1. designing new products
2. converting purchaser into sellers
3. converting sellers into purchasers
4. converting perspective customers into purchasers
5. conversion of religion

32. Sales promotion means

1. any steps that are taken for the purpose of obtaining or increasing sales
2. pricing
3. profit
4. production cost
5. loss

33. The sales process begins with [SBI Clerk 2011]

1. customer identification
2. lead generation
3. sales presentation
4. sales closure
5. sales meet

34. Marketing communication mix involves

1. personal selling and advertising
2. sales promotion
3. public relation
4. publicity
5. All of the above

35. Which of the following is are example of the popular sales promotion activities?

1. Vouchers and coupons
2. Joint promotions
3. Discounted price
4. Free gifts
5. All of the above

36. Find the correct sentence. [PNB Clerk 2010]

1. higher the price, higher are the sales
2. more sales persons lead to more sales
3. mission statement is part of a Market Plan
4. better sales incentives means better performance
5. all customers are profitable customers

37. Which is are the functions of sales promotion?

1. Stimulation of consumers
2. Help to middlemen
3. Aid to salesmen
4. All of the above
5. None of the above

38. Which of the following is are the objective of sales promotion?

1. Information to consumers
2. Increase in sales volume
3. Creating product identity
4. All of the above
5. None of the above

39. The objectives of promotion are to inform persuade or remind consumers of the companys

1. wage and salary administration
2. marketing mix
3. product mix
4. style
5. gift

40. Promotion in marketing means [SBl Clerk 2009]

1. passing an examination
2. elevation from one one grade to another
3. selling the products through various means
4. selling the product in specific area
5. All of the above

41. Promotion encompasses all the tools in the marketing mix whose major role is

1. research and development
2. persuasive communication
3. market
4. sales
5. gift

42. Which is are tools of sales promotion?

1. Bonus
2. Coupon
3. Premium
4. Additional commission or purchase allowance
5. All of the above

43. Which of the following is one of the four aspects of promotional mix?

1. Sales promotion
2. Sales planning
3. Sales forecasting
4. Sales strategy
5. None of the above

44. A presentation means [PNB PO 2009]

1. display of products
2. explaining the utility of products
3. a gift
4. display of communication skills
5. All of the above

45. The sequence of a sales process is [PNB Clerk 2009]

1. a call, a lead, presentation and sale
2. a lead, a call, presentation and sale
3. presentation, sale, lead and call
4. presentation, lead, sale and call
5. sale, call, lead and presentation

46. Value added services means [SBl PO 2013, 12, 10, 09; SBl Clerk 2011; PNB Clerk 2009]

1. additional cost
2. additional production
3. additional staff
4. additional services
5. All of the above

47. Find the incorrect option. It sales promotion involves [SBl PO 2009]

1. building product awareness
2. creating interest
3. providing information
4. designing new products
5. None of the above

48. Source of sales leads are [SBl Clerk 2009]

1. date mining
2. market research
3. media outlets
4. promotional programs
5. All of the above

49. Effective selling skills depend on [SBl Clerk 2012]

1. good dress sense
2. territory allocation
3. sales call planning
4. good eye contact
5. pat performance

50. The performance of a sales person depends on [SBI Clerk 2012]

1. ability and willingness of the sales person
2. incentive paid
3. size of the sales team
4. team leaders attitude
5. his aggressive nature

51. Good public relations indicate [PNB Clerk 2009]

1. improved marketing skills
2. improved brand image
3. improved customer service
4. All of the above
5. None of the above

52. Team building is required [SBI Clerk 2009]

1. only for lead generation
2. only for after sales service
3. for cross selling
4. All of the above
5. None of the above

53. The performance of a salesperson can be enhanced by [SBI Clerk 2009]

1. increasing the sales incentives
2. increasing the number of products to be sold
3. appropriate training
4. All of the above
5. None of the above

Answer Key