In order to stimulate consumer purchasing, and dealer and sales force effectiveness in the short term, through temporary incentives and displays, sales promotion is designed (American Marketing Association). It is followed by a small fall in sales to below normal level because some consumers will have stocked up on the product during the promotion (Jobber, 2004).
There are several sales promotion techniques for increasing customer demand. Free samples and money off cause immediate benefit to consumer but it is very expensive way for the company. Also, encouraging repeat purchase by free premiums may require advertising support. Therefore a small business should consider its marketing budget, the stage of the product in its life cycle, the nature of competition in the market, and the target of the promotion. In addition, sales promotion can be an effective tool in a highly competitive market, when the objective is to convince retailers to carry a product or influence consumers to select it over those of competitors. Similarly, sales promotion is often used in the growth and maturity stages of the product life cycle to stimulate consumers and resellers to choose that product over the competition—rather than in the introduction stage, when mass advertising to build awareness might be more important. Finally, sales promotion tends to work best when it is applied to impulse items whose features can be judged at the point of purchase, rather than more complex, expensive items that might require hands-on demonstration.
As an example of successful sales promotion, Sony United Kingdom Ltd would be appropriate. Sony was a late entrant into IT market in 1998 and faced strong competition from established brands like Toshiba. For boost sales of laptops and desktops, Sony Ltd targeted school leavers, university students and their parents during the ‘back to school’ period with offering an added value promotion via redemption. As a result, a sales uplift of 35% was achieved during the promotional period against and expected figure of 10%. Also, Sony Ltd had raised its profiled as a supplier of IT products.
It is possible to find more examples because sales promotion is easy to be met with everywhere as major components of the marketing communication.
