Sales promotion is one of four major promotional tools available to marketers. It may be directed to consumers or to the trade. While it can be used alone, it is typically combined with advertising, personal selling and public relations. In developing guidelines for sales promotion, marketers need to determine a goal, target audience and how it will be integrated with the other devices.
In general, the goal of sales promotion is to give prospective buyers an incentive to change their behavior, like trying a new product or buying in greater volume than they otherwise would. Often it is used to motivate people to switch away from their regular brand. But sometimes the goal is to reinforce loyalty or particular behaviors that are helpful to the firm. For example, frequent purchasers of gourmet coffee beans could get discounts on coffee grinders or expresso machines.
Certain sales promotion devices are targeted exclusively to household consumers. Among the most popular are discount coupons, typically redeemable for about three months and available through mail, stores, websites and cell phones. Another type of time-sensitive price cut is a deal such as offering two boxes of a new detergent for the price of one. Loyalty programs, popularized by airlines and hotels, reward consumers with merchandise or other benefits that grow in value over time. Contests and sweepstakes can help to build excitement around a brand.
Targeting the Trade
Sometimes a marketer's biggest challenge is to build distribution. In established categories, wholesalers already carry large numbers of brands and may ignore a new product, while retailers give it poorly located, insufficient shelf space. Sales promotion targeted to the trade is designed to overcome these obstacles. For example, per-case discounts or rebates can stimulate wholesale orders. Merchandising allowances may motivate a retailer to do in-store advertising. Exhibiting at trade shows can get the attention of industry insiders.
When sales promotion is part of a multifaceted promotional campaign, marketers need to integrate the selling message and brand image across vehicles to avoid confusion. For example, a hotel should not be advertised as a family getaway if its loyalty program offers only corporate discounts. While it may be necessary to target consumers and trade buyers in different ways, marketers can often use one spokesperson and a single creative approach, like humor, in all venues.