QUESTION BANK

Subject: Advertising and Sales Promotion

Subject Code: BBA 308

Faculty: Dr. Dipti Jain

Unit 3 and Unit 4

Q1. What is Sales Promotion? What are the different types of sales promotion?

Ans. Sales promotion describes promotional methods using special short-term techniques to
persuade members of a target market to respond or undertake certain activity. As a reward,
marketers offer something of value to those responding generally in the form of lower cost of
ownership for a purchased product (e.g., lower purchased price, money back) or the inclusion of
additional value-added material (e.g., something more for the same price).

Sales promotions are often confused with advertising. For instance, a television advertising
mentioning a contest awarding winners with a free trip to Goa may give the contest the
appearance of advertising. While the delivery of the marketer’s message through television
media is certainly labeled as advertising, what is contained in the message, namely the contest, is
considered a sales promotion.

The factors that distinguish between the two promotional approaches are: 1. Whether the
promotion involves a short-term value proposition (e.g., the contest only offered for a limited
period of time), and 2. The customer must perform some activity in order to be eligible to receive
value proposition (e.g., customer must enter contest).

The inclusion of a timing constraint and an activity requirement are hallmark of sales promotion.
Sales promotions are used by a wide range of organisations in both consumer business markets,
though the frequency and spending levels are much greater for consumer products marketers.
One estimate by the promotion Marketing Association suggests that in the US alone spending on
sales promotion exceeds that of advertising.
Definitions of Sales Promotion

According to , “American Marketing Association (AMA,1960) “In a specific sense, sales

promotion include those sales activities that supplement both personal selling and advertising
and coordinate them and help to make them effective, such as displays, shows and expositions,
demonstrations and other non-recurrent selling efforts not in the ordinary routine”

As per AMA definition it is inferred that all those promotional activities, which don’t fall under
the category of personal selling, advertising and publicity, should be considered under the head
of sales promotion

Types of Sale Promotion

Consumer Oriented Promotions

Consumer will not make a distinction between trade promotions delivered at retail outlets, retail
promotions, and consumer promotions. If they see a special display in the store or have a coupon
or see a price special, they are not concerned with whether it was the brand or the retailer that
was responsible. But, from the brand’s perspective, there is a world of difference. Consumer
promotions are initiated by the brand, not the retailer, and the brand controls the content.

There are six fundamental consumer can be considered: coupons, refund and rebates, sampling,
loyalty sweepstakes and premiums.

1. Coupons: - A coupon is a price reduction offer to a consumer. This could be a

percentage off on the retail price of the merchandise or an offer for the future. Coupons
can be of various kinds, each with a specific objective. Instant redemption coupons can
be redeemed with a purchase to reap the benefit instantly. Some coupons are offered after
a purchase has taken place for a repeat purchase. Such a coupon can be given at the time
of delivery or could be in the package.
2. Refunds and Rebates:- This scheme offers 100% refund in case of dissatisfaction after a
purchase. Rebates can be a one-time purchase or could be a coupon issued for the next
purchase. This ensures that the shopper returns for the second purchase to avail of the
rebate. Fast food giants use this scheme often.
3. Sampling:-Giving people free samples or trial pack is another promotional technique and
is an excellent way to get consumers to try a product. This form of consumer promotion
is found to be especially useful when one is introducing a product for the first time. It is
commonly used in the case of fast moving consumer goods such as detergent, soft drinks,
confectionaries etc. In this case a small quantity of the product is given as a sample.
These samples are distributed either at the residence of the consumer or even at the retail
outlet. Today some of the companies are attaching the samples to the popular magazines
targeted on the group or with some of the products of the company’s product range.
4. Loyalty Programmes:- Loyalty programmes are initiated by companies to express their
bond with loyal customers. Loyalty points are added by airlines, credit card companies.
Indian Airlines have loyalty programme ‘frequent flier’ offer for those flier who
continuously purchase Indian Airlines tickets.
5. Contests and Sweepstakes: - These schemes offer a chance for participants to get
something for nothing, based on some sort of skill or ability. These are run to create an
excitement amongst the target segment. Sweepstakes require that participants submit
their names which are included in a draw or other chance selection. Contests are normally
advertised extensively and test more often than not the knowledge of the consumer on the
product or some other skill. For example, contest may involve completion of sentence
which might say” I like this product because…….” or it could involve developing a
slogan.
6. Premiums: - These are prizes, gifts, and special offers that the consumers are offered at
the time of purchase. Getting a fairness cream along with face wash could work as an
attractive premium for women or a hair conditioner with shampoo. Premium can be of
varying kinds, including in-mail premiums. In case, the prospect is required to send proof
of the purchase to receive the gift. Sometimes the agent may 185 even bring the entry
form. Many magazines have subscription schemes that offer various premiums such as
pen sets, sun glasses, planners, etc

Retail Promotion Techniques

1. Price Off: This kind of promotion offers a consumer a certain percentage discount
that is generally reflected on the price tag. The old price is crossed out and the
 discounted price stamped in to assure the customer of the value transfer on purchase.
A price off is simple and attractive phenomenon and attracts prospective buyers.
Price-offs is generally announced with end-of-season sales, especially at places that
experience strong variation between winters and summers for instance. It makes sense
for marketers to dispose of merchandise in the same season rather than store them for
the next year, which costs money; besides’ fashion may change by then.
2. Displays and Point-of-Purchase Material: Point of purchase (POP) displays is an
important promotional tool because they can help a manufacturer obtain more
effective in store merchandising of products. Pointof-purchase displays are very
important to marketers since many consumers make their purchase decisions in the
store. In fact, some studies estimate that nearly two-thirds of consumer’s buying
decisions are made in retail store. Thus it is very important for marketers to get the
attention of consumers, as well as to communicate a sales or promotional, messages
through POP displays. Many companies run display contest in order to get good
exposure for their products, particularly during the seasonal period, Dealers are
expected to buy a minimum quantity of stock during the display period and display
them prominently in the show windows of the shop and in other prominent places.
Company representatives then visit their shops and judge these display and award
prizes to them.
3. Point-of-sale material: Trades are given attractive point-of-sale material for
displaying the company’s product. For example coca cola gives attractive cold
storage refrigerator for its product; Cadbury’s give attractive dispensers, etc.
4. Cooperative Advertising The final form of trade-oriented promotion we examine is
cooperative advertising, which involves the sharing of cost of local advertising by the
dealer and the company. The dealer then has the name of the outlet printed below the
advertisement and gets mileage in terms of consumer enquiries. The most common
form of cooperative advertising is the trade-oriented form, vertical advertising, in
which a manufacturer pays for a portion of the advertising a retailer runs to promote
the manufacturer’s product and its availability in the retailer’s place of business.
Manufacturers generally share the cost of advertising run by the retailer on a
percentage basis (usually 50/50) up to a certain limit.
 5. Trade Oriented Promotions

Trader promotion takes up a significant proportion of most marketing communication

budgets. Whether the promotion directly affects pricing or indirectly affects volume
through merchandising material, the trade views trade promotions from the manufacturer
as a way to move more money to its bottom line. Trade promotions are those that a
company runs to elicit better and quicker response from the trade. These can be done
when introducing a new product. To ensure enhanced stocking proceeding a good season,
or to block a competition. Trade promotions are normally part of a push strategy, the
assumption here being that if the trader has excess stock bought during a trade scheme he
will be motivated to push the product in order to recover his investment as soon as
possible. Trade promotion is designed to improve relations with the trade in order to gain
and hold new distribution, to build inventory with the trade, or to obtain trade cooperation
and merchandising support.

There are three basic categories of trade promotion that can be considered are:
allowances promotions, display material promotions, and trade premiums and incentives.

➢ Allowance promotions provide the trade with a monetary allowance of some kind in return for
buying or promoting a specific quantity of a brand, or for meeting specific purchase or
performance requirements.

➢ Display material promotions are when the manufacturer actually provides special display
material to be used in featuring the brand, often in conjunction with a trade allowance.

➢ Trade incentives are special gifts or opportunities to earn or win valuable trips or prizes in
return for purchasing specified quantities of the brand or meeting specific sales quotas

6. Allowance Promotion The type of allowance offered to the trade can take many forms:
everything from reduced prices across the board, to reduce prices according to purchase
volume, to free goods.

7. On-Consignment Sales This tool is normally used by companies that are new entrants and
are not known in the market place. Such companies encourage the trade to stock their product
on an “onconsignment” basis and pay only when the products move off the shelves. This is a
rather risky process and companies would do this only on a selective product and only with
such traders who have excellent credential in the market place.

8. Dealer Contests This is normally linked to the amount of merchandise the dealer
purchases. Participating dealer are ranked across the region by the volume of sales in a
particular time frame and get substantial gifts which may include car, refrigerator, TV sets or
even a trip abroad for them and their family.

9. Dealer Gifts Some companies regularly give gifts to their dealers to maintain good
relations with them. These could be wall clocks, calendars, diaries even some items for
personal use at home. Shop Board Painting Some companies such as the Samsung provide
attractive signage for shops which could either be printed or made of acrylic material.

10. Dealer Discount: Many companies run trade scheme, which can be in the form of
discount on bulk purchases or free goods such as “buy ten get one free.”

11. Trade fair participation: Sometimes companies fund partly or fully the participation of
their exclusive dealers to trade meets such as the Inside Outside Fair, in India International
Trade Fair, etc. They also provide promotional materials for display. Dealer Meets Some
companies organize regular dealers meet at exotic locations within or outside the country.
The expense for such dealers meet is normally paid for by the companies. These dealer meets
recognize star performers through awards and also set target for the coming year.

12. Display Material Promotion Display material can be in the form of either a display
allowance or actual merchandising material. Perhaps the primary use of display promotions
is to help reinforce consumer promotions, although they also play an important role in the
introduction of new products and line extensions. Given that many purchase decisions are
made at the point of purchase, especially with FMCG brands, display promotion can be an
important part of an integrated marketing communication programme. Good display material
leads to better attention, especially important for brands driven by recognition awareness.
Here you can appreciate the need of for a fully integrated programme.

Sales Force Promotion Technique

 Sales force promotion normally undertaken to stimulate the sales force to better
performance. This is also part of a push strategy because it results in better stocking at the
trade level. In some product categories it can also be part of pull strategy. For Example; In
the case of pharmaceutical business the trade stocking happens when prescriptions flow from
a doctor. The consumer, in this case the patient, does not have any say in the product that the
consumers, except perhaps in the case of an over-the-counter product. The sales force has to
do a good selling job at the doctor level and good stocking job at the trade level. So he not
only has to pull the product at the doctor level but also push the product at the trade level.
Any sales force promotion scheme developed for such a field force has to recognize this fact.
There are several ways for motivating the field force. some of the important tools are:

1. Incentive Scheme: Most sales force of today is incentivized in terms of their sales
performance. Performance bonuses are awarded for sales over the target. These are
normally worked out as a percentage increase over-and-above the budgeted sales.
2. Star Awards: Many companies recognize their start performers and reward them
handsomely. These could be a trip abroad for family or substantial cash rewards.
Some companies have functions where even the spouses of the star are invited for a
company paid holiday.
3. Sales Meet: Many companies organize sales meets in attractive places like Goa,
Kashmir, kodaikenal, etc. for their sales force. These are normally no holds barred
meets where the field force is able to let their hair down along with their senior
managers. This acts as a tremendous motivational pill for these young salesmen. At
these meets the targets for the subsequent period are also set.
4. Local ad Budgets: Some companies delegate advertising budgets to their sales staff.
They have authority to negotiate directly with their trade and local ad agencies and
release ads for their territory. They also get budgets for local trad4e fairs, sampling,
merchandising etc.
5. Promotional Aids: Most companies provide their field staff with promotional aids.
Pharmaceutical companies provide their representatives with attractive leather bags
and ties, FMCG companies provide them with T-shirts, caps etc
Q.2. Explain the relationship / Difference between Advertising and Sales Promotions. How
can these strategies be aligned to achieve marketing objectives?

Ans. Differences between Advertising and Sales Promotions

Parameters Advertising Sales Promotion

Builds brand awareness and long- Encourages immediate purchase or trial
Objective
term brand loyalty of a product
Time Horizon Long-term focus Short-term focus
Inform, persuade, and remind Stimulate immediate sales or consumer
Purpose
customers about the brand action
TV, radio, newspapers, social Discounts, coupons, free samples,
Tools Used
media, billboards contests, buy-one-get-one
Specific target segments (deal seekers,
Target Audience Mass audience
new customers, etc.)
Creates brand image and
Effect on Consumer Creates urgency and incentive to buy
preference
Usually high due to media buying Lower cost, but frequent expenses for
Cost
and production offers and discounts
Two-way interaction (via redemption of
Communication One-way communication
offers, participation in contests)
Measurement of Difficult to measure in the short Easy to measure due to immediate
Impact term response or sales data
Coca-Cola TV ads, Nike social Pepsi cashback offers, Flipkart Big
Examples
media campaigns Billion Day sales

Relationship between Advertising and Sales Promotion

 Complementary Tools: Advertising creates brand awareness and builds brand image,
while sales promotions provide an extra push to encourage trial or purchase.
  Reinforce Each Other: Advertising can publicize a sales promotion (e.g., TV ad
announcing a festival discount), and promotions can bring attention back to advertising
campaigns.
 Consumer Decision Journey: Advertising helps consumers recognize and prefer a
brand, while sales promotions drive them to act quickly and buy.

How to Align Advertising and Sales Promotions to Achieve Marketing Objectives

Marketing Role of Sales

Role of Advertising Alignment Strategy
Objective Promotion
Use ads to promote
Build Brand Create a consistent brand Offer incentives to
limited-time offers that
Awareness message and identity. encourage product trial.
align with brand image.
Provide discounts, Combine mass media ads
Increase Sales Inform customers about
bundles, or contests to with in-store promotions or
Volume Quickly promotions through ads.
encourage purchase. online flash sales.
Generate interest and Offer introductory Advertising drives
Launch a New
educate customers about discounts, samples, or awareness; promotions
Product
the new product. freebies. drive trial.
Strengthen emotional Loyalty programs, Promote loyalty rewards in
Build Customer
connection through exclusive member ads to retain and engage
Loyalty
storytelling ads. discounts. customers.
Use advertising to
Clear Excess Communicate clearance Offer price reductions,
announce sales promotions
Inventory sales or offers via ads. clearance deals.
effectively.

Example:

 Big Bazaar runs TV ads announcing Wednesday Bazaar discounts, attracting

customers to visit stores and make purchases.
 Amazon India advertises the Great Indian Festival on TV and digital, while offering
lightning deals and exchange offers during the event.
Q.2. Explain sales promotion with its nature and scope.

Ans. Sales Promotion is the marketing actions excluding personal selling, advertising and
promotion that provoke customer buying and dealer efficiencies like in the normal routine.
display shows, written description, trials and distinct non-current selling exercise not

The nature of sales promotion

 Short-Term Focus: Sales promotions are typically designed for short-term gains, aiming
to generate immediate sales or to influence consumer behavior within a limited period.

 Stimulating Demand: Sales promotions are used to stimulate demand for a product or
service, either by attracting new customers, encouraging existing customers to buy more,
or enticing customers to switch from competitors.

 Incentives: Sales promotions offer incentives to consumers or trade partners, such as

price discounts, free samples, or exclusive deals, to motivate them to make a purchase.

 Complementary to Marketing Mix: Sales promotion is one of the elements of the

marketing mix, alongside product, price, place, and promotion. It complements other
marketing activities and strategies by providing additional incentives to drive sales.

 Measurable Results: Sales promotions are often implemented with specific objectives
and measurable goals in mind, such as increasing sales volume, clearing out excess
inventory, or boosting brand awareness.

 Variety of Techniques: There are various techniques used in sales promotion, including
discounts, coupons, rebates, contests, sweepstakes, product demonstrations, and loyalty
programs. The choice of technique depends on factors such as the target audience,
marketing objectives, and budget.

 Competitive Environment: Sales promotions are frequently used in competitive markets

to differentiate products or services, attract customers' attention, and gain a competitive
edge over rivals.
  Seasonal and Cyclical Nature: Sales promotions may be tied to specific seasons,
holidays, or events to capitalize on consumer behavior patterns and increase sales during
peak periods.

 Brand Image: While sales promotions can help drive short-term sales, they should also
be aligned with the overall brand strategy to avoid undermining the brand's long-term
image or perceived value.

 Cost Considerations: Implementing sales promotions can incur costs for businesses,
including discounts on products, advertising expenses, and administrative costs.
Therefore, it's essential to carefully evaluate the cost-effectiveness of sales promotion
campaigns.

The scope of sales promotion

The scope of sales promotion encompasses a wide range of activities and strategies aimed at
boosting sales, increasing brand visibility, and influencing consumer behavior. Here's a
detailed look at the scope of sales promotion:

 Consumer Promotion: Consumer promotions target end consumers directly to

encourage them to purchase a product or service. This includes techniques such as
discounts, coupons, rebates, free samples, loyalty programs, contests, sweepstakes, and
product demonstrations.

 Trade Promotion: Trade promotions are aimed at intermediaries such as retailers,

wholesalers, and distributors to motivate them to carry and promote a product. Trade
promotions may include incentives like trade discounts, promotional allowances, free
merchandise, cooperative advertising, and sales training programs.

 Sales Force Promotion: Sales force promotions are designed to motivate and incentivize
the sales team to sell more effectively. This may involve bonuses, sales contests,
recognition programs, training workshops, and sales performance incentives.
 Product Promotion: Product promotions focus on promoting specific products or
product lines to increase sales. This could involve launching new products, highlighting
product features and benefits, offering product bundles, or cross-selling related products.

 Seasonal Promotion: Sales promotions may be tied to specific seasons, holidays, or

events to capitalize on consumer behavior patterns and increase sales during peak
periods. For example, promotions for back-to-school season, Black Friday sales, or
Valentine's Day promotions.

 Brand Promotion: Sales promotions can also serve broader brand-building objectives by
increasing brand awareness, enhancing brand perception, and fostering brand loyalty.
Brand promotions may involve sponsorships, cause-related marketing, experiential
marketing events, or brand ambassador programs.

 Online Promotion: With the rise of e-commerce and digital marketing, sales promotions
have expanded into the online realm. Online promotions include tactics such as email
marketing campaigns, social media promotions, affiliate marketing programs, online
contests, and digital coupons.

 Point-of-Purchase (POP) Promotion: POP promotions target consumers at the point of

sale, encouraging impulse purchases or upselling opportunities. POP promotion tactics
include displays, signage, shelf talkers, product demonstrations, and in-store sampling.

 Customer Relationship Management (CRM) Promotion: CRM promotions focus on

nurturing relationships with existing customers to encourage repeat purchases and
loyalty. This may involve personalized offers, loyalty rewards programs, exclusive
discounts for VIP customers, and special events for loyal customers.

 International Promotion: Sales promotion strategies may need to be adapted for

different markets and cultural contexts in international settings. This could involve
localization of promotions, understanding regional consumer preferences, and
compliance with local regulations.

 Measurement and Evaluation: Regardless of the type of sales promotion used, it's
essential to measure its effectiveness and ROI. This involves tracking sales metrics,
 analyzing customer response rates, conducting post-promotion surveys, and evaluating
the impact on brand equity and market share.

Overall, the scope of sales promotion is vast and multifaceted, encompassing various tactics
and strategies aimed at driving sales, enhancing brand visibility, and building relationships
with customers and partners.

Q.3. Explain the advantages, disadvantages, objectives and impact of sales promotion.

Ans. Promotion is the component of the marketing mix strategy that emphasizes the use of
various communication tools to promote the value of your company, products or services. While
much of promotion is focused on long-term communication objectives, sales promotions have a
specific motive of creating immediate sales.

Objectives of Sales Promotion

The following are the objectives of the sales promotion:

(a) To announce new products: Encourage customers to buy a new product, complimentary
samples may be dispersed, or money and stock allowance can be awarded to business reserve
and sell the product.

(b) To fascinate new consumers: New consumers can be fascinated by the allocation release of
complimentary samples bonus, contests and the same products.

(c) To encourage existing consumers to purchase more: Existing consumers can be

encouraged to purchase more by knowing more about a commodity, it's elements and uses.

(d) To help the company stay competitive: Sales promotion can be initiated to meet
competitions amongst companies.

(e) To raise sales in the off-season: Buyers can be inspired to use the goods created in the off-
season by displaying them the variations of uses of the products.

(f) To raise the stock of the business buyer: Retailers can be encouraged to maintain a stock of
more units of products so that mere sales can be enacted.
Advantages of Sales Promotion

It has the following advantages:

(a) Produces Immediate Sales: Because of this kind of sales promotion measures, people get
very excited to buy more. It generates excitement, and customer again wants to purchase the
product.

(b) Prevents Competitor Entry or Promotions: Any competitors who are trying to enter the
market and attain your market share cannot do so when you go ahead into sales promotion
because if they are already in an established darn, they are doing very well. On top of that, if you
come up with your offers in sales promotion measures, then the competitors cannot do anything
in this matter.

(c) Measurable Results can be produced: Measurable results can be produced because it is a
short-term event. Thus, the sales volume generated during your sales promotion period can be
easily measured.

(d) Helps to Gain Distribution Channel Support: A distribution channel is nothing but the
people involved in distributing your product. It could be a dealer, retailer, etc. Thus, you get to
put your product by using sales promotion tools as well. If you give discounts or deals to your
dealers, then they help you to sell your product, and 'this could benefit and increase your sales.

(e) Easy to Design and Implement: In advertising, there are so many costs involved, so many
competitors are involved, so it becomes challenging to decide what kind of advertisement should
you come up with and how it should be. Out in the case of sales promotion, it is relatively easier
to design and implement your activities; you can calculate your costs and their effects on the
sales accordingly.

Disadvantages of Sales Promotion

• It is for the short-term. • Excessive use of it can also harm the brand value. • It may create
confusion in the customer's mind. • Forward buying. • It attracts only price switches. •
Sometimes it gets mistreated by both merchant and customers.

Impact of Sales Promotion

Attract Customers: Sales promotions are typically used as a price inducement to attract price-
conscious buyers not interested in products a regular prices. This is common when companies
want to build a customer base, such as at a grand opening, when a competitor goes out of
business, or in a highly competitive industry. In some cases, sales promotions on one product,
known as a "price leader" or "loss leader," are used to get customers into the store so you can sell
them other, more profitable items.

Increased Revenue: Increasing revenue is a common goal for sales promotions. Often, sales
promotions restrict your profit potential, but they allow you to generate more revenue in the short
run due to increased sales volume. This also means more cash flow, which is why companies
struggling to meet near-term financial obligations often turn to discounts. To realize greater
revenue, you need more customers to buy more product at the reduced price.

Price Orientation: One of the more risky or negative effects of sales promotions is that they can
lead to a price orientation amongst customers. This is especially true if you overuse them or
maintain discounts for an extended period. Customers psychologically connect the promotion
price with the value of the product, and a price hike down the road may not work.

Inventory Reduction: Effective sales promotions lead to inventory reductions because

customers buy more products. In fact, this is why companies hold them regularly at the end of a
buying season. For example, when Halloween is over, you often see retailers discount decor and
candy to make room on the shelves for other products. While this often results in a gross loss on
the excess inventory, you at least get some revenue rather than throwing out expired or obsolete
products.

Q.4. Explain the strategies of Sales Promotion.

Ans.5. 1. Select the right target audience: The difficulty with any marketing campaign lies in
targeting who will eventually become loyal customers. Many marketers cast a large net to catch
customers by virtue of percentages. Their strategy is to contact enough prospects so that some of
them convert. A smaller percentage of those customers will become loyal customers.
This idea is inefficient, as only a small fraction of prospects and leads become buyers - and don't
necessarily offset the initial investment. Instead, by predetermining a target audience, businesses
can put their finite marketing resources to better use.

To understand the best target audience for your promotion, you first need to understand more
about the customers you have.

The same is true for sales promotion campaigns. To understand the best target audience for your
promotion, you first need to understand more about the customers you have. Send customers a
simple survey asking them about themselves. Offer an incentive that encourages them to take the
time and share their personal information.

Once you have a clear idea of who uses your product or service, identify exactly what kinds of
problems your product or service is designed to solve. Focus your sales promotion on those who
are most likely to be genuinely interested.

2. Set measurable goals

• Ask yourself what the most important objective of your promotion should be.

• Are you hoping to draw in new customers, or are you more inclined to focus on customer
retention?

• Do you want your customers to purchase more frequently, or would you like for them to
increase the average spend per purchase day?

• Are you attempting to increase your business during slower seasons or times of

• Are you interested in regaining the attention of former customers who have taken their business
elsewhere?

• Determine exactly what you want to accomplish with your sales promotion, then add a specific
number — one that is ambitious but achievable — to the goal. This will allow you to chart your
success or failure, and identify aspects of your campaign you need to change or develop.

3. Limit availability: Behavioral psychologists have found human beings tend to assign greater
value to things they perceive as being scarce. In a classic 1975 study, researchers had
participants assign perceived value to identical cookies located in two identical jars. The only
difference between the two jars was that one had 10 cookies, while the other had only two. While
there was no apparent difference between the cookies or the jars, participants assigned greater
value to the jar with two cookies.

Popular culture has also birthed "fear of missing out," popularly known as FOMO. This is
anxiety about missing out on an exciting event or rewarding experience that other people know
about.

4. Don't forget to promote your promotions: Your sales promotion is an effort to draw
customer attention to your organization's product or service. But what about drawing attention to
the promotion itself? For a promotion to be effective, your target audience needs to see it and
understand it.

Market or advertise your promotions like any other product or service. In-store signage, website,
blogs, social media, email marketing campaigns, text messaging, mobile apps, media releases,
brochures, and print and online advertising can all be effective ways to let prospective customers
know about your sales promotion.

Visibility is key. Just be sure to account for the marketing cost of promoting your promotion.
Otherwise, you might end up spending more on advertising than you'll make back through
increased sales. Focus on promotional strategies that have demonstrated return on investment
(ROI). For example, email marketing has a very high average ROI - $38 for each $1 spent.

5. Offer real value: When all is said and done, the customer is interested in just one thing from
your organization: value. If your sales promotion doesn't offer them real value, then all the
targeted marketing and limited-time offers in the world won't make your sales promotion a
success.

6. Review your results: Before you begin brainstorming your next big sales promotion, take
time to measure your results. Schedule a post-mortem on vour campaim to see how sales stacked
up against your goals. Be sure you're reviewing this at the right time in your sales cycle. As
customers' expectations of brands increase - along with competition for their wallets elsewhere -
ensure that customer experience is at the heart of every sales promotion you design. Look
beyond the traditional boundaries of marketing and break down organizational silos. Ensuring
your promotions have a personalized and real-time component is always a smart strategy.

Q5. a. How consumer oriented tools and techniques of sales promotion differs when applied
in B2C, B2B and Service settings?

b. How does sales promotion fit into the overall marketing mix?

Ans 6.a. Consumer-Oriented Sales Promotion Tools and Techniques: Differences in B2C,
B2B, and Service Settings

Sales promotions are widely used in marketing to boost sales, attract new customers, and
encourage repeat purchases. However, the way these tools are applied varies significantly
between B2C (Business-to-Consumer), B2B (Business-to-Business), and Service settings due
to differences in buying behavior, decision-making processes, and customer expectations.

1. B2C (Business-to-Consumer) Sales Promotion

Characteristics:

 Target Audience: Individual consumers.

 Buying Decision: Emotional, spontaneous, and influenced by impulse.
 Sales Cycle: Short and fast-paced.

Tools & Techniques:

Tool/Technique Description Example

Big Bazaar offering 10% off

Discounts/Price-Off Direct price reductions on products.
during festive sales.

Vouchers that provide a price Domino's coupons for ₹100 off on

Coupons
discount on next purchase. next pizza order.

Free Samples Small quantities given free to Shampoo sachets distributed with
 Tool/Technique Description Example

encourage trial. newspapers.

Buy One Get One Free Encourages higher volume Buy one T-shirt, get one free at
(BOGO) purchase. Lifestyle.

Encourage participation and Pepsi’s "Win a Trip to ICC World

Contests & Sweepstakes
engagement. Cup" contest.

Reward repeat customers with Payback points on Big Bazaar and

Loyalty Programs
points or benefits. BookMyShow.

Focus in B2C:

 Immediate sales boost.

 Encourage impulse buying.
 Build brand loyalty through repetitive engagement.

2. B2B (Business-to-Business) Sales Promotion

Characteristics:

 Target Audience: Businesses, wholesalers, or retailers.

 Buying Decision: Rational, strategic, multi-person decision-making.
 Sales Cycle: Long, with complex negotiations and contracts.

Common Tools & Techniques:

 Tool/Technique Description Example

Price reductions for bulk A wholesaler offering 10% off on

Trade Discounts
orders or early payments. bulk purchase of IT equipment.

Rewards for meeting sales Distributors of FMCG products

Incentives/Performance
targets or high-volume getting bonus margins for
Bonuses
purchases. achieving targets.

Extra products added as "Buy 100 units, get 10 units free"

Free Goods
incentives on large orders. for industrial suppliers.

Events to demonstrate
Auto Expo for commercial vehicle
Trade Shows and Exhibitions products and offer exclusive
deals.
deals.

Credit Facilities/Extended Offering flexible payment 60-day credit period for bulk
Payment Terms options to attract businesses. buyers of software licenses.

Sharing advertising costs Coca-Cola India co-sponsoring

Co-Op Advertising
with channel partners. ads for their retail partners.

Focus in B2B:

 Building long-term partnerships.

 Providing financial incentives and support.
 Encouraging large volume purchases.
 Reducing risk and increasing ROI for businesses.

3. Service Sector Sales Promotion

Characteristics:

 Target Audience: Can be either B2C (individual customers) or B2B (business clients).
 Intangibility of Services: Customers can’t evaluate services before consumption.
  Perishability: Service capacity can’t be stored for future use (e.g., hotel rooms, flight
seats).

Common Tools & Techniques:

Tool/Technique Description Example

Offering a limited-time free Free 1-month subscription to Hotstar

Free Trials/Demos
service to attract customers. Premium.

Introductory
Special rates for first-time users. ₹200 off on first ride with Uber.
Discounts

Rewards for frequent service Air India’s Flying Returns program

Loyalty Programs
usage. offering free flights.

Incentives for bringing in new

Referral Programs ₹100 Uber credit for referring a friend.
customers.

Offering a package of services Broadband + OTT subscription at

Bundling Services
at a discounted price. bundled rates by Airtel Xstream.

Guarantees and Money-back guarantees to "No questions asked" refund policy by

Warranties reduce perceived risk. UrbanClap (now Urban Company).

Focus in Services:

 Reducing perceived risk of intangible products.

 Encouraging trial and customer retention.
 Managing perishability by filling capacity (hotels, airlines, salons).

Key Differences in Application across B2C, B2B, and Services

Factors B2C B2B Services

Decision Emotional, fast Rational, slow, multiple Depends on customer type;

 Factors B2C B2B Services

Making decision makers risk reduction is crucial.

Can be short (salons) or long

Sales Cycle Short Long
(consulting services).

Promotional Immediate purchase, Volume purchases, Trust-building, reducing

Focus impulse buying partnerships risk, encouraging repeat use

Discounts, contests, Trade discounts, co-op Free trials, guarantees,

Tools Used
samples, loyalty cards ads, bonuses, credit terms referral programs, bundling

How Sales Promotion Strategies Are Aligned Across Settings:

 Customer Understanding: Knowing who the decision-maker is (individual vs. business)

helps choose appropriate tools.
 Purchase Drivers: B2C driven by emotion and convenience; B2B by ROI and value;
Services by assurance and experience.
 Sales Promotion Customization: Tools and techniques are tailored to fit the decision-
making process, perceived risks, and buying behavior of the target audience.

Example

 B2C: Flipkart Big Billion Day offering deep discounts on mobile phones.
 B2B: Infosys offering discounted bulk software licenses to partner companies.
 Services: Zomato offering ₹200 off on first food delivery order + Pro membership
rewards.

Ans. 6. B. Sales promotion is one of the key components of the promotional element within the
Marketing Mix (commonly referred to as the 4Ps: Product, Price, Place, and Promotion). It
plays a supportive but powerful role in complementing and enhancing the other elements of the
marketing mix. Here's a detailed explanation of how sales promotion fits into and supports the
overall marketing strategy:
1. Sales Promotion as a Part of Promotion in the 4Ps

The Promotion component of the marketing mix includes advertising, personal selling, public
relations, direct marketing, and sales promotion. Among these, sales promotion focuses on
short-term incentives designed to boost immediate sales or stimulate quicker buyer action.
While advertising builds long-term brand awareness and loyalty, sales promotion creates
urgency and immediate purchase motivation.

For example, a brand like Coca-Cola might run an advertising campaign to strengthen brand
image, but during festivals, it will offer discounts or combo deals (sales promotion) to boost
sales volume during peak seasons.

2. Role of Sales Promotion in Supporting the Product Strategy (Product Mix)

Sales promotion supports product strategy by:

 Encouraging product trials, especially when a company launches a new product. For
instance, free samples or introductory offers can motivate customers to try new personal
care products like Dove shampoo.
 Creating differentiation, helping to highlight the unique features or benefits of a
product compared to competitors.
 Clearing out older inventory when a company updates or upgrades its products, such as
offering heavy discounts on older smartphone models before launching a new version.

Thus, sales promotions can enhance the value proposition and drive customer adoption of
products.

3. Role of Sales Promotion in Supporting Pricing Strategy (Price Mix)

Sales promotions often work in alignment with pricing strategies:

 They allow businesses to offer temporary price reductions, cashback, or special offers
without permanently lowering the product price, which can protect the brand's
perceived value.
  Promotions like BOGO (Buy-One-Get-One) deals can make a high-priced product
more accessible in the short term.
 Brands like Big Bazaar or DMart frequently use limited-time price promotions to
position themselves as value-for-money options for price-sensitive customers.

Sales promotion helps companies attract price-conscious customers without eroding their
long-term pricing strategy.

4. Role of Sales Promotion in Supporting Distribution (Place Mix)

Sales promotion strengthens distribution strategies by:

 Encouraging retailers and distributors to stock, display, and promote products through
trade promotions like dealer incentives or bulk discounts.
 Supporting channel partner engagement by offering cooperative advertising
allowances and POP materials, which enhance product visibility at retail outlets.
 Speeding up product movement through the channel. For example, FMCG companies
like HUL or ITC often offer incentives to wholesalers to push more stock into the
market during peak demand seasons.

In this way, sales promotion stimulates the supply chain, ensuring products are available and
visible at the right time and place.

5. Role of Sales Promotion in the Promotional Strategy (Promotion Mix)

Within the promotion mix, sales promotion complements advertising, personal selling, public
relations, and direct marketing by:

 Driving immediate action, whereas advertising builds long-term brand equity.

 Supporting personal selling efforts by giving sales teams tools like discounts, samples,
and limited-time offers to close deals faster.
 Enhancing public relations campaigns by offering special promotions tied to events or
causes, such as donating a percentage of sales to charity during a campaign.
For instance, PepsiCo runs brand campaigns (advertising), engages in sponsorships (PR), and at
the same time offers discounts and combo deals (sales promotion) at retail outlets during
events like the IPL season, creating an integrated promotion strategy.

Unit-IV

Q.1. Discuss the various sales promotion strategies used by businesses to target consumers
(B2C), trade/channel partners (B2B), and their own salesforce. Explain how push and pull
strategies are integrated into these promotions, providing relevant examples from the Indian
market."

Ans 1. Sales Promotion Strategies

Sales promotion strategies refer to short-term activities and incentives aimed at encouraging the
purchase or sale of a product or service. These strategies are typically used to stimulate
immediate consumer response or boost the effectiveness of a marketing campaign. Sales
promotion can be targeted toward three primary groups: consumers (B2C), trade/channel
partners (B2B), and the company’s own salesforce.

1. Consumer-Oriented Sales Promotion Strategies (B2C) :

These strategies are directed at the end consumers to encourage them to make immediate
purchases or try new products. The goal is often to increase product demand, enhance product
trial, or retain customers. Common consumer-oriented sales promotion strategies include
offering discounts or price reductions that lower the selling price for a limited time, which makes
the product more attractive. Coupons are another popular tool, where consumers receive
certificates or codes that provide monetary benefits on future purchases. Companies may also
offer free samples to encourage consumers to try a product, which is common in the FMCG and
cosmetics industries. Contests and sweepstakes are engaging promotional tactics where
consumers participate in games or lucky draws, with the chance of winning prizes, generating
excitement and interaction with the brand. Buy-One-Get-One-Free (BOGO) offers are highly
effective in boosting sales volumes by providing additional value. Loyalty programs reward
repeat customers by offering points or exclusive perks, encouraging them to continue purchasing
from the brand. Cashback offers and rebates return a portion of the purchase price to the
consumer, often requiring them to submit a claim after purchase. Free trials or demos, often used
in service sectors like streaming platforms or software, allow consumers to experience the
service risk-free for a limited time.

2. Trade-Oriented Sales Promotion Strategies (B2B / Channel Partners)

These strategies are targeted at intermediaries such as wholesalers, distributors, and retailers.
The objective is to encourage these partners to stock and promote the company’s products more
aggressively. One common strategy is providing trade discounts, where intermediaries are given
a price reduction for bulk purchases. Dealer incentives offer rewards such as bonuses or gifts
when sales targets are achieved, motivating partners to increase their efforts. Stocking
allowances are payments made to retailers to encourage them to stock a new product or to
allocate more shelf space to a promoted product. Point-of-purchase (POP) displays are provided
to retailers, including branded stands, signage, or display units that help attract consumer
attention at the store level. Cooperative advertising is another strategy, where manufacturers
share advertising costs with retailers or distributors, helping to promote the product at a local or
regional level.

3. Salesforce-Oriented Sales Promotion Strategies

Salesforce-oriented promotions are aimed at motivating and rewarding the internal sales team of
a company. These strategies are designed to boost the productivity and morale of sales
representatives. Sales contests are competitive events where salespeople compete to achieve the
highest sales or to sell a new product, often with attractive prizes such as cash rewards or trips.
Performance bonuses are direct financial incentives given to salespeople for meeting or
exceeding sales quotas. Recognition programs, such as awarding "Salesperson of the Month," are
also commonly used to acknowledge and appreciate top performers, which fosters healthy
competition and job satisfaction. In addition, companies may offer training programs and career
development opportunities as rewards, especially for high-performing employees, to build their
skills and keep them motivated.

4. Push and Pull Strategies

Sales promotions can be aligned with broader push or pull marketing strategies. A pull strategy
focuses on creating demand directly at the consumer level so that consumers actively seek out a
product, pulling it through the distribution channel. Consumer-oriented promotions like
discounts, coupons, and advertising are part of this strategy. On the other hand, a push strategy
focuses on incentivizing intermediaries such as retailers and distributors to push the product
toward the consumer. Trade promotions like dealer incentives, trade discounts, and POP displays
are common tools in this approach. Some companies adopt a hybrid approach by combining both
push and pull strategies. For example, during festive seasons, companies like Samsung or LG
might offer cashback to consumers (pull) while providing dealer incentives to retailers (push) to
maximize their market penetration.

5. Event-Based or Seasonal Sales Promotions

These promotions are tied to specific events or seasons. During festive periods like Diwali or
Christmas in India, brands often launch special offers and discounts to attract customers. End-of-
season sales are another example where retailers clear old stock by offering deep discounts.
Flash sales, where products are offered at discounted rates for a limited time, create urgency and
encourage quick purchases. Designing an Effective Sales Promotion Strategy To design an
effective sales promotion strategy, businesses need to clearly define their objectives, such as
increasing short-term sales, introducing a new product, or entering a new market. Understanding
the target audience is crucial, as promotions aimed at B2C markets (like discounts and free
samples) differ from those for B2B settings (such as trade discounts and dealer incentives). It’s
important to choose the right promotional tools that align with the product type and the brand’s
image. Furthermore, companies must monitor and evaluate the effectiveness of these promotions
through measurable outcomes like increased sales volume, higher customer acquisition, or
enhanced brand loyalty. Examples from the Indian Market In India, brands have successfully
used these strategies. For example, Jio offered free data services to attract millions of customers
(consumer pull strategy). ITC provides trade schemes and volume discounts to its distribution
network (B2B push strategy). Zomato’s Pro membership offers regular users exclusive discounts
and perks (consumer loyalty strategy). During festive seasons, companies like Amazon and
Flipkart roll out extensive sales events combining consumer promotions with trade incentives.
Q2. Outline the planning, implementation and evaluation process of a retail promotion
campaign. What are the key steps consideration at each stage?

Ans 2.1. Planning Stage

Planning lays the groundwork for a successful retail promotion campaign. It involves setting
clear objectives, understanding the audience, selecting appropriate tools, and laying out the
logistics.

Key Steps in Planning:

 Define Objectives: Begin by clarifying what you hope to achieve with the campaign.
Common objectives include increasing store traffic, boosting sales of specific products,
clearing old inventory, or building brand awareness. Ensure that these objectives are
SMART (Specific, Measurable, Achievable, Relevant, and Time-bound).
 Identify the Target Audience: Understand who you are targeting. This includes
analyzing customer demographics (age, gender, income, etc.), buying behavior, and
preferences. A clear understanding of the audience helps in designing relevant and
appealing promotions.
 Budget Allocation: Set a budget for the entire campaign. Consider costs like advertising,
promotional materials, discounts, staff incentives, logistics, and contingency expenses.
Make sure the campaign delivers a return on investment.
 Select the Promotion Type and Tools: Choose the appropriate promotional techniques,
such as discounts, buy-one-get-one (BOGO) offers, loyalty programs, contests, free
samples, or in-store events. The selection depends on the product type, audience, and
objectives.
 Decide Timing and Duration: Plan the timing carefully to coincide with peak shopping
periods, festivals, weekends, or end-of-season sales. The campaign duration should be
long enough to create impact but short enough to maintain urgency.
 Legal and Ethical Considerations: Ensure that all promotional offers are compliant
with local laws and consumer protection regulations. Clear communication of terms and
conditions is crucial to avoid misunderstandings.
2. Testing Stage
Before rolling out the full campaign, a testing phase ensures that everything works as intended
and allows for adjustments.

Key Steps in Testing:

 Pilot Testing: Run the promotion in a single store, select region, or with a small
customer segment. Observe the response to the promotion, operational challenges, and
customer feedback.
 Check Systems and Processes: Test the billing systems, stock management, and any
technology integration (like coupon codes or loyalty point redemption) to avoid glitches
during the live campaign.
 Staff Readiness: Evaluate if the staff is well-trained on the campaign details. Make sure
they understand the offers, can handle customer queries, and follow the escalation
process in case of issues.
 Adjust Based on Feedback: Use insights from the test phase to fine-tune the campaign
elements. This may involve tweaking discounts, improving communication, or
reallocating resources.

3. Implementation Stage
This is the execution phase, where the promotion is launched across the targeted retail stores and
channels.

Key Steps in Implementation:

 Develop Creative Materials: Design and produce promotional materials like posters,
banners, digital ads, shelf talkers, and flyers. Consistency in design and messaging
strengthens brand recall.
 Staff Training and Briefing: Conduct thorough training sessions for sales associates and
floor managers. Ensure they can explain the promotion details confidently and assist
customers in availing of the offers.
  Store Setup and Merchandising: Arrange in-store displays, signage, and promotional
product placements strategically to catch customers' attention. Ensure adequate stock is
available for promoted items.
 Launch and Communication: Announce the campaign through marketing channels like
social media, emailers, SMS campaigns, newspaper ads, and in-store announcements.
Clear communication builds excitement and drives customer traffic.
 Monitor and Manage in Real-Time: During the campaign, track customer response,
monitor inventory levels, and address operational issues quickly. Be flexible and ready to
make on-the-spot adjustments if demand exceeds expectations.

4. Review Stage (During Campaign)

While the campaign is live, continuous review ensures the promotion stays on track and delivers
as planned.

Key Steps in Review:

 Monitor Sales and Footfall: Track daily sales data, foot traffic, and customer
engagement levels to measure interim performance against targets.
 Customer Feedback Collection: Gather customer feedback through surveys, online
reviews, and direct interaction to understand their experience with the promotion.
 Adjust Operationally: If problems like stock-outs, staff shortages, or customer
confusion arise, implement corrective actions quickly.
 Competitor Monitoring: Keep an eye on competitor activities during your campaign
period. If they run parallel offers, you may need to adjust your strategy to stay
competitive.

5. Evaluation Stage (Post-Campaign)

Once the campaign ends, a thorough evaluation helps understand its effectiveness and generates
learnings for future campaigns.

Key Steps in Evaluation:

  Measure Results Against Objectives: Analyze if the campaign achieved the initial
objectives. Review sales increases, inventory movement, customer acquisition, footfall
growth, and other KPIs.
 Return on Investment (ROI): Calculate the ROI by comparing the total investment in
the campaign with the revenue or profit generated from it.
 Customer Feedback Analysis: Analyze the feedback collected during the campaign.
Understand what customers liked, any challenges they faced, and their suggestions.
 Staff Feedback: Gather inputs from employees involved in executing the campaign.
Learn about operational difficulties, customer responses, and process improvements.
 Document Learnings: Identify what worked well and what didn’t. Document the
insights, strategies, and adjustments for future reference.

Example Scenario (Retail Fashion Store Promotion)

Imagine a retail fashion store running a "Festive Bonanza" campaign:

 Planning: The objective is to clear old inventory before the new season. Target audience:
middle-income families. Budget ₹5 lakhs. Promotional tool: Flat 50% discount + free gift
on purchases above ₹2000. Campaign duration: 15 days before Diwali.
 Testing: Pilot in two stores to check customer response and system readiness. Identify
the need for more sales staff during weekends.
 Implementation: Launch campaign in all stores, announce on social media and SMS.
Staff trained on offers and billing process. Ensure stock availability and create attractive
window displays.
 Review: Monitor daily sales. On weekends, deploy extra staff due to higher footfall.
Restock popular products mid-week.
 Evaluation: Campaign achieved 120% of the sales target, cleared 80% of old inventory.
Feedback suggested improving billing speed. ROI exceeded expectations.

Q3. Outline the planning, implementation and evaluation process of a manufacturer

promotion campaign. What are the key steps considerations at each stage?
Planning, Testing, Implementation, Review, and Evaluation of a Manufacturer Promotion
Campaign

1. Planning Stage
This is the foundation of the campaign. You set clear goals, determine the budget, select
promotional tools, and define your target audience.

Key Considerations:

 Objectives: Increase sales volume, clear inventory, boost channel partner engagement.
 Target Audience: Distributors, wholesalers, retailers, or end consumers.
 Promotional Tools: Trade discounts, dealer contests, free goods, cashback, consumer
schemes.
 Budget: Allocate funds for promotions, logistics, rewards, advertising.
 Legal Compliance: Ensure all offers meet regulatory guidelines.
 Timelines: Define start and end dates, including contingency buffers.

2. Testing Stage
Before a full-scale rollout, manufacturers should test the campaign with a select group of
distributors or retailers to identify potential issues.

Why Testing Is Important:

 Prevents operational glitches.

 Gauges initial response from channel partners.
 Helps optimize messaging and processes.

Key Steps:

 Pilot Launch: Test the promotion with a small distributor/retailer base or region.
 System Testing: Ensure POS systems, ERP, and tracking mechanisms handle
promotions smoothly.
 Check Inventory Readiness: Confirm that stock levels are sufficient to meet anticipated
demand.
  Communication Testing: Verify that all stakeholders (sales reps, distributors)
understand the promotion details.
 Feedback Loop: Gather quick feedback from the test group about usability,
attractiveness, and any challenges.

Adjustments after Testing:

 Modify offer structures if responses are underwhelming.

 Address logistical bottlenecks.
 Clarify confusing terms or communication issues.

3. Implementation Stage
Once testing validates the campaign, roll it out at scale.

Key Steps:

 Full Rollout: Launch the campaign through your sales force, channel partners, and
communication channels.
 Marketing & Communication: Provide materials like banners, posters, and digital
assets. Explain offers clearly.
 Partner Enablement: Train distributors and retailers to maximize participation.
 Incentive Distribution: Ensure free goods, rewards, and discounts are delivered on time.
 Monitor Real-Time: Track sales numbers, order inflows, and stock levels continuously.

4. Review Stage (During the Campaign)

A mid-campaign review helps track progress and make course corrections in real-time.

Key Steps:

 Monitor KPIs: Sales targets, distributor participation, redemption rates.

 Gather Ongoing Feedback: Talk to channel partners and sales reps about the ground
situation.
 Solve Issues Quickly: Fix stock shortages, clarify misunderstandings, and handle
disputes.
  Competitor Activity: Stay alert to competitor counter-promotions and adapt if needed.

Adjustments Possible During Review:

 Increase promotional efforts in underperforming regions.

 Offer additional incentives to lagging channel partners.
 Ramp up communication if awareness seems low.

5. Evaluation Stage (Post-Campaign)

After the campaign ends, evaluate its effectiveness and gather insights for future strategies.

Key Steps:

 Assess Campaign Performance:

o Did it meet sales objectives?
o Were channel partners satisfied?
o Did it improve market share?
 Calculate ROI: Compare promotion costs against incremental sales and profits.
 Collect Feedback:
o Channel partners: Were the incentives motivating? Were there barriers?
o Sales teams: Were tools and training effective?
 Customer Data Analysis (if applicable): Redemption rates, new customer acquisition,
feedback on product/offers.
 Document Learnings: What worked well? What to improve?
 Recognize and Reward Success: Acknowledge top-performing partners to foster
loyalty.

Example to Illustrate:
A manufacturer of kitchen appliances launches a promotion to increase dealer orders for a
new mixer-grinder model.

1. Planning: Objective—Increase distributor orders by 40%. Budget—₹10 lakhs. Offer—

Buy 50 units, get 5 free.
 2. Testing: Pilot in South India. Discover confusion about qualifying order quantities. Fix
communication.
3. Implementation: National rollout. Sales reps trained. Distributors briefed.
4. Review: Mid-campaign, Northern region sales lag. Offer extra dealer incentives. Increase
local ads spend.
5. Evaluation: Orders increased by 50% nationally. ROI exceeded targets. Dealers suggest
adding demo videos in the future.

Q4. Explain the process of evaluating sales promotion strategies. What key metrics and
qualitative factors should be considered to assess the effectiveness and impact of a sales
promotion campaign?

Ans4. Evaluation of Sales Promotion Strategies

Evaluating sales promotion strategies is essential to determine whether the efforts have
effectively met their objectives and contributed to the overall marketing and business goals. It
ensures that the resources invested in sales promotions generate a satisfactory return and help
refine future promotional activities.

1. Define Clear Objectives Beforehand

Before evaluating, it's important that objectives for the sales promotion were clearly defined
during the planning stage. Common objectives include:

 Increase in sales volume.

 Boost in market share.
 Improved customer acquisition or retention.
 Higher retailer or distributor engagement.
 Inventory clearance.

2. Quantitative Evaluation (Measurable Metrics)

a. Sales Data Analysis

  Pre- and Post-Promotion Sales Comparison: Compare sales figures before, during, and
after the promotion.
 Incremental Sales: Assess the additional sales generated due to the promotion.
 Sales Volume vs. Objectives: Measure actual sales volume against the targets set.

b. Redemption Rates (for Coupons/Vouchers)

 Track the percentage of distributed coupons or vouchers that were redeemed.

 A high redemption rate typically signals a well-received promotion.

c. Market Share Impact

 Analyze whether the promotion helped gain market share over competitors.
 Use market reports and industry data for comparison.

d. Return on Investment (ROI)

 Calculate ROI using:

ROI = (Incremental Profit - Promotion Costs) / Promotion Costs * 100

 Consider all costs (discounts, free gifts, advertising, distribution) and compare with
profits from incremental sales.

e. Customer Acquisition and Retention

 Measure the number of new customers acquired through the promotion.

 Evaluate whether these customers made repeat purchases (customer lifetime value).

3. Qualitative Evaluation (Behavior and Perception)

a. Customer Feedback

 Conduct surveys, interviews, or focus groups to understand customer reactions to the

promotion.
  Evaluate whether customers found value in the offer or if it enhanced their perception of
the brand.

b. Channel Partner Feedback

 Collect feedback from retailers, wholesalers, and distributors regarding:

o Ease of participation.
o Perceived effectiveness.
o Support received during the campaign.
o Willingness to engage in future promotions.

c. Sales Force Feedback

 Understand how the promotion affected the sales team's performance.

 Gauge the ease of communication and clarity of promotional rules.

4. Analyze Promotional Effectiveness

 Did the promotion create short-term sales spikes, or was there a sustained increase in
demand?
 Did the promotion lead to stockpiling (where customers bought more but didn't purchase
again for a long time)?
 Was there cannibalization, where customers shifted from buying a more profitable
product to a discounted one?

5. Impact on Brand Equity

 Evaluate if the sales promotion had a positive or negative impact on brand perception.
 Frequent promotions may damage perceived value or brand image, leading to brand
dilution.
 Measure brand equity through:
o Brand awareness studies.
o Perception surveys.
o Social media sentiment analysis.
6. Operational Efficiency Evaluation

 Were logistics and inventory managed effectively during the promotion?

 Were there stockouts or fulfillment delays?
 Were promotional materials delivered and displayed on time?

7. Legal and Ethical Compliance

 Ensure the promotion complied with all applicable laws and regulations.
 Confirm no customer or partner disputes arose due to unclear terms and conditions.

Example of an Evaluation
Promotion: "Buy 1 Get 1 Free" on packaged snacks.
Objective: Increase sales volume by 25% in one month.

Evaluation Results:

 Sales increased by 30% during the month.

 70% of buyers were first-time customers, but only 25% returned the next month.
 Retailers reported high satisfaction due to increased footfall.
 Profit margins decreased due to heavy discounts, reducing overall profitability.
 Customer feedback indicated high product trial, but some perceived reduced product
quality.

Recommendations:

 For future campaigns, offer smaller discounts and focus on bundle offers instead of free
products to protect margins.
 Implement a customer retention program (loyalty points) to maintain customer
engagement post-promotion.
Conclusion

Evaluating sales promotion strategies is not just about measuring sales growth but also
understanding customer behavior, channel partner satisfaction, and the impact on profitability
and brand value. A thorough evaluation helps refine future promotions and aligns them more
effectively with long-term marketing objectives.

Q5. Differentiate between B2B and B2C Sales promotion technique.

Ans. B2B vs B2C sales:

Sure! Here's a tabular differentiation between B2B and B2C Sales Promotion Techniques:

Basis B2B (Business-to-Business) B2C (Business-to-Consumer)

Businesses, wholesalers, distributors,
Target Audience Individual consumers and households
retailers
Build long-term relationships, Stimulate quick sales, attract new
Objective encourage bulk buying, motivate customers, encourage brand switching
channel partners or product trial
Purchase Volume Large-scale, bulk purchases Small-scale, individual purchases
Rational, based on logic, ROI, and Emotional and impulse-based buying
Decision-Making
long-term value decisions
Duration of Often longer-term (quarterly, yearly Usually short-term (seasonal sales,
Promotion deals, trade schemes) festivals, limited-period offers)
Trade discounts, quantity discounts, Discounts, coupons, free samples,
Common
dealer incentives, cooperative BOGO (Buy One Get One), cashback,
Techniques
advertising, trade shows, credit terms contests, loyalty programs
Relationship Strong focus on relationship building Focus on mass communication and
Focus and personal selling brand appeal
Highly involved, relationship
Sales force Less direct involvement, relies on
managers and account executives play
Involvement advertising and in-store promotions
key roles
 Basis B2B (Business-to-Business) B2C (Business-to-Consumer)
High level of customization in
Standardized offers designed for mass
Customization promotions based on client size and
consumers
needs
A distributor gets 10% extra margin Flipkart’s Big Billion Days with
Examples for meeting sales targets; trade fair discounts; buy 2 get 1 free offers in a
participation offers supermarket