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OBJECTIVE OF SALES PROMOTION

OBJECTIVE OF SALES PROMOTION

         The ratio of expenditure for sales promotion is increasing in the budget of firm in comparison to advertising. According to Kotler a decade ago it was about 60:40 which increased in many consumer packaged goods up to 25:75. This due to the fact that sales promotion fulfills may purposes. Sales promotion objectives depends upon overall marketing strategy of the company.

         There may be two approaches of a firm about sales promotion objectives like proactive or reactive. In proactive approach firm tries to gain additional market share and tries to expand market. In reactive approach firms are compelled for sales promotion programmes due to competitive pressures or to relive from excessive inventory pile sips.

1. Improving the marketing performance of middlemen and sales people.

2. Supplement advertising and personal selling.

3. Stimulating demand for a product.

4. To encourage greater use by existing customers.

5. To increase impulse buying.

6. To attract new customers.

7. To get retailer cooperation.

8. To protect market share in the age of competition.

9. Shifting the burden of storage on distributions.

10. To earn the benefits of economies of scale.

11. To overcoming seasonal slumps.

12. To support and supplement to the salesman’s effort.

13. To develop favourable consumer experience.

14. To generate short-term cash inflows.

15.  To expand the target market.

16. Improve relationship with dealers.

17. To induce brand switching.

              Sales promotion offers immediate value at the time of purchase which may contribute to increasing sales volume. Sales promotion is cost-effective and helpful in generating more sales volume for small budget companies which cannot afford huge advertising expenditure to introduce new products.

Companies with a small market share cannot match the substantial advertising budget of market leader. Sales promotion encourage repeat purchase by consumers which leads to increased sales volume. A firm that feels threatened may protect its loyal customers from switching to the new competing brand by using sales promotions. Sales promotion act as effective tool to pre-empt competition and create favourable conditions. Firms can develop appropriate sales promotion programmes to accomplish the objective of reducing the negative impact on sales. A combination of “push-pull” strategy is used to accomplish the above objectives.

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