Sales promotion, or promotional marketing Is the term used to describe a range of sales and attention building activities which fall outside mainstream media advertising. Including discounting, giveaways, bonus offers and programs encouraging regular purchase for an ultimate reward, promotional marketing is utilised by retailers, manufactures and distributors as additional means by which consumer perceptions and behaviours may be influenced as part of a broader range of programs, which combined are termed the "marketing mix". Ultimately the goal of promotional marketing is to position your product or service as a desirable alternative to competitors' offerings while establishing an emotional and/or intellectually defined benefit.
Using promotional materials carrying custom branding is one well proven means of sales promotion, but there exists a wide range of other options, such as couponing, the opportunity to enter a lottery or prize draw, a guaranteed reward for action, bonus gift offerings of bulk discounts being some of the best known and well proved. Because these activities are beneficial in securing both new customers and rewarding or stimulating the activity of an existing client base companies do not face the problem of reducing gross margins available from already qualified clients as can be the case when only price is used as a motivating factor.
In practice the two terms mean much the same thing. The objective of most promotional marketing activity is to promote company sales (hence "sales promotion") though in general the term "promotional marketing" has a a broader definition and can apply to programs which are not designed to create an immediate spike in sales but rather contribute to the expansion of brand equity or consumer perceptions. In most cases it is hoped that eventually there will be a flow-on effect so that increased sales or retail margin result for all promotional marketing activity. In many cases, particularly where a retail brand experiences negative PR or a decline in consumer perceptions promotional marketing techniques can be applied to re-engage with the market and reduce the likelihood long-term damage to brand equity
While ultimately the objective of most marketing activity is to enhance awareness of a product, service or offer these objectives vary according to the overall structure of an organisation's marketing mix. The objectives can be broken down into short-term and long-term goals as different brands require different support and enhancements depending on their life-cycle and the overall objectives of the organisation. A brand may be destined to be deleted and replaced with another product in the mid term, or it may need short-term support to enhance its market share against an expanding competitor. As each product is different, as are its contribution to the goals of its proprietors the following outcomes are all objectives commonly pursued through promotional marketing channels.
Think about the various offers which you see in an average day. Often the letterbox is stuffed daily with flyers and coupon offers which are designed to draw you towards trial of new products or to purchase on days where business might be slow. For instance, a local pizza chain may offer a free bottle of drink or free delivery to your front door under special circumstances. Equally the local cinema may offer a combination deal of a drink with popcorn on certain days of the week when business is generally slow. The essence of these offers is the bundling of genuine value w relevant to the consumer . While better value is the foremost attribute of the deal a range of other more subtle objectives are also pursued.
Promotional Merchandise: Or promotional products are generally utilised as a way to target specific segments of consumers with whom it may often be difficult to cost-effectively communicate through traditional advertising media. Brand values can be enhanced or refocussed by trading off a complimentary promotional product. By combining the perceived value of the gift product with the personal relationship building aspects of offering a free gift most promotional marketers understand that this form of sales promotion is a time tested means by which brand perceptions can be deepened and customised for smaller segments of consumers.
Bonus: Buy-one-get-one-free is a commonly used sales promotion offer. When it comes to understand value for money the market is generally well tuned towards discount offers. Most marketers agree it is preferable to offer two products for the price of one rather than discounting the price by 50%, the only downside being that distribution channels are overfilled with product which depending on the consumption cycle can lead to consumers delaying subsequent purchase. If you are considering an offer like this it makes sense to look at the periodicity or consumer purchases. Research also indicates that though a consumer may purchase double the amount it does not mean it will last twice as long as having a product on hand often leads to an accelerated pace of consumption.
Trial: A proven and effective way to introduce a new product is to offer it as a bonus or at a discounted price to encourage people to make an initial purchase in the hope they enjoy the experience and are prepared in future to buy again at the full retail price. It is important that trial offers are not overused as some major marketing companies have found that the reduced/bonus offer price can be perceived eventually by consumers as the real price of the item and only at times when the trial offer is available will people consider purchase.
While general media advertising is a means by which large numbers of consumers can be motivated and advised of the availability of a worthwhile product or service, the amount of data which can be communicated and the level of motivation which can be developed has to be balanced with the need of the advertising to reinforce brand values. Running a congruent promotional marketing campaign with general media and point of sale promotional activity is a proven way to cost effectively boost sales and awareness. By varying the focus in different markets and with different segments it is also possible to balance projected margin and stock levels, avoiding losing sales due to holding insufficient stock, or supporting sales where they are under-performing. It's a case of not putting all the eggs in one basket and because the messages are variable between segments and markets there is an opportunity to test different mixes of activity to assess which is the best means to create awareness and enhance profit.
Any company, community organisation or government agency can use sales promotion and promotional marketing techniques. Commercial organisations utilise sales promotion programs to build sales and profitability but not-for-profit groups can equally employ similar techniques to enhance the awareness of their services and the needs of their clients.
Most countries these days have consumer laws which are designed to protect consumers from predatory or deceptive behaviour by corporations. Before engaging in any sales promotion or promotional marketing activity it is recommended you appraise yourself of local laws either by checking with the relevant local authority or a legal practitioner.