Sales Promotion

Objectives of Sales Promotion

Sales promotion is a tool used to achieve most of the five major promotional objectives discussed in the Promotion Decisions Tutorial:

• Building Product Awareness – Several sales promotion techniques are highly effective in exposing customers to products for the first time and can serve as key promotional components in the early stages of new product introduction.  Additionally, as part of the effort to build product awareness, several sales promotion techniques possess the added advantage of capturing customer information at the time of exposure to the promotion.  In this way sales promotion can act as an effective customer information gathering tool (i.e., sales lead generation), which can then be used as part of follow-up marketing efforts.
• Creating Interest – Marketers find that sales promotions are very effective in creating interest in a product.  In fact, creating interest is often considered the most important use of sales promotion.  In the retail industry an appealing sales promotions can significantly increase customer traffic to retail outlets.  Internet marketers can use similar approaches to bolster the number of website visitors.  Another important way to create interest is to move customers to experience a product.  Several sales promotion techniques offer the opportunity for customers to try products for free or at low cost.
• Providing Information – Generally sales promotion techniques are designed to move customers to some action and are rarely simply informational in nature.  However, some sales promotions do offer customers access to product information.  For instance, a promotion may allow customers to try a fee-based online service for free for several days.  This free access may include receiving product information via email.
• Stimulating Demand – Next to building initial product awareness, the most important use of sales promotion is to build demand by convincing customers to make a purchase.  Special promotions, especially those that lower the cost of ownership to the customer (e.g., price reduction), can be employed to stimulate sales.
• Reinforcing the Brand – Once customers have made a purchase sales promotion can be used to both encourage additional purchasing and also as a reward for purchase loyalty (see loyalty programs below).  Many companies, including airlines and retail stores, reward good or “preferred” customers with special promotions, such as email “special deals” and surprise price reductions at the cash register.