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 purchase price, money back) or the inclusion of additional value-added material (e.g., something more for the same price).
Sales promotions are used by a wide range of organizations in both the consumer and business markets, though the frequency and spending levels are much greater for consumer products marketers. Unfortunately, given the number of different methods that can be classified as sales promotion, it is difficult to measure the yearly amount spent on this promotional method, though it is likely on par with what is spent yearly on advertising.
Sales promotions are often confused with advertising. For instance, a television advertisement mentioning a contest that will award winners with a free trip to a Caribbean island 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. Evidence of Time Constraint – Sales promotions involve a short-term value proposition where an advertisement does not. In general, if there is a limited time period within which action must be taken then it most likely qualifies as a sales promotion. In our contest example, a stated entry deadline would indicate a time constraint.
2. Customer Action Required – Sales promotions require customers to perform some activity in order to be eligible to receive the value proposition. For instance, in our Caribbean trip example, customers may need to complete an online form to make them eligible to be entered in the contest.
The inclusion of BOTH a timing constraint and an activity requirement are hallmarks of sales promotion.
Classification of Sales Promotion
Sales promotion can be classified based on the primary target audience to whom the promotion is directed. These include:
Consumer Market Directed – Possibly the most well-known methods of sales promotion are those intended to appeal to the final consumer. Consumers are exposed to sales promotions nearly everyday and, consequently, many buyers are conditioned to look for sales promotions prior to making purchase decisions.
Trade Market Directed – Marketers use sales promotions to target a variety of customers, including partners within their channel of distribution. Resellers, who are often referred to as trade partners, are targets for the majority of such spending. Trade promotions are initially used to entice channel members to carry a marketer’s products and, once products are stocked, marketers utilize promotions to strengthen the channel relationship.
Business-to-Business Market Directed – A smaller subset of sales promotion is targeted to the business-to-business (B-to-B) market. While these promotions may not carry the glamour associated with consumer or trade promotions, B-to-B promotions are used in many industries.
An extensive discussion of different types of promotions for each classification can be found in the What are the Different Types of Sales Promotion? discussion.
Learn More About Sales Promotion
- What is Sales Promotion?
- What are the Advantages and Disadvantages of Sales Promotion?
- What are the Key Objectives of Sales Promotion?
- What are the Different Types of Sales Promotion?