What is Sales Promotion?

Simply put, sales promotion is a marketing tool that offers the consumer a temporary price cutback. It occurs in such a way that the extra volume sold will be over and above what would have been sold without advertising and packaging alone.

Researchers have come to the concussion that the reason for the increase in sales promotion is attributed to increase in competition among manufacturers and sellers.

When Do You Actually Need a Sales Promotion?

That your product is doing badly in the market is not a sufficient reason for you to embark on a sales promotion. Just like advertising cannot sale a bad product, promotion cannot sales a bad product. Sales promotion basically boils down to exploring and taking advantage of key problems and opportunities. It is necessary that you be sure that promotion is what you actually need to solve the present problem before embarking on it.

When Is Sale Promotion Effective?

Sales promotion is most effective when there is a shortfall in brand performance where the business needs to:

Boost Trial Level

This works mostly with new entrants into the market. It becomes a way of encouraging consumers to try a particular product or service, especially when you are confident about the value of the product. Once consumers become familiar or hooked to the product/service, such promotion is often discontinued.

Increase Repurchase Level

This is commonly found in fast-moving consumer goods. The idea is also replicated in other products to an extent that a buyer may even end up buying a particular product for more than one reason/use.

Knowing When Promotion is Least Effective

A lot of products have moved from being brands to ordinary commodity by virtue of the frequency the engage in promotion. That underscores what we said earlier that promotions should not be used as a solution to accepting bad products.

Sales promotion will do little or no good to bad brands and declining brands.

Promotion as Brand Reenforcer

Sales promotion is not only meant to increase sales, it also helps in re-enforcing a brand. Branding, as a rule must complement advertising notions. But must work hand-in-hand to ensure the desired image and position is achieved.

1. Passion

   The first question that every businessmen/women or should ask themselves is how passionate are they about their line of business? Are you doing it because it is the business in vague? Or are you doing for the burning passion that you have for. Like a friend of mine once said “passion gives rise to action”. If the business is not something that you have flair for, you will not be fulfilled.

2. People

   People (employees and customers) are your most potent asset. You will succeed in your line of business when you how to get along with people. Like the golden says: “do unto others as you would want them to do unto you”. If you don't treat your employees and customers properly, it will eventually rub off on your business venture. In your business pursuit this should be your mantra: “people count”.

3. Place

   If you desire to sell your product or service or both, then you must get a location that tells people that you have arrived. Willie jolley, a business consultant calls it: “you show up to go up”. Many businesses fail because they are poorly located. Your location determines your allocation. It is imperative that you occupy a strategic location if you are desirous of making profitable sales.

4. Packaging

   Researchers all over the world have proven that 80% of your sales are determined by your packaging. How attractive is your product/service? How do you relate to your customers? Your employee plays a very vital in determining the success of your business because they are the one that deal directly with your customers. It is your packaging that attracts your prospects to your product.

5. Persistence

   Doing business you will agree is no child's play. In the course of doing business you will be face with several issues that border on the market, competition, laws, and employees. But with persistence and hard work, you will build your dream business. Everything remains in a state of rest until a force is applied.

So how do you foster this relationship you have with your customers?

First and foremost as with any relationships, it needs to be worked at and nurtured. Customers come in all shapes and sizes. There are the fans and there are the switchers. Let's take them on one at a time.

The fans

These are the die-hard fans of your brand. They are intensely attached to your brand and make repeated purchases. They form brand communities like chat groups or fan clubs eg. Mini convertible Club. There they bond with other brand users and promote the use of the brand. It's a great way to get positive word-of-mouth promotion. Hearing it from opinion leaders and brand advocators is more personable and believable. It's a powerful way of getting your brand message across to new customers too! Of course, fans of your brand need to be rewarded for their loyalty and support. They need to feel special and be given special privileges such as, be the first ones to know about new products or sales promotions, get rewarded with rewards points, discounts and one-off special edition premiums. In other words, they need to be handled with care and their feedback taken seriously because they give you a bigger share of wallet.

The switchers

These are the folks that have little attachment and loyalty to your brand. They are brand-switchers and are easily swayed by your competitor's brand messages. Even though they are aware of your brand but they don't quite identify or bond with it. In branding, your biggest challenge is to get the switchers to identify and like your brand. You want to move them from switching to trusting, liking and loving. In other words, switch them into fans. Understand their needs and why they're switching. Pay attention to what they're saying. Because they are already aware of your brand, you can focus on winning their trust and commitment.

It's all about building on that relationship you have with your customers. Remember, fans of brands do more than just rake in the sales. They bring in the new converts too!

Take McDonalds for instance. This brand is recognizable worldwide. Their global success is attributed to the fact that they consider several factors before infiltrating a country. This is so because there are factors operating in domestic mix that differs or is not applicable in another.

To be competitive, marketing the product internationally should take into consideration several factors that could play a role in the success of the product. These factors include: country's culture, resources found in that target country, current marketing situation, existing competition for McDonalds products, environmental forces operating in that country, cultural influences such as family, state, church, school and media. The 4P's is essential in coming up with international marketing concepts - product, price, promotion and placement.

An example of this situation is the fact that McDonalds may sell a lot of burgers in the United States but this could not be true in China. Since Chinese prefer to eat chicken more than beef. Necessary adjustments then should be adopted before penetrating international market.

Other factors important in international marketing are: language, culture and religion.

Language and cultural blunders inevitably lead to deals that go awry resulting in lost opportunities. The areas of cross-cultural and language training are essential to conducting international business and marketing strategies.

The development of branding is one way of remaining competitive in the global scene. There are many examples of branding that has operated successfully with similar images that are designed to be culturally generic, such as Pepsi-Cola in United States and Japan. Market placement of goods refers to the methods which define the sectors where the goods need to get delivered to or identifying segments of potential customers. International and local trade laws obviously affect the marketing strategy of a business as these could set limits in the approach they used.

To succeed globally, a business requires an amalgamation of factors - effort, money and time. The multinational company should consider the fact that the international market is four times larger than the U.S. market. Learning how to maintain competitiveness in the international market also enables the business to acquire necessary rudiments to keep their advantage at the local market. To be successful, the best strategy for a business is to weigh risks against the possible benefits.

Branding and Consumer Behavior

An impulse trigger formed by well informed marketers allows consumers to quickly refer to their memory and make the purchase decision. This behavior comes almost naturally in our everyday purchases due to certain set of rules predetermined in the consumer mindset. This occurs when a brand has created strong brand resonance amongst its target niche. The Consumer Based Brand Equity (CBBE) model from Strategic Brand Management by (Keller, 2003) suggests that for a brand to reach the Brand Loyalty stage it has to at least have some salience and points of parity to be able to compete in the market place however, it is essential that a brand distinguishes itself from the competition by having unique points of difference to be able to perform above and beyond the various choices available to the consumer in today's competitive market. This model illustrates and stresses the important of being the preferred brand in the mindset of the consumer since branding has played the key role in an environment which is saturated with hundreds of choices from a product or service stand point.

Consumers actively want to associate themselves with certain brands and this makes a large influence on their buying behavior. The impulse customers may not care about brands as much unless influenced by other variable however, generally a planned purchase decision can be significantly influenced by different brands. Marketers create a lifestyle with these brands which triggers the consumer buying behavior.

In these instances the prediction of behavior becomes more important since for marketers to really understand the consumer and achieve specific results the study of consumer behavior becomes vital in every organization. This could be done in different forms of quantitative research such as surveys or qualitative research such as detailed interviews or focus groups. These research techniques allow marketers to understand consumer and compete in the market place.

Technology in Consumer Behavior

Due to the significant advancements in technology the consumers have become savvier with various tools available for extensive research before making purchasing decisions. These tools allow consumers to go on the web and do price comparisons and quickly find the cheapest possible deal or in other situations find the best possible value compared to the cost. However, these tools have also allowed marketers to indulge with customers and allow an interactive space such as the web as a communication medium. Marketers can now use the ability of sound and visual elements to create mood and settings that fit best with their target audience. Marketers are able to allow consumers to interact and create a custom preference based on each individual customer. This allows both parties to make the most out of the buying decision and buying trigger. This allows a two way communication between the parties.

Memory and Time

Planned purchases are very similar to impulse purchasing since they both may recall memory and make a buying decision. However, planned purchases may have a longer research cycle before they are made while an impulse may take just a few minutes before the product or service is purchased. This may be due to the fact that sometimes planned purchases require a much higher investment than an impulse buy. A consumer will probably not spend the same time for purchasing a chocolate bar as purchasing a motor vehicle or a big screen TV.

Income and Consumer Behavior

Income plays a significant role in consumer buying behavior. One could safely assume that an individual with higher disposable income may spend a lot more than an individual with a tighter budget. Generally consumers that have a specific budget may be more involved in larger scale research before buying. Consumers with higher disposable income may have less risk versus someone with a smaller income may have to compromise before making a buying decision. The impulse trigger from marketers may directly target a certain income group due to its positive response towards that particular product or service. Consumers actively refer to memory and research either the long term memory generally in large investments or short term memory for impulse purchases. A favorable image about a product or service may be the key decision factor for a purchase decision if it's not entirely a necessity.

Cultural Influences on Purchasing Behavior: Collectivists vs. Individualists

The Theory

The notion of collectivists and individualists often arise when considering cultural influences in purchasing behavior. For example, a person who is in a store to purchase a beverage in the presence of others, whether they are strangers, family, or friends, is faced with a decision. The buyer, whom would normally purchase a low-priced drink, may or may not opt for the more prestigious and expensive beverage; determined exclusively by the fact that the purchase is being observed by the witnesses. The dilemma is whether the consumer should buy the fancier drink to appear as one who is not thrifty for the sake of status, or not. To further explore this phenomenon, we will explore the theory of collectivists and individualists relative to impulse and planned purchases.

Collectivists and Individualists

As the name suggests, collectivists are people who view themselves as an important part of a collective such as family, friends, colleagues, and so forth. People from more collectivist areas, such as Asia, tend to be motivated by the norms of their collective as well as prioritizing the collective's goals. These individuals also take pride in being recognized as part of their collective.

Individualists are those who view themselves apart from collectives because they wish to be unique. They desire distinctiveness from others while striving to meet their own personal needs, preferences, and goals. Geographically, Americans are likely individualists who place more emphasis on brands that set them part as individuals.

Impulse versus Planned Purchases

People from a collectivist culture will be more satisfied with an impulse purchase in the presence of another person of significance as opposed to the same purchase made when they are alone. People from an individualist culture, however, have no difference in their levels of satisfaction on impulse purchases when bought in the presence of an important other; compared to when they are alone when purchasing.

B2B (Planned) vs B2C (Impulse)

Comparison

B2C customers often make purchases which can either be a planned purchase or a purchase based on impulse behavior. A B2C purchase is always made by an individual who is looking for the best price and will do so by researching the product and alternatives from the competition. However these customers may sometimes skip the researching phase and react to B2C tactics such as promotional campaigns, and discount coupons, impulsively purchasing these products. On the other hand, B2B buyers will never make purchases on impulse behavior but instead a planned purchase. B2C buyers purchase products for personal benefits while B2B buyers solely focus on product that benefits the company. The B2B benefits could be cost savings, profit increasing or time saving. The decision to purchase through B2B is always done by a group of buyers also known as purchasing agents who must consult with the company executives to approve of the transaction so the decision process takes longer and goes through more channels when completing a purchase. The business buying process can typically be summarized into several steps such as problem recognition, determining product specifications, finding qualified suppliers, requesting and evaluating proposals, selecting an order process and conducting performance evaluation. (Harrison-Walker, Neely, 2004) Because a B2B purchase can determine whether the business succeeds or fails, B2B buyers spend more time making a purchase than a B2C buyer would and must have a clear rationale on why they made their choice.

B2B vs B2C Values

Branding plays an important role in both B2B and B2C markets. In B2C, if the company is a familiar and strong brand to the customer, the customer is most likely to remain loyal to the company, purchase the product and pay a higher price because of the trust factor. Similar to B2C, branding plays an important part in building relationships with B2B consumers in respect to quality and pricing of the product. However branding in B2B is much more complex such as maintaining personal interactions between buyers and sellers, both companies performing to their expected obligations of their contracts, and the given track record the company builds with the customer over the years. Public relations also play a role in B2B relationships, more so than the traditional advertising because of the credibility and trust that can be gained. Outsider perspective may appraise one of the two companies, thus justifying the decision to working with the other. Personal business relationships, excellent performance and company reputation is a part of the branding that B2B companies use to strengthen their working relationships. (Spark, 2006)

So while the consumer is more interested in obtaining status and desire through branding, business buyers are motivated by making money, saving money and increasing productivity.

Cognitive Dissonance

Definition

Cognitive dissonance is a feeling of post purchase psychological tension or anxiety which comes from holding two conflicting thoughts in the mind at the same time. It is caused by inconsistency among one's belief, attitude or actions that an individual subconsciously attempts to eliminate by modifying his or her beliefs. Impulse purchase is defined as a novelty or escape purchase that breaks the normal buying pattern. When people make impulse purchases, they are likely to experience cognitive dissonance at some point in time in order to make sure whether their expectations are satisfied or dissatisfied.

One feels cognitive dissonance with impulse buying when the amount of conflict involved depends on the initial evaluations of the alternatives, since the purchase was hurried and unplanned, and because they may not have considered other choices which might have been better than the one that they chose. The suddenness of the purchase precludes thoughtful information search and careful deliberation.

Relativity to Impulse and Planned Purchases

Impulse purchase occurs especially when people feel like there is something in it for them like cost saving when a sale going on, when there is free shipping included and when there are seasonal and holiday promotions going on. People do not plan to buy such items in these situations to save some money, over some missed promotional opportunities and then experience cognitive dissonance or regret of buying after.

During the planned purchase, one intends to make the purchase even before reaching the store. The risk associated with buying is minimized by planning a purchase. Planning helps build confidence and assures that one has made the best, safest and informed decision in his/her purchase by taking time to examine available options. Planning eliminates uncertainty and risks by gathering information and by talking to friends or relatives. Although post purchase regret may still be experienced with a planned or searched purchase, the focus is on minimizing it by thoughtful search and deliberating in advance.

My authentic, coveted bag, I will not forsake you. Let no one person cast aside the miracle of your Armani presence in exchange for a brown pleather bag with squiggly insignia resembling Y S L. Let the powers of branding sweep across middle earth, and ignite the hearts of the uninformed and rogue Chinese spenders who rapaciously banter down prices, intently attracted by the handbag that can be gotten inexpensively or thrown-in to offset a price, rather than desire with the fire of a thousand hells you, the flawless replica, that so eloquently speaks to my Occidental albeit discount-shopper self like a command issued from the heavens. You must create your identity! Create! Create!'

Need Creation

Creating a need for luxury brands in China is not a simple matter of transferring the global demand for luxury items into a new market - it requires an overhaul of cultural perception. Haier is a global Chinese brand, but is it sexy? Not exactly, and it is branding that can spin the profit of product recognition into surefooted market advantage. But if sex sells, branding in the Chinese market brings in to play an interesting question and even a prophesy about this private and closed-off world "opening" to the world. The world is coming to China through the open door but is China ready for Paris Hilton and Carl's Junior?

So Many Choices

What choices should be presented to Chinese consumers and in what context? Given the unbridled buying power teeming within middle earth, it is no surprise that branding wants to happen there. Branding is sex-y. But, one has to wonder how many Chinese consumers are as intently aware of Prada as their Western cousins, given the unparalleled number of designer replicas worried on busy shoulders in Beijing, all bearing nonsensical insignia like banners on the shoulders of the uninitiated.

Come One, Come All

There is no doubt that East and West alike are afloat in a sea of complexities that shape purchasing decisions. The answer is complex but one that marketers and CEO's are ready to untangle. Y S L is an accepted codename among brand-savvy consumers signaling "high-caliber lifestyle" or "reckless spender". How mesmerizing to marketers it must be when the North American consumer enter a market, and on the spot purchases their must-have fall bag, for then the true power of branding is as familiar as smog at Beijing dawn. Westerners will not leave without The Bag regardless of price tag. Conversely, the Chinese denizen cum consumer will leave easily with several insignificant bags, replica or not, and still enough cash-in-hand to stretch their purchasing power-experience into several tomorrows.

Bargain, or Brand - You Choose

The nub of it lies therein, nestled cantankerously between impulse, vanity purchases and the power and glory of buying Western merch for a song. At the psychological root of the Western versus Eastern consumer experience there is a difference of identity. Marketers have a challenge at hand in the creation of "The Must Have" purchases that have been skillfully striking at the core of western identity since Ford first swept Americans away in a modern, conspicuous consumption roar.

China Will Demonstrate Its Success

Catch phrases like "life-style purchases" come to mind, and Chinese CEO's and marketing executives need to delve deep into the beating hearts of their consumers to find therein a clue to successful branding in China. Western identity is cloaked in consumer choice, each individual a potential canvas whose identity need be dressed-up or down in label choices that speak volumes about personal values, success, and sex. What the world stage has past proven time and again is the bizarre changeability of people's perceived needs in the global, cult of manufactured desire. This sounds like a stretch for first and second, generation party members whose identity was wrapped in the identity of a socialist dream, or does it?

Most large companies have a message that people will remember. These messages are usually referred to in the slogan, are part of the advertising campaign and become tied with the product or company. A slogan can be about anything but is usually associated in someway with the corporate philosophy. For example, “News that doesn't make you snooze!” would obviously be from a company that is trying to give you interesting news reports.

This message becomes both the theme and a guide to the business. Customers as well as employees associate your product with the message because it is easier for them to remember. The more effective we are at associating the message with the product the more likely we are in encouraging and retaining business.

Once you are actually engaged in the advertising process your goal is to get the message out to the right people. The more closely you align your target population to the message, the more sales you are going to make. For example, assuming that most business readers are males over the age of 40 your message “News that doesn't make you snooze!” should be advertised in only those places where 40 year olds are going to receive it. Places might be clubs, journals, billboards, etc. There is no point in advertising to the under 20 year old group if they aren't likely to be interested in the news anyways.

The difference between a message and simply exposing your product is in the content. A message appeals and draws while exposure only displays. Exposure is only likely to result in a short-term sale while a message is likely to be both short and long-term. As customers remember your message and know what your company stands for they will likely purchase again because they remember you. Messages are about maintaining an image that will result in both a short-term and long-term sale that will brand your product for the future.

The next time you start a marketing campaign be aware of the differences between simply getting your product exposure and developing a message. Focus on getting your message out to the people most likely to hear it and be interested in it instead of advertising in the medium that has the most viewers. It makes little sense to spend large amounts on getting exposure if no one is willing to listen.

Branding is as much a process as it is luck or any other alignment of the stars mentality. If you follow the 4 simple steps outlined below you can brand just about any product, website or business. Even small businesses can brand an image that will be recognized by their customers and will set them up for greater growth.

Before you begin it is important to know what branding can actually do for you. No major corporation became large without having an image attached to its name. Think of Starbucks for a moment and you will see that the green circle logo is easily distinguishable among all the other coffee brands. Starbucks attracts and represents the young and urban socialites that have a promising future. In other words, they cater to the “Yuppie”. The same might be said for Macy's clothing, Gucci, BMW's and the sport of Tennis.

The key to branding is to know your strengths and weaknesses. For example, the New Business World Blog (NBWB) has the strength of a highly educated writer who has years of business experience and the ability to write reasonably well. The blog's weakness is its difficulty in attracting corporate advertising, lack of personnel, and the millions of competing blogs. Thus a brand that sets this blog apart should promote information on higher business concepts, superbly written articles, and business help topics.

Focus on what your strengths are and develop a strategy around them. That strategy, or approach, should lead you to slogans, images, and themes that are part of your branding. These items become your branding material. To further the example of the NBWB and its strengths in education, experience and articles it could market its business through articles, sell these articles to businesses and allow free articles to encourage corporate readership. Hopefully this corporate readership will lead to corporate sponsors who want to place advertisements on the site. The more articles means more visitors and more corporate sponsors.

Develop your image and logo based upon your businesses strategy and strengths. Let us say that you are the owner of a new dairy farm. Your strength is organic milk and cheese and your strategy is to direct market these products to individuals without the middleman. You may consider a logo that shows a cow with cheese piled around it. The slogan might say something like “Putting the Goodness of Mother Nature in Your Hands”. There really are few limitations when developing your logo but one should keep it simple, easily distinguishable and relevant to your overall message.

Once your logo and image has been developed your business should begin marketing that information everywhere possible. This means putting it on your website, on the product, in newsletters, in emails, on documents, in your advertisements, etc. The more you market this image and logo, the more likely it will become associated with your product or service.

Train your employees to act in accordance with the new image. This new image should be the central theme of your operations and should be encouraged as much as possible. In the above farm example employees should ensure the quality, taste and organic nature of the material.

Today we are going to look at all of the physical elements that brand you. This includes retail/physical location (if applicable), you and your employees, product and its packaging (if relevant), business cards, web site, brochure, invoices ... and potentially more. I'm sure you're catching on - anything that is physical or tangible.

The simple & the straightforward elements:

If you operate either a retail store, or have an office where your clients come to you for business you need to know what image you are presenting. Here's a list of things you need to consider about your physical location:

• What does the address say about your business? Are there either positive or negative associations to the community in which you're located? Is it known for a particular ethnic group? Some streets have particular business associations (at least in a consumers mind) - the big box strip, the boutique strip, Dealership row, warehouse & clearance center, etc. What impact does the location have on your business: positive, negative or neutral?
• Does your business have sufficient parking for all customers? Is it easily accessed, regardless of which direction the customer is coming from? Are there clearly defined handicap spaces? Can your customers park close to your store or office? Are the parking facilities shared with other businesses? Ask the same question: what impact does parking and access have on your business: positive, negative or neutral?
• Is your building wheelchair accessible? Considering your target market, is this an issue? Does it send an exclusion message to your potential customers? Again decide the impact of this: positive, negative or neutral?
• What signage is on your store/office? Can it clearly be viewed from a significant distance? Will it be lit at night? What images or text are on your sign: logo, business name, description of your business activities? What colours? Consider how people associate certain feelings to certain colours - do yours match the message you really want to convey?

Next Steps:

• What image is projected by you and any employees you have? You need to match this to your brand as well. Here's a list of things to consider:
• It almost goes without saying that you & your employees need to present with excellent personal hygiene. Although, you might be surprised by how many small business owners do Not pay close enough attention to this. For instance if you have cashiers, what do their hands look like? It may seem petty, but please go take a look at their fingernails. Your customers are formulating their opinion of you based on every one of these little details, and I'm pretty sure that your branding message does not include wanting to be known as the company with dirty fingernails! (then again, unless you are a gardener or landscaper.) My point is hygiene is required. And where you draw the line depends on what is appropriate for your business. So go ahead and ask yourself how the personal hygiene of me and my employees impact my business: positive, negative or neutral?
• What about attire? This, next to hygiene speaks volumes about your business. There certainly is no right or wrong here. But you need to seriously consider what is appropriate not only for your business but also the brand you want to be known as. If part of your branding strategy is to be known as "a cut above" the rest, then make sure you and your staff "look" the part.
• Lastly on the image that people project is body language and facial expressions. Don't fool yourself - this is extremely powerful! Can you honestly say you ever walked away from a store where you finished your experience with the moppy cashier who never even looked up from the counter feeling "wow, this is a great place to shop"? Insisting on presenting a friendly, welcoming, helpful attitude is a must. The particulars will depend again on what level is most appropriate for your particular type of business.

Thanks everyone for reading, I hope you found at least one nugget of gold for your time .... Have a Fabulous Day!

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