Define and state the objectives of sales promotion. Sales promotion consists of those marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates consumers or members of the distribution channel to purchase a good or service immediately, either by lowering the price or by adding value. The main objectives of sales promotion are to increase trial purchases, consumer inventories, and repeat purchases. Sales promotion is also used to encourage brand switching and to build brand loyalty. Sales promotion supports advertising activities.
- What is the primary factor that determines sales promotion objectives? Name some different types of sales promotion techniques, and explain the type of customer they are intended to influence.
- You have recently been assigned the task of developing promotional techniques to introduce your company’s new product, a Cajun chicken sandwich. Advertising spending is limited, so the introduction will include only some low-budget sales promotion techniques. Write a sales promotion plan that will increase awareness of your new sandwich and allow your customer base to try it risk-free.
The Correct Answer and Explanation is:
Definition and Objectives of Sales Promotion:
Sales promotion refers to short-term marketing activities, excluding advertising, personal selling, and public relations, aimed at encouraging immediate purchases of goods or services. These activities usually involve incentives like discounts, coupons, contests, or free samples to stimulate consumer or distributor action. The main objectives of sales promotion include:
- Increasing trial purchases
- Boosting consumer stock (inventory)
- Encouraging repeat purchases
- Motivating brand switching
- Enhancing brand loyalty
- Supporting advertising efforts
1. Primary Factor Determining Sales Promotion Objectives & Types of Techniques
Primary Factor:
The key factor that determines sales promotion objectives is the stage of the product in its life cycle (introduction, growth, maturity, or decline). This influences whether the focus is on awareness, trial, loyalty, or liquidation.
Types of Sales Promotion Techniques:
- Coupons – Encourage price-sensitive consumers to try a product at a reduced cost.
- Free Samples – Target new customers by allowing risk-free trial.
- Buy One Get One Free (BOGO) – Attract bargain seekers and increase volume.
- Loyalty Programs – Influence existing customers to remain brand loyal.
- Contests and Sweepstakes – Engage customers emotionally and promote brand interaction.
- Point-of-Purchase Displays – Influence impulse buyers at retail locations.
- Rebates – Appeal to price-conscious consumers after purchase.
- Trade Allowances – Motivate wholesalers/retailers to stock or promote products.
2. Sales Promotion Plan for Cajun Chicken Sandwich
Objective:
To create product awareness and drive initial trial purchases without significant advertising expenditure.
Sales Promotion Plan (Low-Budget):
- Free Sampling at Peak Hours: Offer bite-sized samples in-store during lunch/dinner times to generate awareness and encourage instant purchases.
- Combo Meal Discounts: Introduce a limited-time combo (sandwich + drink) at a discounted price to provide perceived value.
- Referral Coupons: Give customers a “bring-a-friend” coupon that gives both the referrer and friend a small discount.
- Loyalty Stamp Card: Offer a free sandwich after 5 purchases to build repeat visits.
- Social Media Contest: Run a low-cost contest where customers post a photo of themselves enjoying the sandwich for a chance to win a free meal.
Explanation
Sales promotion serves as a vital tool in the marketing communication mix by providing short-term incentives that motivate consumers to take immediate purchasing action. Unlike advertising, which focuses on building long-term brand image, sales promotions are designed to drive quick results, such as increasing product trials or boosting short-term sales.
The primary factor determining the objectives of sales promotion is the product life cycle stage. For a new product, like a Cajun chicken sandwich, the focus is on creating awareness and encouraging trial. In later stages, objectives may shift to loyalty-building or market expansion.
Different sales promotion techniques serve various customer segments. Coupons and rebates appeal to price-sensitive buyers, while free samples are ideal for customers hesitant to try unfamiliar products. Loyalty programs reward repeat customers, and contests engage tech-savvy or brand-engaged users.
Given the limited advertising budget, the Cajun chicken sandwich should be introduced using low-cost sales promotions. Free sampling can attract foot traffic and reduce the risk associated with trying something new. Combo discounts provide added value, while referral programs tap into word-of-mouth marketing. Loyalty cards and social media contests are cost-effective ways to foster brand engagement and repeat business. Together, these promotions can generate trial, create buzz, and build an initial customer base at minimal cost.
