factors affecting sales promotion growth

Maruti has different brand of cars 800, Alto, Wagon-R, Swift etc. The distinction is very conspicuous, in the case of industrial buyers’ and consumer buyers’ market. These factors are called product-market factors. Determining the promotional budget is a significant task of the retailer. This helps to build strong consumer demand and brand loyalty. Sales managers play such a pivotal role in the performance of their sales force. During the conviction stage, personal selling is very effective. Improvement in the growth monitoring can only be successfully undertaken if the a. It's crucial to build and maintain a good network of suppliers. Firstly in terms of the price of the competitor’s brand and secondly in terms of the margin allowed to the middle-men. d. Decline stage- Personal selling is done in this stage because it is economical and because sales are declining so promotional expenses are stopped. Pricing decisions are crucial in deciding promotional strategies to be used as a part of promotional mix. These Five Factors Are Affecting Revenue Growth A study by Bain and Company shows an alarming trend: the cost of sales and marketing is growing faster than revenues. But if the market size is large the promotional tool is mainly advertising. The nature of the product dictates the combination of different promotional tools that would best suit its requirements. 9. During the introduction stage, the customers are to be informed about the availability of the product and educated about its benefits and uses. The product type i.e., industrial or consumer affects the promotion mix. ©2021 ScienceTimes.com All rights reserved. Kotler (2000) highlighted that sales promotion is the short-term incentives to encourage purchase or sales of product or service. That is attractive to customer. Past Economic Performance Let's take a look at them now. There are many factors which influence promotion mix. Advertising is used for such products on a mass scale at a high frequency. In case of pull strategy marketer also spends on advertising and on consumer sales promotion such as free samples: A firms branding strategy implies using goodwill of its existing brand name to promote new product. The promotion mix will consist of press ads, magazine ads, TV spots, cinema slides, incentive offers, contests, etc. Product comes and goes from market. Inclement Weather/Natural Disasters Often last minute or unexpected weather conditions will heavily influence your marketing plans. Advertising play more of an informative role where as personal selling plays more of a persuasive role. Generally product is withdrawn because of introduction of upgraded version of the same product or newer version of product with some major amendments. Many grocery items (generally mass consumption items) are best promoted primarily through mass consumer advertising combined with good display at retail level; while most of the drug products are not placed for mass advertisement in newspapers and popular general journals. The particular way in which a marketer combines promotional activities is known as promotion mix. Companies with larger resources can go for large scale and more sophisticated promotion tools. The market position of the competitors' products plays an important role in determining the sales of a particular business' product. It is a cycle called as product life cycle which involves steps from which it passes. However, if intensive distribution is used, means firms appoints many distributers. Products targeting children will not use press advertisements as a means of promotion. Sales promotion offers incentives and induces buyers to buy now. Introduction to the market- High level of advertising is generally required in this stage because it decides future of the product. If the marketer has to provide realistic solutions to the problems of the buyers, they must know their customers, their needs, their desires, their attitudes, values, expectations and aspirations. There are so many factors that I need hours to right it down, but may give a direction: 1. An image must be created for each brand in order to accept the brand at each level of marketing channel. For example, advertisement for woolen clothes are useless in deserts. It is a common practice of combining various factors of promotion mix for efficient and better marketing management. Nature of product undoubtedly affects promotion mix for some obvious reasons. Before publishing your Articles on this site, please read the following pages: 1. Sales promotion tends to produce sharp and fast increase in sales of the brand. But small firms with limited resources can depend on personal selling. The internal factors originate within the company, and it's the company that has control over them. Sales promotions are mostly for short duration, for a specified period, leading to a sense of urgency in consumers to buy now. In case of industrial goods (like plant, machinery etc.) The manufacturer invests heavily in advertising so that the retailer suggests the retail selling price. If customers are scattered over different areas then mass advertisement campaign is useful and essential and in that case personal selling becomes ineffective. The availability of raw materials, consumables, and components can affect the sale of a finished product. Similarly, sales force contests are arranged to stimulate the efforts of the salesmen. In a small business that the owner(s). It shows the degree to which a marketer’s brand usually affects the Promotional mix. The image and reputation of the brand cannot be separated from the corporate image and reputation of them. The leadership factors focus on the people at the top. c. Maturity of product- This stage is of high level of competition and hence advertising is assisted with sales promotion in the form of attractive offers and contests etc. But at the declining stage advertisement and sales promotion are reduced to the minimum. (b) By capturing larger share of the total market demand – This can be done by pursuing the users to switch over to company’s product. Fund Available for Market Promotion: Financial capacity of company is a vital factor affecting promotion mix. Industrial strategies are mostly the push type of strategies relying mostly on personal selling. Pricing strategy influences the promotion mix in two ways. When a producer’s brand is not differentiated from that of competitor’s (e.g., sugar), the producer has to depend on personal selling. Factors influencing a Sales Forecasting: A sales manager should consider all the factors affecting the sales, while predicting the firm’s sales in the market. They are mostly advertised in medical journals and personally promoted be medical representatives or salesmen pharmacists. These elements thus play various roles in overall marketing strategy and if the management that has to decide a suitable promotional mix to suit the needs of the concern. Factors Affecting Growth & Profitability of the Retail Industry. In the growth phase, the demand is high and customers have more disposable income, while in a recession phase, money is reduced as well as the demand and supply of a product. All Rights Reserved. In this article, we will cover some factors that may affect sales performance, whether they are internal or external. To experience the product and ask questions. It starts from introduction to the market and ends being obsolete. The promotion strategy varies with the target groups depending on age, sex, education, income, religion etc. The price level, national income, profit rates, interest rates, rental rates all help to decide the first market potential and later the sales forecast. Personal salesmanship has a secondary role in pull promotion and the marketer relies on intensive distribution. Factors Affecting Promotion Mix – Nature of Product, Nature of Market, Stage of Products Life, Availability of Funds, Distribution Strategy, Pricing Strategy and a Few Others Designing a proper promotion mix is called promotional strategy. People are buying product and advertising ensures continuity in this sale. Repeat sales are stimulated and product substitution is not possible. Due to this kind of intense mass communication, the consumers demand the product to such an extent that they literally pull the product from the retailers who in turn demand the product from the wholesalers, and the wholesalers on their part are forced by pressure of demand to stock the product. Factors Responsible for Rapid Growth of Sales Promotion. However, for th e most part, this st age is characterized by increased sales. The goal is to have sales managers with both the skill and the will to reinforce and support any sort of change or developmental effort. There are many factors which influence promotion mix. In such cases, personal selling may be the best promotional device, persuading the proper outlets to stock the product and to push it over competitive branch when final buyers come to buy. In the words of Whitehead “In case of an expanding market, the firms may stand to gain by following the methods of Aggressive Selling. Personal selling is flexible and personal form of promotion. In general sales promotions can built on brand sales more rapidly than advertising. Similarly, convenience items like gift packs are promoted through personal selling combined with window display, while many of industrial products most of high unit value require a quite different mix. Store owners should consider implementing an inventory management software to manage their stock and in the right way. Where one brand is different from other. Aggressive brand advertising and dealer promotions become important components of the promotion mix at that stage. If a product is for kids, printed advertisement tends to be useless. In a nutshell, one can asset that promotion is a key element in overall marketing strategy. are factors that must be considered as potential deter-minants of successful promotions. Hence, Promotional Strategy changes from time to time. The business should ensure that they maintain the quality of the product and add or modify the functions according to the ever-changing technology and the varying tastes and preferences of the customers. Closing the sale is influenced mostly by personal selling and sales promotion. Following are the major factors considered by companies while determining the promotion mix strategy: When the target market is large and spread over a wide area across the country, advertising and sales promotion are considered to be more effective media of promotion. If the products are directly sold by the manufacturer personal selling is the tool of promotion. To achieve this, a company may introduce new products, promote them through. The ratio of pull to push may differ according to the requirements of the market situation. Hurricane affects may require your marketing strategies to focus on discounts during the season or heavy promotion after the season. Nature of the Product 2. Various stages of product life cycle affects different promotional mix. Direct marketing sales promotion and publicity help reach potential customers and induce trail purchases by offering coupons and free samples. Advertising in reputed magazines and journals is very costly, but can attract the status conscious customers towards the product of the firm. 285 Advertising and Sales Promotion ManagementSALES PROMOTION CONSUMER PROTECTION IN INDIA FACTORS AFFECTING THE CONTEST THE TYPE OF THE CONTEST THE PRIZE OFFERED THE PROMOTION OF THE CONTEST THE RULES GOVERNING THE CONTEST 13. Promotional mix includes an ideal proportion of each element of promotion i.e., advertising, personal selling and direct promotional activities. Creating well-defined marketing strategies, promotion ideas, using the right sales enablement platforms, and staying updated with current market trends can help the organization to achieve higher sales volume. But a firm with financial constraints will be selective in the use of promotional activities. 1. The message through advertisement is relatively simple and easily understands. Factors affecting the choice of promotion method Promotion is a critical determining factor for the success of a marketing program. Advertising is the most commonly used tool of promotion. That is why, most of the firms make use of all kinds of promotional activities to launch their products successfully. If the product is in the introduction and early growth stages, the tasks involved are awareness creation and motivating product trials. Various promotion mixes may differ in their effectiveness in attaining these two different aims under various conditions. During growth stage advertising should be extended to maximize the market share. During the decline stage sales promotion is used to push up sales. If the brand is priced higher than the competitors’ price, personal selling is adopted. Pricing affects choice of promotional tool for a product. Product - Quality - Price - Reputation - Brand Position - Availability - .... 3. Prehistoric "Hell Ant" Encased in Amber Seen Biting its Prey for Over 99 Million Years, Top Things to Consider Before Buying an Electric Car, Mars Curiosity Rover: What You Should Know About Its Long Mission on Mars, Researchers Report Progress on Greener, More Sustainable Hydrogen Extraction from Water, French Man Dies From Rabies After Contracting Bat Virus, Coral Reef Restoration Needs Researchers Help, Water May Have Been Recently Carried by Meteorites From the Dawn of the Solar System, The Legendary Sports Handicapping Expert Cody Vaujin Shares His Best Tips for Scaling a Business, SpaceX Kicked Off 2021 With First Launch This Year Sending Turksat 5A to Orbit. They are the ‘push’ strategy and the ‘pull’ strategy. In Nigeria, corruption occurs in many areas but the most common is corruption of government officials. Sometimes because of non-availability of some promotional methods, marketer must select appropriate method from those which are available. Because consumers often buy on emotions, ads can affect the buying decisions. Simple and non-technical products require advertisement. Such is the high brand value of apple that people were actually looking forward for i-phone 5 and created massive demand for the same. raw material, plant and machinery, furnace, equipments, tools and parts etc. Welcome to EconomicsDiscussion.net! To make personal selling highly effective, sales force promotion is essential. The rapid growth of sales promotion is due to the fact that product managers are faced with greater pressure to increase their current sales and sales promotion as viewer as an effective short-term sales tools. During the maturity stage, the emphasis will be on switching the customers from competitors and hence more of sales promotion is used. The promotional strategy also depends upon the channel or the route through which the products flow from the firm to the consumer. The marketing objectives and strategies are different at each stage of the product in its life cycle. This is done in case of daily usable goods and articles like salt, toothpaste, washing powder, detergents, soap etc. Education is also a major factor in selection of promotion mix. If a product is of complex nature. But in case of products having much differentiation like cosmetics, advertisement shall occupy a prominent position in the promotional mix. If it is narrow and limited personal selling can be effective. Consumer products are often advertised on television in a way that tries to create an emotional tie with the buyer. Large size of market for example demands advertisement and there, personal selling is ineffective. Sale… 1. Marketing is too important and too expensive to just “have” if it doesn’t impact sales in a measurable way. Most companies have pressure for short-term profits, a drive that sales promotion satisfies. Experienced buyers of industrial product need personal selling. Various aspects are required to study before setting prices which includes profitability, skimming, market share, survival, estimated demand curves etc. But in case of financial constraints the firm has to be selective in use of promotional tools. Pronouncements of laws by the government regarding the legality of the product, its minimum pricing requirements, and taxes can affect sales of that particular product. b. The tools of sales force promotion are bonus, sales force contests, and sales meetings and conferences. But during the last stage of the product when its sales are declining, it may be decided to make drastic cuts on promotional efforts. require mass advertisement. Nature of Technique 13. The experience of buyers, the time available for purchase, influence of friends, retailers etc. To give the customer detailed and personalized information in case of consumer products heavy emphasis is placed on advertising. (iii) It can use a combination of new and existing brand elements. If the middle­men are allowed higher profit margin, the middlemen are motivated to stock and push the brand and very little advertisement may be required. Every firm has a unique public image in the market. The company needs to be mindful of maintaining its quality and adding or modifying the functions and utilities according to the changing technologyand varying tastes and preferences of the consumers. In industrial buyers’ market, advertising and personal selling both play important roles. Expertise requires for production and sale of such types of products hence personal selling is done with the help of experts as salesmen. The cost of the media of advertising and sales promotion tools should also be considered while deciding the promotional mix. In pull strategy producer directly takes responsibility of sales promotion via mass communication and advertisement. Thus, purchase frequency has a decisive role in the determination of promotion mix. How to blend all these four elements of the promotion mix, the amount to be allocated for the various forms of promotion, such decisions are influenced by the following factors: The nature of the product determines the form of promotion undertaken by the marketer. Aggressive selling answers the question —how much does the firm gain (in terms of sales volume with profit) by employing the various resources? Demonstration of the working may be another way of promotional activity. The marketer may depend upon mass advertising media to develop brand recognition among consumers, which creates a favourable disposition towards the product. 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