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Sales Promotion Techniques Essay

937 words - 4 pages

Sales promotions are programs designed by marketers to build interest in a product or service and encourage the purchase of that product within a specified period of time. The programs try to entice customers to try a new product or produce more sales quickly. There are four techniques commonly used. The four techniques are: discounts and deals, increasing industry visibility, price-based consumer sales promotion, and attention-getting consumer sales promotion.The first two techniques, discounts and deals and increasing industry visibility, fall under what is known as trade promotions. Trade promotions are focused towards the channels that sale the product or service. These channels can be retailers or wholesale distributors. Discounts and deals are basically price breaks for the retailers. This encourages retailers to stock the product and give it plenty of visibility. There are two different ways this can be done. Discounts and deals promotions can be offered through a merchandising allowance or case allowance. The merchandising allowance is when a manufacturer reimburses a retailer for in store support of a product. An example of this would be Best Buy putting Sony televisions at the front of the store and advertising a special price. Best Buy would then get an allowance for their in store advertising of the product. Another way a manufacturer gives discounts and deals is through offering a case allowance. This is when a manufacturer gives a larger discount for the larger volumes of product ordered. An example of this would be a retailer buying 50 of a product for $10.00 each or ordering 200 for $9.00 each. This can be a good thing for manufacturers because it increases sales in one sale, but it can also be very bad. It is bad through a process called forward buying. Forward buying means that a retailer will buy large quantities of the product during the promotion and not order again until the next promotion.Increasing industry visibility is just as it sounds. This is when the manufacturer tries to increase their visibility to retailers through three different techniques. These techniques are trade shows, promotional products, and push money. Trade shows are where manufacturers get together and invite retailers to see their products. These are usually held in large convention centers. Every year a technology convention is held in Las Vegas for the various manufacturers to show off their latest and greatest products.Promotional products can consist of anything from t-shirts to ink pens with the company logo or catch phrase on them. Companies give these products out to retailers who use their product. This not only pleases the retailers, but is advertisement for the company as well. There are many examples I could provide for this. Glock will give gun salespeople clothing with their emblem on it. This is...

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