Marketing Insights From a to Z: 80 Concepts Every Manager Needs to Know

“The salesmen’s
anxiety ends and the customer’s anxiety begins.”
(Theodore
Levitt)
Sales Force
159

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ales Promotion
160
Sales promotion describes incentives and rewards to get customers to
buy now rather than later. Whereas advertising is a long-run tool for
shaping the market’s attitude toward a brand, sales promotion is a
short-term tool to trigger buyer action. No wonder brand managers
increasingly rely on sales promotion, especially when falling behind
in achieving sales quotas. Sales promotions work! Sales promotions
yield faster and more measurable responses in sales than advertising
does. Today the split between advertising and sales promotion may
be 30–70, the reverse of what it used to be.
The growth of sales promotion reflects the higher priority com-
panies are attaching to current sales than to long-term brand build-
ing. It is a return to transaction marketing (TM) rather than
relationship marketing (RM).
Sales promotion can be directed at retailers, consumers, and the
sales force. Retailers will work harder if offered price-offs, advertising
and display allowances, and free goods. Consumers are more likely to
buy in response to coupons, rebates, price packs, premiums, patron-
age awards, contests, product demonstrations, and warranties. The
sales force operates more vigorously in response to contests with
prizes for superior performance.

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Because of the variety of sales promotion tools, marketers need
experience in knowing which to use. Some large companies have a
sales promotion specialist who can advise brand managers. Or the
company can engage the services of a specialist sales promotion
agency. The main need is to not only use promotions but to review
and record results so that the company can improve its sales promo-
tion efficiency over time.
Although most sales promotions increase sales, most lose
money. One analyst estimated that only 17 percent of a given set of
sales promotion campaigns were profitable. These are the cases
where the sales promotion brings in new customers to sample the
product and where they like the new product better than their previ-
ous brand. But many sales promotions only attract brand switchers
looking for a lower price, who naturally abandon the brand when an-
other brand goes on sale. Sales promotions are less likely to entice
away loyal users of other brands.
Thus sales promotions work poorest in product markets of high
brand similarity. They tend to attract brand switchers who are look-
ing for low price or premiums and who won’t be loyal to a brand. It
is better to use sales promotions in product markets of high dissimi-
larity where new customers may find that they like your product and
its features better than their previous choice.
Sales promotions tend to be used more by weaker and smaller
brands than stronger brands. Smaller brands have fewer funds to
spend on advertising, and for a small cost they can get people to at
least try their product.
Sales promotions in general should be used sparingly. Incessant
prices off, coupons, deals, and premiums can devalue the brand in
the consumers’ minds. They can lead customers to wait for the next
promotion instead of buying now.
Companies are forced to use more sales promotion than they
want by the trade. The trade demands discounts and allowances as
a condition for putting the product on the shelf. The trade may
Sales Promotion
161

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demand consumer promotions also. So many companies have little
choice but to comply.
Prefer sales promotions that agree or enhance your brand image
and add value. Try to use sales promotions 
with
advertising. Adver-
tising explains why the customer should buy the product, and sales
promotion provides the incentive to buy. When used together, ads
and sales promotions make a powerful combination.