Academic journal article Journal of Contemporary Management Research

Personal Care Products: Sales Promotion and Brand Loyalty

Academic journal article Journal of Contemporary Management Research

Personal Care Products: Sales Promotion and Brand Loyalty

Article excerpt

INTRODUCTION

Promotion has become inevitable part of marketing to survive in today's competitive business environment. Companies are using all possible promotional tools like advertising, sales promotion, personal selling, publicity and public relations to maintain and grow their share in market. Among all such strategies, advertising and sales promotion are the two aggressively used strategies that cater to the same objective albeit by different mechanism.

Advertising is a popular promotional tool adopted by companies to increase sales and build a brand by disseminating product information to customers. Advertising intends to cultivate a desire among its target audience for the product for reasons that may be as diverse as fulfilling a basic need (e.g. detergents for washing clothes) to feeding psychological needs like enhancing glamour and esteem (e.g. high-end automobiles). Sales promotion, on the other hand, gives incentives to consumers and traders with a short-term objective to increase sales during the promotional period and long term objective to retain customers who buy the product under the influence of promotional schemes.

Sales promotion, as defined by the Institute of Sales Promotion, comprises the range of techniques used to attain sales and marketing objectives in a cost-effective manner by adding value to a product or service either to intermediaries or end-users, normally, but not exclusively, within a defined time period. These techniques are mostly short term, designed to stimulate quicker or greater purchase of products by consumers or trade (Blattberg and Neslin, 2000).

Sales promotion can be broadly divided into two types: consumer sales promotions and trade sales promotion. In case of consumer sales promotion, the incentive is given directly to customers to motivate them to purchase the product. It is a pull strategy as it motivates customers to approach selling points to buy the promoted product.

On the contrary, trade sales promotion is a push strategy where incentive is given to intermediaries, who operate between producer and end user (e.g. wholesalers, distributors, agents and retailers), to encourage them for putting extra efforts in selling (pushing) the promoted product. The ongoing "mad scramble" for shelf space reinforces critical importance of trade sales promotion based strategies to achieve desired results (Uva 2000).

Success of sales promotion strategy is greatly influenced by the nature of incentives. The incentives offered under sales promotion can be broadly divided into two types: Utilitarian and Hedonic. Utilitarian benefits, e.g. price-off and quantity discount, are primarily functional and relatively tangible. They enable consumers to maximize their shopping utility, efficiency and economy. Hedonic benefits, e.g. entertainment, are more experiential and relatively intangible. They provide consumers with intrinsic stimulation, fun and pleasure.

Comparing sales promotion and advertising, sales promotion is a better tool in gaining market share in short term. Customers respond more positively to sales promotion than advertising due to direct and tangible benefits that promotions offer to customers. Further, advertising is also slowly losing its effectiveness due to rapidly swelling number of media players and consequent fragmentation of target audience. From companies point of view too, result of sales promotion can be measured more accurately as compared to advertising since the sponsor company wants accountability for the money they are spending for promotion. Thus sales promotion based strategies are increasingly attracting more share of company's promotional budget. This is supported by AC Nielsen's estimate that marketing expenditures split 60:40 in favor of promotions over media (Source: AC Nielsen Home-scan, 2003 - France, Germany, Italy, Spain, UK). In many European countries promotional expenditure are larger than advertising expenditure (D'Astous and Jacob, 2002). …

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