SALES promotion�SALES Forecasting��

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BACHELOR OF DESIGN

Semester V�

Subject: Business Studies

Dr. Rakhi Mehta

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SALES PROMOTION

Sales promotion is a set of marketing technologies aimed to stimulate the demand in particular products and increase brand awareness. Limited in time, it creates a feeling of time-sensitiveness, generates new leads, and keeps existing customers engaged. Sales promotion is one of the core elements of the promotion mix. To build long-lasting relationships with users, you need to find out the types of sales that work with your target audience. At the same time, you should provide customers with value that’s relative to your field of expertise.

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It helps to generate new leads.- Sales promotion can boost your product image since it encourages sharing information about it within social groups related to your business. If you sell training football shoes, people keen on playing football will share the message.�Allows re-engaging with your existing audience.- Once a person subscribed to a brand’s email newsletters, they will receive regular sales promotions. It is a way to keep the audience engaged and maintain a close connection with the company, which is crucial for building loyalty.�Skyrockets revenue.- Sales promotions help companies to increase the number of sold goods, even though they need to lower the price to achieve that goal. Of course, merely reducing the price is not enough, people should need your product, while the discount is only another reason to make a purchase.�Increases brand awareness.- Sales promotion is a way to make a name for your brand because people are more likely to talk about a сompany that proposes benefits and saves their money. That’s what sales promotion does.�

Benefits of Sales Promotion

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SALES PROMOTION OBJECTIVES

1. Launch a new product.- If you're going to expand and turn your small coffee shop into a bakery, you need to reach new market segments. You can attract new customers by offering a free cookie with each cup of coffee or suggest visitors set their own price once in a while.
2. Attract new clients.- This objective should be your long-term goal since it allows your business to grow. Your potential clients are likely your competitors' customers, so analyzing their product and benefits, you can offer something more valuable.
3. Stay competitive.- Researching and analysing your competitors will not only help you attract new clients but constantly improve your product and customer service.
4. Sell during the off-season.- Goods like swimwear, boats, tents, air conditioners, refrigerators are definitely more popular in summer but you should consider special strategies to sell them throughout the year. Offer time-limited discounts, "1+1=3" campaigns, and other marketing tricks.
5. Run clearance campaigns.- They're especially popular before summer and winter. As dealers need to make room for a new collection, they often run total clearance campaigns when users can buy goods from old collections at extremely reduced prices.

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TYPES OF SALES PROMOTION

• Price deal. It is a temporary cost reduction, for instance, 20% off for a coffee for a week.
• Giveaways. These tactics aim to increase brand awareness. It means giving some items for free in exchange for personal information to use in further marketing. For example, offer a free cup of coffee in exchange for a phone number, which you can use for many purposes: promoting new sales, sharing updates and news with short text messages, etc.

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There is a variety of ways to run a successful sales promotion, but let’s focus on some most frequently used ones, using a cup of coffee as an example.

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• Coupons. You can sell coffee for the original price and give a coupon, which will make the next purchase 5% cheaper.
• Mobile couponing. It stands for coupons received on mobile phones via SMS. To get a discount, a customer needs to show the coupon on their smartphone.
• Sampling. Choosing this promotion type, companies give a sample of the product; for instance, the first cup of coffee to promote a new taste.
• Bonus-pack deal. It means that a customer can get more products paying the original price. For instance, they pay a dollar for one cup of coffee and get free candy, which gives some positive emotions and makes them come back in the future.
• Loyalty reward program. This means that customers collect points or credits when they buy coffee. If they get 10 points, for example, they will have one coffee for free.
• Free shipping and/or transfers: Free shipping promotions attempt to curb the 70% of customers who abandon their carts when they see the shipping costs. The small loss in shipping fees is usually made up for in happy customer purchases.

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• Competitions and challenges: Competitions or challenges usually take place on social media, and serve to increase customer engagement as fans try to win a discounted or free product. They usually also result in a large amount of free publicity if the competition or challenge involves sharing the brand on a customer’s personal social media account.
• Product bundles: Product bundles offer a collection of products for an overall discounted rate, as opposed to buying the products individually. Product bundles give customers a reason to buy a larger variety of products, which makes it more likely they will find a product they like and want to buy again.
• Flash sales: Flash sales are extremely short sales that offer extreme discounts for a limited amount of time. These sales work through creating a sense of urgency and need around your sale.
• Free trials: Free trials or demos are one of the most common sales promotions and one of the most promising strategies to grow a customer base. Businesses can offer either a limited time with the product or a limited quantity of the product to a first-time buyer at no charge to see if they like it.
• Free products: Free product promotions work by offering a small free product with the purchase of a larger, mainstream product. This boosts mainstream sales without costing the company too much inventory or revenue.

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SALES PROMOTION TECHNIQUES

• Discounts
• Time-limited offers
• Seasonal promotions
• “1+1=3"
• Holiday promotions
• Gifts
• Contests
• Reward points
• Special prices
• First-purchase coupons
• Free shipping

In this section, you'll see some popular techniques as well as less used methods that will help you increase sales without much effort.

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1. Discounts. This technique is as old as the hills. Small companies and big corporations use this method to sell more. One of the reasons it's so popular, even today, is that discounts are great for both consumers and retailers. Sellers can clear room in their warehouse for new arrivals and customers can buy more at reduced prices. Keep in mind that a normal discount should be between 5-20% since clients won't even notice less than 5% discount, but more than 20% off will make them feel suspicious about your brand.

2. Time-limited offers. This technique works even better than a big discount. With this trick, marketers manage to create a sense of urgency and fear of missing out on their products. You can give clients 24 hours to grab this special offer. To make this technique perform better, you need to advertise your promotion on each channel you use. This will bring more sales and increase your site traffic.

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3. Seasonal promotions. People often buy ski suits in summer and air conditioners in winter to save money. Selling products during off-seasons can be a real challenge, so we strongly recommend you to run seasonal promotions. Sell items from old collections at reduced prices and don't forget to advertise your campaign via email and social media.

4. “1+1=3". "Buy one and get one for free" and "Buy 2 items and get the third one for free" are very familiar marketing tricks. Such campaigns help you sell products at a low price or save money shopping together with a friend. Retailers can significantly boost sales with this technique reinforcing clearance sales.

5. Holiday promotions. Christmas, New Year's Eve, Halloween, International Women's Day, and Valentine's Day are great chances to skyrocket sales. People are extremely generous when buying presents for their friends and family. Launch your holiday campaigns in advance, and invest in advertising via email, PPC, social media, and other channels. This will help you increase brand awareness and site traffic.

6. Gifts. Who doesn't like freebies? If you are a startup or about to launch a new product, go for this technique. It will help you reach big audiences fast, build brand recognition, and collect user-generated content which is especially valuable for every type of business. Let users try your service for free for 7 days, launch a campaign that will let each client who spends $100+ receive a gift, or give away free samples with each order.

7. Contests. Competitions are a great opportunity to boost user engagement and increase brand awareness and sales. You can let your audience to create a slogan for your brand, a new advertising message, design, or share creative ideas on how to use your product in an unusual way. Make sure that the prize correlates with the effort spent on participating in your contest.

8. Reward points. You definitely should reward clients who buy from you regularly - people love brands that appreciate their choice. So, with this technique, you can start building customer loyalty. Give points to each client who makes a second purchase or spends a certain amount of money. Then, let them exchange those points for a product they like.

9. Special prices. Marketers usually run a 1-day campaign when users can buy everything at a fixed price. These prices usually look tempting for users and they can’t overcome the feeling of missing out. The goal may be an annual clearance of goods. You can set a fixed price for each product category of your store. For example, sweaters for $5.99, jeans for $9.99, coats for $15.99. This technique works.

10. First-purchase coupons. It always takes time for people to give money to a new store especially when buying expensive products. To make them think over the purchase faster, offer a special incentive. You can send a welcome email to a new visitor with a coupon to get a 10 or 15% discount off their first purchase. For better performance, limit this appealing offer to a couple of days.

11. Free shipping. Very often users leave your site without buying just because of expensive delivery options. To win back these potential clients, you can run a time-limited campaign that allows them to receive their orders for free if they spend a certain amount of money. If you sell medium-priced goods, do not make this fixed sum too high. Otherwise, people won’t fall for this trick.

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SALES PROMOTION EXAMPLES

Email marketing

It is one of the most efficient digital marketing channels, with the ROI up to 4000%. Marketers use sales promotion for lead nurturing, reactivation, promotion, etc. To succeed, marketers combine sales with educating materials. In this sales email, Grammarly offers users a chance to upgrade to a premium plan and shows the multiple benefits and suggests taking advantage of the 40% discount limited it time.

Email is also an effective platform for holding giveaways. You can create a giveaway campaign on specialized resources like Rafflecopter, and keep users engaged with giveaway emails along the way. The example below shows how the Apple Music Festival encourages people to participate, using the names of famous artists who are going to perform there.

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Facebook marketing

Facebook is one of the most powerful advertising platforms due to its global coverage and detailed targeting options. Facebook marketing allows using various types of ads to fit any demand and budget. Here’s an example of a carousel ad with a 10% discount by iHerb.

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SMS marketing

This channel is excellent for instant updates and flash sales. It works out well for local businesses. The example below shows how sales promotion in SMS marketing can create a sense of urgency, stimulating people to visit a restaurant for lunch.

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PROS OF SALES PROMOTION

1. Creating new leads: Sales promotions increase customer acquisition by offering them discounts, free products, free trials, and more. Many potential buyers are willing to try something for a lesser price, and if they like the product they become part of your company’s loyal base.
2. Introducing a new product: Even extremely successful companies need a little help launching a new product. New customers may need incentives to buy, and long-term customers may be committed to their usual products. Providing a discount or promotion on a new product is a great way to create product awareness without doing a sales presentation.
3. Selling out overstock: No one wants to be in this position, but overstocking happens. When it does, a sales promotion can be a useful tool to get rid of inventory while attracting new customers who may not have the overstocked product yet. It’s worth noting that there is a line in terms of selling overstock and it’s easy to step over into unethical selling.
4. Rewarding current customers: Sales success doesn’t stop at the first purchase. Nurturing customers over time is essential to keeping brand credibility and loyalty high. Sales promotions are an easy way to provide loyal customers with a discount, voucher, or free product that will continue to keep them engaged with your brand.
5. Increasing last-minute revenue: Many companies use sales promotions towards the end of a month or quarter to meet revenue or inventory goals. While not a bad strategy, it’s best to use this one sparingly so that customers don’t get into the habit of waiting for an expected sale

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SALES FORECASTING

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SALES FORECASTING

SALES FORECASTING

This type of forecasting can be defined when it covers a period of months, six months or one year.

Generally, the last one is most preferred The period is dependent the nature of business. If the demand flucates from one month, forecasting may be done for only a short period.

Short term forecasting

• To adopt suitable production policy to that the problem of overproduction and short supply of raw materials, machines, etc can be avoided.
• To reduce the cost of raw materials, machinery etc
• To have proper control target of inventory.
• To have proper controls.
• To set the sales target.
• To arrange the financial requirements in advance to meet the demand.

Purpose of short term forecasting

LONG term forecasting

The forecasting that covers a period of 5, 10 and even 20 years. The period here also depends upon the nature of business, but beyond 12 years, the future is assumed as uncertain. But in many industries like ship building, petroleum refinery, paper making industries, a long term forecasting is needed as the total investment cost of equipment is quite high.

Purpose of short term forecasting

• To plan for the new unit of production or expansion of existing unit to met the demand.
• To plan the long-term financed requirements.
• To train the personnel so that man power requirement can be met in future.

IMPORTANCE OF SALES FORECASTING

Sales forecasting is a very important function for a manufacturing concern, since it is useful in following ways:

• It helps to determine production volume considering availability of facilities, likes equipment, capital , manpower, space, etc.
• It forms a basis of sales budget, production budget and natural budget, etc.
• It helps in taking decision about plant expansion and changes in production mix of should it divert it's resource for manufacturing other products.
• It helps in deciding policies.
• It facilitates in deciding the extent of advertising etc.
• The sales forecast is a commitment on the part of the Sales department and it must be achieved during the given period.
• Sales forecast helps in preparing production and purchasing schedules.
• Accurate sales forecasting is a very good aid for the purpose of decision making
• It helps in guiding marketing, production and other business activities for achieving targets

THANK YOU

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