Consumer product companies are launching nearly more new products each year. Also Read: 9 types of Consumer Sales Promotion tools. Advertising b. Sale… Top 10 Need & Importance of Workers Participation in Management. Generally, sales promotion plays a pivotal role in consumer marketing but the same is not always true for industrial marketing. Factors for church growth in first century Book summary 1: Spiritual Leadership by J. Oswald Sanders How to read the Bible for all it's worth-book summary Factors ... and entered on a period of rapid and wide diffusion. Factor 4: Leverage Intelligent Sales & Marketing Data for Revenue Growth. (a) Promotion mix (b) Sales promotion (c) Trade promotion (d) Discount coupon 8. ADVERTISEMENTS: Advertising and Sales Promotion! The nineteenth century saw the introduction of magazines which also grew into a big advertising medium. The sales promotion department is responsible for maintaining such a cordial relationship with dealers so that the goods move quickly along the channel of distribution. Promotion based on price creativity, where additional benefits are informed through price adjustments as used in restaurants, clinics and hospitals. More competition and a decline in differentiation of brands. Similarly, sales force contests are arranged to stimulate the efforts of the salesmen. Sales promotion is a part of the promotional mix where the business uses many short-term customer-oriented strategies to stimulate the demand for its product by making it look more attractive and/or worthy. At this point in your product's life cycle, you should be putting your efforts into:. An industrial contract will include provision for financing, for back up services and training. With sustained growth and rapid growth though there is a risk of overpopulation. The tools of sales force promotion are bonus, sales force contests, and sales meetings and conferences. Definition of sales promotion SALES PROMOTION: Consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade. Growth of mobile commerce The dealers are supplied with sales literature by the manufacturers. Another factor that led to the increase in sales promotion is manufacturers’ reliance on trade and consumer promotions to gain or maintain competitive advantage. Many companies are demanding to know what they are getting for their promotional expenditures. As the consumer market becomes more fragmented, many companies are tailoring their promotional efforts to specific regional markets. Sometimes, it prepares the ground for the salesmen to meet the prospects by sending them circular letters and sales literature. Sales Promotion of Industrial Products, 9 types of Consumer Sales Promotion tools, Outdoor Advertising | Kinds | Advantages | Disadvantages, Notes on Information Processing | 5 Important Stages, Loyalty Schemes | Co-op Dividend | Features of Successful Loyalty Scheme, Promoter | Duties | Extent of Liability | Remuneration, Weaknesses of Trade Union Movement in India and Suggestion to Strengthen, Audit Planning & Developing an Active Audit Plan – Considerations, Advantages, Good and evil effects of Inflation on Economy, Vouching of Cash Receipts | General Guidelines to Auditors, Audit of Clubs, Hotels & Cinemas in India | Guidelines to Auditors, Depreciation – Meaning, Characteristics, Causes, Objectives, Factors Affecting Depreciation Calculation, Inequality of Income – Causes, Evils or Consequences, Accountlearning | Contents for Management Studies |. The external factors included the increase of the price for oil in the late 1970s, which sharply raised foreign exchange expenditure for energy. Premiums are merchandise offered at relatively low prices. The growth of huge supermarkets necessitated the need for aggressive selling. First, inside the company, products or sales managers face greater pressures to increase their current sales and top managers now accepts promotion as an effective sales tool. Third, the emergence of computer technology has enabled manufacturers to get rapid feedback on the results of promotions. Entrepreneurship is influenced by four distinct factors: economic development, culture, technological development and education. Several factors have contributed to the rapid growth of sales promotion. Choice of right sales promotion strategies has become important today. In fact, if I could go back and write my dissertation all over again (by the way, I would never do this! In most industries. Personal sellingis highly essential in marketing. This helps the salesmen a lot while selling. the battle is for market share rather than general product growth. If your product is satisfying the needs of the consumers at reasonable prices, it will sell. Sales promotions are often the most effective strategy for increasing sales of a product, particularly when the products in the category are largely undifferentiated. In addition to the rapid advances in scientific discovery and in general-purpose Retail prices soared during the inflationary 1970s because of the increased costs of labour, raw materials, and manufacturing. Brand Proliferation; 13. Another major reason for the increase in sales promotion is that consumers have become less brand loyal and are purchasing more on the basis of price, value and convenience. If your marketing and sales teams see themselves as a united force, at least 75% of your leads should be directly generated by marketing. There are a number of reasons that are favourable to the growth of sales promotion: ¨ Increasing Competition The air of change is gaining momentum after the introduction of economic liberalisation.Due to increase in competition, companies are finding it increasingly difficult to compete on quality. Read more. The rapid growth of sales promotions in consumer markets is most likely the result of all of the following factors EXCEPT _____. example, if accounts receivable on a balance sheet average $50,000 and sales average $500,000 per year, a balance of 10 percent exists between these items. Do you expect a ... home / study / business / business statistics / business statistics solutions manuals / Advertising Promotion and Other Aspects of ... Edit edition. Promotion is the direct way an organization attempts at reaching its market and is usually performed through Several factors have contributed to the rapid growth of sales promotion. In other words, the products are similar so promotions become the tiebreaker in the consumers’ decision making. Introduce a New Brand. a. The Growth stage is the second of stages in the product life cycle, and for many manufacturers this is the key stage for establishing a product’s position in a market, increasing sales, and improving profit margins.This is achieved by the continued development of consumer demand through the use of marketing and promotional activity, combined with the reduction of manufacturing costs. These conditions may have both positive and negative influences on the emergence of entrepreneurship. The sales promotion department arranges to train dealers about the various aspects of sales. Survival and employment growth contrasts between types of owner- managed high technology firms. Economic growth - Economic growth - The role of government: The differences in rates of growth are often attributed to two factors: government and entrepreneurship. Because advertisings benefits are often apparent in the long term only, companies invest more money in sales promotion when they want quick results. ADVERTISEMENTS: The major factors responsible for the growth of organised retailing in India are as follows: Organised retailing is a recent development. 4. Identify the Correct type of sale Promotion that fits and best suits the Brands; […] Managers who are being held accountable to produce results often use price discounts or coupons, since they produce a quick and easily measured jump in sales. Notify me of follow-up comments by email. a) declining interest in quality, b) increasing number of international firms c) rising hostility toward large firms d) increasing popularity of e-procurement , e) declining advertising efficiency. China's rapid economic growth has been mirrored by the big increase in its energy consumption. Product managers are under pressure to generate quarterly sales increases. Q21._____ is the factors contributing for the rapid growth of Sales Promotion. Factor 4: Leverage Intelligent Sales & Marketing Data for Revenue Growth. The present market situation shows that there is rapid growth of sales promotion though several factors have contributed to it, particularly in consumer markets. Their sales literature includes literature of all aspects of sales that assist dealers in making a sale. Old stocks and old models are also taken back by the manufacturers. 3. In areas where these factors are present, you can expect to see strong and consistent entrepreneurial growth. There are factors responsible for rapid growth of sales promotion discussed below. Consider all extra benefits and make priority of these benefits with a view to offering these to customers depending upon a particular sales situation. Choosing the right type of Sales Promotion Strategies. They want to achieve a rapid growth of market share (subject to the constraint that they need to achieve a minimum rate of profit (normal profit) to justify staying in the market in the long run). The goal is to identify and assess how changing elements of the marketing mix impacts customer behavior.. The sales promotion tools include coupons, contests, fairs and trade shows, exhibitions, demonstrations, premium, gifts, rebates, low interest financing and trade allowance. Related: Top 12 Strategies & Policies of Pricing in Marketing. The United States, for example, came forward with the “Innovate Amer ica” strategy in 2005. 1. This is due to managers need to increase sales (internal) & s… The brand can increase the sales by attracting new customers to their products or by retaining the old customers by various means. Sales demanding is more economically accountable than advertising. In the early stages of sustained growth, government has often provided the incentives for entrepreneurship to take hold. Another reason is that many purchase decisions are made at the point of purchase by consumers who are increasingly time-sensitive and facing too many choices. Another factor that led to the increase in sales promotion is manufacturers reliance on trade and consumer promotions to gain or maintain a competitive advantage. It is highly essential because it is only through dealers that a manufacturer sells his goods. Consumer Behaviour; 6. Two main environmental factors that have led to the growth of tourism: Good climate: Good climate is one of the most important features of attraction for any tourist place. Thus, now you know the major factors responsible for rapid growth of sales promotion. Sales Promotion Rapid Growth of Sales Promotion Types of Sales Promotions Consumer promotions Trade promotions Sales force promotion Sales Promotion Rapid Growth of Sales Promotion Factors in the Growth of Sales Promotions Product managers are under pressure to increase current sales. The sales promotion department usually arranges such contests to increase the efforts, and energies of the sales force. To make personal selling highly effective, sales force promotion is essential. The use of premiums in the direct mailing and selling of financial offers or financial services. Immediate Response; 4. Pleasant climate with warmth and ample of sunshine attracts tourists who come from the temperate and colder regions. Read more. Sales promotion c. Online advertising d. Public relations Answer: (b) 158. First, inside the company, product managers face greater pressures to increase their current sales, and promotion is viewed as an effective short-run sales tool. Factors Responsible for Rapid Growth of Sales Promotion. The two are not mutually exclusive. This, at times, leads to excessive inventories, and the quickest way to clear that is to go for sales promotion. A) declining interest in quality B) declining advertising efficiency C) rising hostility toward large firms D) increasing popularity of e-procurement E) increasing number of international firms Which of the following factors has most likely contributed to the rapid growth of sales promotion, particularly in consumer markets? Declining Brand Loyalty; 11. Promotions typically offer the consumer added value. A diverse collection of incentive tools, mostly short term, designed to stimulate quicker &/or grater purchase of particular products/services by consumers or the trade. Entrepreneurship Theory & Practice 20 (1), 5-28. If your marketing and sales teams see themselves as a united force, at least 75% of your leads should be directly generated by marketing. Firms may offer contests to attract customers by offering substantial cash or merchandise price cuts. Similarly, sales force contests are arranged to stimulate the efforts of the salesmen. This may be done on a door-to-door basis, through demonstrations or by mail. Factors responsible for Rapid Growth of IMC Allocation of funds from media advertising to other forms of promotion, particularly consumer- and trade-oriented sales promotions. A shift from traditional ways of relying on advertising- focused approaches. A shift in marketplace power from manufacturers to 6 retailers. Methods of Sales Promotions | Reasons for Growth of Sales Promotion, 4. The following are some of them. Sales promotion can be effected in several ways. All of the factors listed below have played a part in that growth EXCEPT: Greater pressure to increase sales. The company can also motivate the dealers and distributors of their channel to perform better for their brand, and to get their stock moving. To increase worth of raw goods, you must add value to it by processing and packaging it for the consumer. _____ is the factors contributing for the rapid growth of Sales Promotion. Advertisers, therefore, are exploring marketing communication forms that cost less and produce immediate, tangible results. If growth is obtained in part by offering easier credit terms, the balance could be altered if the accounts receivable average $150,000 and are used to support sales of $1,000,000. Marketers are making greater use of sales promotion in their marketing programmes because consumers respond favourably to the incentives it provides. This is due to the power shift in the marketplace from manufacturers to retailers. which of the following factors has most likely contributed to the rapid growth of sales promotion, particularly in consumer markets? The importance of the service sector and more importantly the role of marketing inputs in services has been seen only in the last 20 years. Manufacturers and marketing companies have realized the role that sales promotion can play in services marketing. In 2017, sales amounted to $14.2 billion, and are expected to rise to $30 billion by the end of 2018. ii. Over the past 20 years, I have observed 10 recurring risks for growing business and have helped clients address them. 2) Gifting. In such conventions and conferences, the sales promotion department exposes the salesmen to the latest sales techniques and latest methods of promotion of goods. Furnishing dealers with sales literature and display materials, 4. SALES PROMOTION •The set of marketing activities undertaken to boost sales of the product or service •Process of persuading a potential customer to buy the product. Related: 25 Major Benefits or Advantages of Branding. One of the most common ways to promote your store during festival time or when there is a huge walk in expected is Gifting. More competition and a decline in differentiation of brands. Rapid growth: A decade ago, ad-to-sales promotion ratio was about 40:60, now is like 25:75 & growing. Factors Affecting Promotion Mix Definition: The Promotion Mix is the blend of several promotional activities (Advertising, personal selling, sales promotion, public relations, direct marketing) used by business to create, maintain and increase the demand for a product. declining advertising efficiency _____ are like coupons except that the price reduction occurs after the purchase rather than at the retail outlet. b. Consumer Promotion is useful for promoting new product. Sales promotion tools have become one of the primary vehicles for doing this, through programmes tried into the local flavour, themes, or events. Immediate Profits; 2. 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. The problem with advertising is that consumers are bombarded with advertising messages every day. Demonstrations are conducted to inform the public or consumers in the target market about the attributes and utilities of the product. The present market situation shows that there is rapid growth of sales promotion though several factors have contributed to it, particularly in consumer markets. iii. 1. You can never get success in the market until you do not understand your audience and still if you do not put the sales promotion strategy, you can’t get success in the market. (2) Advertising efficiency has declined due to rising costs. 15 Importance of Sales Promotion to Producers. The modern day of advertisement agency has its origins during this period. “In addition to the convenience, another factor that is driving our sales in such cities is that many of the brands do not have footprint in these areas. The following promotions work very well in services marketing. It is also a way to increase the sales of the products because customers have an anticipation that they might win a gift from the store. Greater pressure to increase sales. 1 Answer to Describe the factors that have accounted for sales promotion’s rapid growth. Consumer promotion includes samples, coupons, money-refund offers, price-off, premiums, contests, demonstrations and trading stamps. Advertising efficiency has declined because of rising costs, media clutter and legal restraints. (3) More external competition (4) Least difference among the brands (5) All of these View Answer / Hide Answer Marketers also cite ‘economic cost‘ for the shift. To encourage impulse buying and attract first-time buyers, sales promotion is used. Your email address will not be published. Samples are freely distributed with the product purchased for the purpose of obtaining consumer acceptance. From the consumers perspective, sales promotion reduces the risk associated with a purchase by giving them something of added value such as a coupon, rebate, or discounted price. Once the product has been proven a success and customers begin asking for it, sales will increase further as more retailers become interested in carrying it. Redemption rates for coupons or figures on sales volume can be obtained within days. Since then, consumers have come to expect constant short term price reductions such as coupons, sales, and price promotions. b. more competition and a decline in differentiation of brands. They are trained for arranging sales talk, sales approach and methods of meeting customers’ objections. With the overwhelming amount of data present in sales, you must be careful to only provide sales reps with intelligent data. Once the product has been proven a success and customers begin asking for it, sales will increase further as more retailers become interested in carrying it. With such rapid growth expected, retailers in this niche should maximize proven digital marketing strategies for cultivation. It is the outcome of socio­economic factors. 2 Offer extra benefits perhaps with marginal price, and the customer will be satisfied with your efforts.. 3. What is Collective Bargaining and Why it is Important to Workers? Companies face more competition. Trading stamps are a special type of premium received by customers, which can be redeemed for merchandise through stamp redemption. (1) Pressurizing by manager to increase sales. Some studies have sown that readership scores are higher for print ads with coupons than for ads with them. Which of the following factors has most likely contributed to the rapid growth of sales promotion, particularly in consumer markets? While there may be other factors that influence growth, I believe that these have the most affect on enrollment at a private school. With the overwhelming amount of data present in sales, you must be careful to only provide sales reps with intelligent data. Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. increasing your product's market share; creating a brand preference for your customers; Product growth stage. retail sales, which is projected to reach $253.8 billion for 2012. The sales promotion department usually arranges such contests to increase the efforts, and energies of the sales force. Population growth, even rapid population growth, can be a positive thing. Traditional media costs, especially advertising, have escalated to the point where alternative types of media must be considered. When a brand wants to increase the sales of its products, it uses Sales promotion. Sales promotion is the use of incentive techniques that create a perception of greater value among consumers, the trade and business buyers. It includes tools for consumer promotion, trade promotion & business & sales force promotion. declining advertising efficiency ________ are useful articles imprinted with an advertiser's name, logo, or message that are given as gifts to consumers. Excess Stocks. Related: 13 Factors Influencing the Designing of Sales Territory. In some cases, the manufacturer and the dealer may undertake cooperative advertising campaign. On-the-shelf promotion is another reason for its growth. In some economies the development of transportation, … A major aspect of many firms marketing strategies over the past decade has been the development of new products. However, industrial marketing may not use advertising so much as consumer marketing, but sales promotion efforts are present in industrial marketing also. Advertising presents or promotes the product to the target audience through a variety of media such as TV, radio, cinema, online, social media and magazines to encourage them to buy.. (a) Pressurizing by manager to increase sales (b) More external competition (c) Least difference among the brands (d) All of these 9. Deploying the right types of Sales Promotion Strategies will bring attention and light to the brand and create good sales for the company as well. The markets for many products are mature and stagnant, and it is increasingly difficult to boost sales through advertising. Answer to Describe the factors that have accounted for sales promotion’s rapid growth. Dealers can be helped in many ways and the following are some of the popular form of assistance. Advertising is as old as trade and commerce. In case of bulky and costly goods which cannot be displayed physically, display materials, posters, show cards act as promotion materials. The manufacturer offers a number of attractive terms to dealers in order to induce them to buy an article. 13 Factors Influencing the Designing of Sales Territory. The department can also take up the responsibility of managing the procurement of goods.This is the team that is responsible for the growth and development of any profit oriented business.. By inducing more sales through sales promotion, inflow, of cash increases — This could be one of the objectives of the firm. quantify the key factors that are responsible for failure in small and medium-sized enterprises. Another reason for sales promotion’s growth is that it is relatively easy and quick to determine whether a sales promotion strategy has accomplished its objectives because there is usually an immediate response of some kind. Updated on: February 9, 2020 Leave a Comment. Factors Responsible for Rapid Growth of Sales Promotion, How to Choose Right Advertising Media Decision (15 Key Factors), 17 Powerful Consumer Sales Promotion Techniques, 15 Importance of Sales Promotion to Producers. A promotional offer in an ad can break through the clutter that is prevalent in most media today. Coupons offer a discount on new purchases of a product. The sales promotion department assists the salesmen to contact the prospective customers. 7. Journal of Enterprising Culture 4 (4), 351- 361. To main the high production capacity, a company may go for sales promotion to accelerate sales. Several factors have contributed to the rapid growth of sales promotion, particularly in consumer markets. They are therefore resorting to more and innovativemethods of sales promotion. Finally, an increase in the size and power of retailers … Thus, promotional tools are used increasingly. While sales promotion has been part of the marketing process for a long time, its role and importance in a company's integrated marketing communications program have increased dramatically over the past decade. For instance, the rapid growth of E-Commerce initiatives in the MENA (Middle East and North Africa) region reflects its compelling advantages, such as enhanced governmental performance, lower cost structure, greater flexibility, broader scale and scope of services, greater transparency, accountability, and faster transactions. Sales increase as more customers become aware of the product and its benefits and additional market segments are targeted. The ancient Babylonians and the Romans contributed significantly to the early growth of advertising. Related: 17 Powerful Consumer Sales Promotion Techniques. Examples include corrections when the rapid growth may actually supply a population that wouldn't have existed to contribute otherwise. 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