Introduction

Promotion is a form of communication with an additional element of persuasion to accept ideas, products, services and hence, persuasive communication becomes the heart of promotion, the third element of marketing mix.

The promotion-mix includes 4 ingredients i.e. Advertising, Personal selling, Publicity and Sales promotion.

Meaning of Sale Promotion:

Sales promotion is an important instruments in marketing to lubricate the marketing efforts. Today, sales promotion is a necessity and not a luxury.

A Massociation, Sales promotion defines as “In a specific sense, sale promotion includes those sales activities that supplement both personal selling and advertising and co-ordinate them and help to make them effective, such as displays, shows and expositions, demonstrations and other non-current selling efforts not in the ordinary routine.”

Promotion Objectives:

1. Increases purchaser rates by consumer and gain 85 percent distribution for the brand.
2. Decrease inter-purchase duration from 8 weeks to 6 weeks.
3. Maintain distribution at 85 percent.

Objectives of Sales Promotion:

1. Increase sales volume.
2. Speed up sales of slow-moving products.
3. To check the fluctuations in sales.
4. Attract consumers towards new product and increase trial.
5. Encourage repeat purchase.
6. Clearance of excessive inventories.
7. Motivates dealers.
8. Encourage dealers to participate in display and sales contest.
9. To gain advantages shelf- space.
10. To increase store traffic.
11. Improve relationship with dealers.
12. To block competitor’s moves.
13. Motivate sales force.
14. To supplement advertising and personal selling efforts.
15. Deflect customer’s attention from price.

Types of Sales Promotion

1. Consumer sales promotion: It involves application of the following tools:-

1. Samples
2. Coupons
3. Rebates
4. Price packs
5. Premiums
6. Prizes (Contests, Sweepstakes, Games)
7. Patronage Award (Trading Stamps)
8. Free Trials
9. Product warranties
10. Tie-in-Promotions
11. Point-of-Purchase (POP) and Demonstration.

2. Dealer promotion: Sales promotion activities are conducted to stimulate consumer-purchasing and dealer effectiveness.

1. There is a provision of free display material either at the Point of Purchase (POP) or Point-of-sales (POS), depending on one’s viewpoint.
2. Retail demonstrators are supplied by manufactures for preparing and distributing the products as a retail sample. E.g. Nescafe instant coffee to consumers for trying the sample on the spot or demonstration regarding the method of using the product.
3. Trade deals are offered to encourage retailers to give additional selling support to the product. E.g. Toothpaste sold i.e. 30 percent to 40 percent again.
4. Seller gives buying allowance of a certain amount of money for a product brought.
5. Buy-back allowance is given to encourage repurchase of a product immediately after another trade deal.
6. Seller gives free goods e.g. one free with 11, or 2 free with 10 are common free deals.
7. Advertising and display allowance may be given.
8. Sales contests for salesman are held.
9. Dealer loader (a gift for an order) is a premium given to the retailer for buying certain quantities of goods or premium for special display done by a retailer.
10. Dealer and distributor training for salesman which may be provided to give them a better knowledge of a product and how to use it.

3. Business Promotion: Sales promotion plays a major role in consumer goods promotion and it is used in a limited way in the case of industrial goods. Industrial goods marketing may involve provision for financing, training of users, buy-back arrangements and even reciprocal trading.

a. Joint promotion: Joint promotions as a marketing devices has finally come into its own. The reasons for this are manifold. If two brands that already have an established equity, endorse each other, the likelihood of success even beyond regular advertising stands a good chance. The Godrej-Titan promotional tie-up that was carried out in Nov. 1993, in a case in point.

E.g. The Surf Ultra-Videocon washing machine tie up.

b. Exhibitions and Trade fairs: An exhibitions stand or stall is a form of showroom, but it is a very distinctive form of showroom. It provides a temporary market place at which buyers and sellers meet. We may have indoor or outdoor public exhibitions and fair and shows e.g. agricultural and industrial machinery and equipment, cottage industries and handicrafts, …………domestic electric.

c. Indian Fashion Scene: The fashion industry has Rs. 20,000 crore internal market and Rs. 3,000 crore export market. About 50,000 jobs are generated each year in the fashion field. It is said that if the world is ‘sound’ the fashion is ‘melody’. Fashion usually means the ‘current style’.

d. Exclusive showrooms: Generally, the showrooms idea is used as a toll of distribution. Currently, in the face of growing competition and unfair undercutting by dealers, a number of consumer durable companies are opening plus, exclusive showrooms, arcades, gallery, as powerful means of sales-promotion to boost their sales. Exclusively plays the role of Unique Selling Proposition (USP) to increase the sales.

e. Sponsorship: Sponsorship consists of giving money or other support to a beneficiary in order to make the activities financially viable or to gain some advertising public relations or marketing advantages. The support could consists of money, ………or other items in kind.

E.g. Nokia, Coca-Cola, Pepsi, Hero Honda, Micromax are closely associated with ……..

TPA (Third Party Administrator)

It is an organisation that processes insurance claims for a separate entity. This can be viewed as ‘outsourcing’ the administration of the claims processing, since TPA is performing a task traditionally handled by the company providing the insurance. TPAs are licensed intermediaries between insurance companies and the hospitals. The TPAs direct the patient to the hospitals in their network and these hospitals provide cashless insurance to the policy holders. The hospitals recover the amount from insurance companies through TPA. Therefore, the TPAs form a bridge between the patient, hospital and insurance agencies.

Conditions for TPAs: 

The following terms and conditions are mandatory for becoming a TPA:

1. A company registered under the Companies act 1956 can function as TPA.
2. Minimum paid up capital of the company shall be in euity share amounting to Rs. 1 crore.
3. At least one of the director of the company should be a qualified doctor registered with Medical Council of India (MCI).
4. TPA is to be licensed by the IRDA (Insurance Regulatory and Development Authority) Act, 1999 the cost of application is Rs. 20,000.
5. On approval, a further sum of Rs. 30,000 is to be deposited with IRDA as license fees.