5W + 1H in management article

Sales promotion, a powerful marketing tool

Subhash Mohanti, TNN Jun 15, 2014, 12.25am IST

When marketing wizards discovered sales promotion techniques to push up consumption in difficult times, little did they imagine that they would have unleashed a phenomenon for years to come.

Sales promotion is no longer a powerful marketing tool only, it's an industry in itself. In the global context, it's worth some billions of dollars. In India it's a Rs 5,000-crore plus industry, and growing.

In fact, economic theories have always bowed to the boom-bust theory. A business cycle will always contain a period which will offer serious challenges to any business. Either it will be due to technological changes or change in the behaviour pattern of consumers. Or it will be simply due to general demand slumps, a phenomenon which has possibly overstayed in today's context. It is these times that need to be tackled differently and consumers have to be lured. Sales promotion techniques have not only attempted to bring about fresh demand, they have also helped create new demand.

Marketing experts believe that sales promotion industry is here to stay. And it's expected to become more aggressive and certainly more innovative.

Explains Rajiv Karwal, CEO, Electrolux Kelvinator Ltd: "Sales promotion is an integral part of the overall marketing programmes for any brand today because competition has increased tremendously and the market size is still small, and that too spread across a huge geographical area. The Indian consumer is very value conscious and his purchasing power is limited. The penetration rates are still too low and hence most brands look at India as as a potential volume oriented market which can open up only when a consumer sees tremendous value proposition. Sales promotion increases the value proposition, and is increasingly being used. FMCG companies are using mostly volume driving promotions and they are quite effective."

Says Hindustan Lever, senior manager, purchase S P Rao: "Its has completely changed the consumer mindset. He asks, 'what else?' every time he buys something." And that's why the growth of sales promotion as a distinctive industry is not in doubt.

In fact, necessity is the mother of invention. And in recessionary markets, sales promotion indeed is the single most important invention of the modern times. If these started as distributing freebies along with mainline products, over a period of time, it has now gathered enough momentum to become an indispensable tool in the hands of companies focused on creating market space for even not so convincing products.

Also, while advertising takes a longer time to pay off, promotions promise instant gratification -- to buyers and sellers alike. Timex sales, for instance, almost double during the promotion period. Says Kapil Kapoor, MD, Timex Watches Ltd: "SP's are a way of life not only in India but all over the world. Consumers seek good value. Impetuous purchase is increasing and a lot of low risk/half-decided consumer cross over at a time they see good value."

Says Bhupinder Singh Sodhi, general manager, sales, Godrej Consumers Products: "The key is that sales promotion has helped avoid brand as well as value dilution in times when consumers were shying away." Hence, companies, instead of cutting prices, have resorted to 'something else' to woo back consumers. Of course, these effectively lower price rationalisation in the hands of the seller, but they do not bring down the value of sales. To the buyers, these are a form of value addition. Our thumb rule is that in four weeks of consumer promos, we sell through eight weeks of sales."

Possibly, the strongest focus of sales promotion initiatives in the present times is at the point of retail. Thus, a direct thrust on retail customers, who naturally feel pampered. Says a senior executive of a large packet tea company: "The last few years have probably been the worst of times for not only India but global economies as well. Market uncertainties coupled with shrinkage in jobs have only made a consumer more cagey and therefore savings oriented." Evidently, avoidable consumption has suffered or has been reduced to the bare minimum. Some of the worst sufferers in the retail segment therefore have been garment manufacturers or makers of conspicuous items. Hence promotional activities too have been stepped up sharply in these segments.

The success of sales promotion as a marketing tool is not only evident at the point of retail. It has proved an effective incentive mechanism for wholesalers and retailers as well. "It's not a commission on sales. It might be even a motor car or an exotic holiday plan," Sodhi says. The effectiveness of sales promotion is indeed reflecting in the topline growth of many a consumer product companies. Sodhi's words are tough to substantiate in terms of hard figures, because not many would like to talk figures. However, it appears that if 10 per cent of the mark-up price has gone into sales promotion, the topline has grown by 5-7 per cent.

Sumber :

http://articles.economictimes.indiatimes.com/2003-06-15/news/27565015_1_promotion-marketing-consumer-mindset

5W + 1 H

1.      What the content of the news above ?

The content of the news above describe about sales promotion is one of the most powerful marketing tool and no longer a powerful marketing tool only, it’s an industry in itself.

2.      Where the object of sales promotion on that news above ?

The news are discuss about sales promotion in India.

3.      When sales promotion should be used ?

A business cycle will always contain a period which will offer serious challenges to any business. Either it will be due to technological changes or change in the behaviour pattern of consumers. Or it will be simply due to general demand slumps, a phenomenon which has possibly overstayed in today's context. It is these times that need to be tackled differently and consumers have to be lured with a good sales promotion techniques.

4.      Why sales promotion is a powerful marketing tool ?

Sales promotion is a powerful marketing tool because it have not only attempted to bring about fresh demand, they have also helped create new demand. Marketing experts believe that sales promotion industry is here to stay. And it's expected to become more aggressive and certainly more innovative.

5.      Who example of management expert agreed for the sales promotion is powerful marketing tool in India ?

·         Rajiv Karwal, CEO, Electrolux Kelvinator Ltd: "Sales promotion is an integral part of the overall marketing programmes for any brand”

·         Bhupinder Singh Sodhi, general manager, sales, Godrej Consumers Products: "The key is that sales promotion has helped avoid brand as well as value dilution in times when consumers were shying away."

·         Hindustan Lever, senior manager, purchase S P Rao: "Its has completely changed the consumer mindset. He asks, 'what else?' every time he buys something." And that's why the growth of sales promotion as a distinctive industry is not in doubt.

6.      How sales promotion become to powerful marketing tool ?

·         In recessionary markets, sales promotion indeed is the single most important invention of the modern times. If these started as distributing freebies along with mainline products, over a period of time, it has now gathered enough momentum to become an indispensable tool in the hands of companies focused on creating market space for even not so convincing products.

·         Also, while advertising takes a longer time to pay off, promotions promise instant gratification -- to buyers and sellers alike.

·         The success of sales promotion as a marketing tool is not only evident at the point of retail. It has proved an effective incentive mechanism for wholesalers and retailers as well. The effectiveness of sales promotion is indeed reflecting in the topline growth of many a consumer product companies.