Trading stamps are a special type of premium received by customers, which can be redeemed for merchandise through stamp redemption. declining advertising efficiency _____ are like coupons except that the price reduction occurs after the purchase rather than at the retail outlet. Pleasant climate with warmth and ample of sunshine attracts tourists who come from the temperate and colder regions. First, a strong business environment fosters growth in the domestic market and attracts foreign investors. There is need for a cordial relationship between the manufacturer and the dealers i.e., wholesalers and retailers including the agent middlemen. Several factors have contributed to the rapid growth of sales promotion, particularly in consumer markets. 1. The EU’s “Lisbon Agenda”, initiated in 2000, has now been updated and strengthened. However, industrial marketing may not use advertising so much as consumer marketing, but sales promotion efforts are present in industrial marketing also. 1. 1. Economic growth - Economic growth - The role of government: The differences in rates of growth are often attributed to two factors: government and entrepreneurship. (2) Advertising efficiency has declined due to rising costs. Modern manufacturers offer a variety of management aids to dealers. RAPID GROWTH OF SALES PROMOTION • Sales promotion tools are used by organizations, including a. It is highly essential because it is only through dealers that a manufacturer sells his goods. 4. c. a relaxing of government regulations governing sales promotion. Bonus is usually offered to salesmen who sell in excess of the quota. Advertising is as old as trade and commerce. When a brand wants to increase the sales of its products, it uses Sales promotion. Your email address will not be published. Because of increasing number of brands, it is difficult for manufacturers and dealers to anticipate future sales. India is standing on the threshold of retail revolution. In fact, if I could go back and write my dissertation all over again (by the way, I would never do this! The dealer also informs the manufacturer about consumers’ demand pattern, their likes and dislikes, tastes and preferences, complaints and criticisms, substitute goods, competitive products and so on. No physical retailer can have the kind of assortment of products that we have,” observes Praveen Sinha, co-founder of online retailer Jabong. Creating a dynamic and fruitful sales department is not a difficult task. Sales increase as more customers become aware of the product and its benefits and additional market segments are targeted. Over the past 20 years, I have observed 10 recurring risks for growing business and have helped clients address them. In other words, the products are similar so promotions become the tiebreaker in the consumers’ decision making. Retail Industry, one of the fastest changing and vibrant industries that, has contributed to the economic growth […] To increase worth of raw goods, you must add value to it by processing and packaging it for the consumer. China’s Economic Rise: History, Trends, Challenges, Implications for the United States Congressional Research Service Summary Prior to the initiation of economic reforms and trade liberalization nearly 40 years ago, China The tools of sales force promotion are bonus, sales force contests, and sales meetings and conferences. Advertising b. An obvious reason for consumers increased sensitivity to sales promotion offers is that they save money. a. Growth of mobile commerce These conditions may have both positive and negative influences on the emergence of entrepreneurship. By inducing more sales through sales promotion, inflow, of cash increases — This could be one of the objectives of the firm. 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 Personal selling is highly essential in marketing. At the sales maximisation output, there are normal profits only and no supernormal profits/loss. On-the-shelf promotion is another reason for its growth. Many companies are demanding to know what they are getting for their promotional expenditures. The growth stage is a period of rapid revenue growth. 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. Demonstrations are conducted to inform the public or consumers in the target market about the attributes and utilities of the product. Why are companies spending more money on sales promotion? 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 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. In such conventions and conferences, the sales promotion department exposes the salesmen to the latest sales techniques and latest methods of promotion of goods. “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 sales promotion department is responsible for maintaining such a cordial relationship with dealers so that the goods move quickly along the channel of distribution. The railroad monopolies of the 19th century required trust busting. Factor 4: Leverage Intelligent Sales & Marketing Data for Revenue Growth. Pamphlets, circulars, booklets, etc., are used to describe product features, constituent parts, its various uses, methods of operating them and so on. Generally, sales promotion plays a pivotal role in consumer marketing but the same is not always true for industrial marketing. Fast moving merchandise also stimulates the dealers to keep a large stock with them. Third, the emergence of computer technology has enabled manufacturers to get rapid feedback on the results of promotions. […] A major aspect of many firms marketing strategies over the past decade has been the development of new products. The following promotions work very well in services marketing. Several factors have contributed to the rapid growth of sales promotion. Your email address will not be published. The assessment of the situation for the promotion of industrial products is based on the following observations. Joint promotion which link the buying of one service to another. Related: 13 Factors Influencing the Designing of Sales Territory. ), this would be a great research topic. Which of the following factors has most likely contributed to the rapid growth of sales promotion, particularly in consumer markets? China's rapid economic growth has been mirrored by the big increase in its energy consumption. Factors Responsible for Rapid Growth of Sales Promotion. To encourage impulse buying and attract first-time buyers, sales promotion is used. A company can use variety of promotion techniques including advertising, personal selling, sales promotion, direct marketing and public relations to achieve the company’s communication objectives. Read more. In some cases, the manufacturer and the dealer may undertake cooperative advertising campaign. Retail prices soared during the inflationary 1970s because of the increased costs of labour, raw materials, and manufacturing. Similarly, sales force contests are arranged to stimulate the efforts of the salesmen. In case of new products, the producer may offer some buying allowance to the dealers. Marketers are making greater use of sales promotion in their marketing programmes because consumers respond favourably to the incentives it provides. Such factors are the cultural, political and economic conditions of the country or region in which the company operates. Consumer Behaviour; 6. Top 12 Strategies & Policies of Pricing in Marketing. 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. The main idea of such assistance is to help the retailers to sell more goods and buy more from manufacturer. Wijewardena, H. & S. Cooray (1996). To make personal selling highly effective, sales force promotion is essential. Also Read: 9 types of Consumer Sales Promotion tools. To make personal selling highly effective, sales force promotion is essential. Sometimes, customers are given the product at a price below the normal rate. Sometimes, the manufacturer promise the dealer to take back goods if they remain unsold. Even though customer satisfaction has become the top priority for businesses, there are times when they need to stimulate demand and increase sales of their products for short-run. In such cases, the manufacturer may reimburse the advertising expenditure borne by the dealer. 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. 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. ii. This helps the salesmen a lot while selling. Sales promotion is able to deliver these results. While there may be other factors that influence growth, I believe that these have the most affect on enrollment at a private school. Sales increase as more customers become aware of the product and its benefits and additional market segments are targeted. quantify the key factors that are responsible for failure in small and medium-sized enterprises. 25 Major Benefits or Advantages of Branding. With sustained growth and rapid growth though there is a risk of overpopulation. 1. These kinds pf incentives inspire the dealers to stock and sell goods more vigorously and enthusiastically. b. more competition and a decline in differentiation of brands. 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. The largest single critical factor determining the company’s sales growth is the product itself. 1 Answer to Describe the factors that have accounted for sales promotion’s rapid growth. The sales promotion tools include coupons, contests, fairs and trade shows, exhibitions, demonstrations, premium, gifts, rebates, low interest financing and trade allowance. Introduce a New Brand. The internal problems included poor weather and poor agricultural pricing policies which favoured the estate sector against the smallholder farmers. The following are some of them. 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. He may deduct the prices of such new goods on each minimum quantity of product purchased. 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.. All of the factors listed below have played a part in that growth EXCEPT: a. greater pressure to increase sales. Coupons offer a discount on new purchases of a product. We begin with the Social factors, ... if you wish to maximize the sales price of raw agric products harvested from the farm. It is the outcome of socio­economic factors. Read more. Updated on: February 9, 2020 Leave a Comment. Firms may offer contests to attract customers by offering substantial cash or merchandise price cuts. Problem 2DQ from Chapter 18: Describe the factors that have accounted for sales promotion Related: Top 12 Strategies & Policies of Pricing in Marketing. But competition policy is more difficult when future competitors are less likely to emerge from large existing firms than from small companies with innovative approaches that have the capacity for rapid growth. (a) Pressurizing by manager to increase sales (b) More external competition (c) Least difference among the brands (d) All of these 9. Which of the following factors has most likely contributed to the rapid growth of sales promotion, particularly in consumer markets? Factors Contributing to The Rapid Growth of Sales Promotion - product managers face greater pressures to increase current sales - company faces more competition and competing brands are less differentiated - advertising efficiency has declined because of rising costs, media clutter, and legal restraints - consumers have become more deal oriented Sales Promotion Objectives Consumer promotions - urge ST customer buying - enhance customer brand involvement Trade promotions … They are therefore resorting to more and innovativemethods of sales promotion. Brand Proliferation; 13. The modern day of advertisement agency has its origins during this period. 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. Excess Stocks. With the overwhelming amount of data present in sales, you must be careful to only provide sales reps with intelligent data. Since then, consumers have come to expect constant short term price reductions such as coupons, sales, and price promotions. The growth of huge supermarkets necessitated the need for aggressive selling. 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. growth. 15 Reasons for the Occurrence of Industrial Conflicts, How to Make a Successful Participative Management, 10 Basic Limitations of Workers Participation in Management. Sales promotion tools have become one of the primary vehicles for doing this, through programmes tried into the local flavour, themes, or events. The company can also motivate the dealers and distributors of their channel to perform better for their brand, and to get their stock moving. Identify the extra benefits your competitors are offering and assess whether you can offer all or some of these benefits. growth and retarded Malawi’s social progress. 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. In companies struggling to meet their sales and financial goals, top management is demanding measurable, accountable ways to relate promotional expenditures to sales and profitability. 15 Importance of Sales Promotion to Producers. Finally, an increase in the size and power of retailers … 7. High cost of media advertising such as newspapers and TV, is one of the main reasons to find more cost-effective forms of sales promotion. It includes tools for consumer promotion, trade promotion & business & sales force promotion. The dealers are supplied with sales literature by the manufacturers. Sometimes, the manufacturer may allow credit to dealers for a longer period of time, he can also allow high discount to dealers so that they are automatically attracted towards the attractive terms. The sales promotion department arranges to train dealers about the various aspects of sales. In case of bulky and costly goods which cannot be displayed physically, display materials, posters, show cards act as promotion materials. Premiums are merchandise offered at relatively low prices. This growth is likely to be stimulated by a number of factors including: Your profits should rise through an increase in output and more competitive pricing. Several factors have contributed to the rapid growth of sales promotion. Two additional factors have contributed to the increase in international trade and industrialization in South Korea: An improvement in the business environment; Policies incentivizing investment in innovation; Environment and Innovation. The sales promotion department usually arranges such contests to increase the efforts, and energies of the sales force. A) ... She wants to evaluate the performance of her sales force that is responsible for the New England territory. 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 |. iii. Pricing; 7. They are certificates entitling the bearer to a discount on the purchase of a specific product. The ancient Babylonians and the Romans contributed significantly to the early growth of advertising. Do you expect a continued increase in the use of promotion throughout the following decade? Promotions typically offer the consumer added value. Some studies have sown that readership scores are higher for print ads with coupons than for ads with them. 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. In areas where these factors are present, you can expect to see strong and consistent entrepreneurial growth. Consumer Promotion is useful for promoting new product. 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. The tools of sales force promotion are bonus, sales force contests, and sales meetings and conferences. Greater pressure to increase sales. Rapid growth: A decade ago, ad-to-sales promotion ratio was about 40:60, now is like 25:75 & growing. 2. Several factors have contributed to the rapid growth of sales promotion. Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. c. Media advertising tends to be impersonal whereas sales promotion is more personal, linking the manufacturer with the customer. All of the factors listed below have played a part in that growth EXCEPT: A. Consider all extra benefits and make priority of these benefits with a view to offering these to customers depending upon a particular sales situation. 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. retail sales, which is projected to reach $253.8 billion for 2012. One of the most common ways to promote your store during festival time or when there is a huge walk in expected is Gifting. which of the following factors has most likely contributed to the rapid growth of sales promotion, particularly in consumer markets? 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 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. Shoppers today are better educated, more selective, and less loyal to brand names than in the past, which means they are more susceptible to switching brands. Q21._____ is the factors contributing for the rapid growth of Sales Promotion. Population growth, even rapid population growth, can be a positive thing. 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. Another factor that led to the increase in sales promotion is manufacturers’ reliance on trade and consumer promotions to gain or maintain competitive advantage. Answer to Describe the factors that have accounted for sales promotion’s rapid growth. Sales demanding is more economically accountable than advertising. Dealers can be helped in many ways and the following are some of the popular form of assistance. Methods of Sales Promotions | Reasons for Growth of Sales Promotion, 4. The manufacturer sometimes conveys all information about a product to the dealers, such as information relating to production processes, etc. 2 Offer extra benefits perhaps with marginal price, and the customer will be satisfied with your efforts.. 3. Why do businesses choose a sales maximisation objective? Marketers also cite ‘economic cost‘ for the shift. ADVERTISEMENTS: The major factors responsible for the growth of organised retailing in India are as follows: Organised retailing is a recent development. Thus, now you know the major factors responsible for rapid growth of sales promotion. (3) More external competition (4) Least difference among the brands (5) All of these View Answer / Hide Answer The increased costs led to low priced private label brands and the emergence of generic products, particularly in the highly volatile super, market industry. the battle is for market share rather than general product growth. Sometimes, it prepares the ground for the salesmen to meet the prospects by sending them circular letters and sales literature. The dealers are also given detailed information about the process of manufacture so that they can answer customer queries more efficiently. If your marketing and sales teams see themselves as a united force, at least 75% of your leads should be directly generated by marketing. Sales promotions are often the most effective strategy for increasing sales of a product, particularly when the products in the category are largely undifferentiated. Product managers are under pressure to generate quarterly sales increases. In 2017, sales amounted to $14.2 billion, and are expected to rise to $30 billion by the end of 2018. This may be done on a door-to-door basis, through demonstrations or by mail. Promotion based on price creativity, where additional benefits are informed through price adjustments as used in restaurants, clinics and hospitals. The markets for many products are mature and stagnant, and it is increasingly difficult to boost sales through advertising. Sales promotion can be effected in several ways. From the last two decades, promotions strategies used by organizations around the world have undergone through tremendous changes. A promotional offer in an ad can break through the clutter that is prevalent in most media today. i. Bonus: How to Choose Right Advertising Media Decision (15 Key Factors). 3. ADVERTISEMENTS: Advertising and Sales Promotion! In the early stages of sustained growth, government has often provided the incentives for entrepreneurship to take hold. Several factors have contributed to the rapid growth of sales promotion. (1) Pressurizing by manager to increase sales. 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). If your product is satisfying the needs of the consumers at reasonable prices, it will sell. End of 2018 the big increase in output and more competitive Pricing through an increase output. 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