CHAPTER ONE
INTRODUCTION
1.0
Introduction
Sales promotion
activities are a form of direct advertising designed to stimulate sales mainly
by the use of incentives. To embark on any sales promotion, a sales promotion
programme must first be developed. This is then pre-tested and then
implemented. When the promotion ends the results are evaluated or assessed.
Sales promotion
programmes are developed taking into consideration the size of the incentive to
be used, condition for participation, how to promote and distribute the
programme itself, the length or duration of promotion and sales promotion
budget. Sales promotions are pre-tested on a limited basis in selected
geographical areas. This is done to find out if the sales promotion tools are
appropriate and of the right incentive size. Implementation of promotion is
done by formulating plans to cover lead-time (time needed to prepare programme
before launching it) and self off time (time from the launch to the end of a
promotion).
Evaluation of
sales promotion could be done by checking on dealers stock-levels or
interviewing a sample of consumers in the target market. However, the most
popular method of evaluation is to compare sales and or market share before,
during and after a promotion. Sales promotion supports other sales efforts and
thus plays an important role in the total promotion mix; hence it must be used
well.
Business
organizations promote their products and services by using advertising, sales
promotion, public relations and personal selling. Advertising, sales promotion
and public relation are described as mass promotion tools. However, Cole (1993)
reports that the most widely used are advertising and personal selling.
Kotler and Armstrong (1994) define sales
promotion to consist of short –term incentives to encourage purchase or sales
of a product or service. Whereas advertising offers reasons to buy a product or
service, sales promotion offers reasons to buy now.
Anything that
can be offered to a market to satisfy a need or a want is known as a product.
It usually suggests a tangible or physical object such as a car, a fan, video
cassette recorder or a television. A service on the other hand is used to refer
to intangible products such as providing a means of transport or communication.
Sales promotion includes a wide variety of tools: consumer promotion tools,
samples, coupons, rebates, price pack, premiums, contests, patronage awards,
advertising specialties and point-of purchase promotions, trade promotion tools
– buying allowance, free goods, merchandise allowance, push money, dealer sales
contest, sales force promotion tool –bonuses, contest, sales rallies. Sellers may use consumer promotions to
increase short-term market. The
objective may be to entice consumer to try new products, lure consumers form a
product or reward loyal customers. In
Ghana, market women, petty traders, hawkers and other sellers practice sales
promotion by inflecting the price of their commodities or wares.
This is then
reduced upon bargaining with the buyer. The price reduction becomes an
incentive to the buyer who then makes a purchase. Others also add a little of
the item
being sold
(known in local parlance as „ also serves as an incentive to customers. During
the barter system, sales promotion was practiced but in a different manner. To
entice or win a buyer, a seller of say gold dust would offer his or her product
for another of a lesser value. But at a later date, items would be collected
from the buyer till such time that the gold dust would have been fully paid
for.
Most
organizations in Ghana have in the past concentrated on advertising and
personal selling to promote their products. However, the use of sales promotion
tools has experienced rapid growth in recent times. This is indicated by an
increase in the number of sweepstakes and sales contests being organized by
business organizations.
This study is thus to identify the forms
of sales promotions used in Ghanaian environment by business organization,
assess their impact on organizations and society at large, identify loopholes
and give recommendations. It is hoped that this work will serve as reference
material for other researchers and marketing students.
1.2
Statement of the Problem
Firms or
companies the world over aim at maximizing profits or to stay in active
business. They also aim at satisfying their customers. For this reason,
organisations put in measures or programmes that would help them achieve the
above mentioned objectives.
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