Reasons for the growth of Sales Promotion

To attract buyers

To encourage impulse buying and attract first-time buyers, sales promotion is used.

Growth of Super markets

The growth of huge supermarkets necessitated the need for aggressive selling. On-the-shelf promotion is another reason for its growth.

Fun and Excitement

The introduction of a certain amount of fun and excitement into promotions which customers can enjoy as participants.

Creation of Goodwill

Media advertising tends to be impersonal whereas sales promotion is more personal, linking the manufacturer with the customer.

Advertising Has Become More Expensive and Less Effective

All the advertising media have become quite expensive. Audio-visual medium, which is considered as the most effective for short-duration ads, may cost in excess of Rs. 1 lakh for a 10 second exposure during prime time. In many cases, consumers have reached a point of boredom due to excessive advertising on TV. Some consumers even consider advertising as an intrusion into their privacy, leading to zapping (surfing channels). Firms with small budgets cannot compete with big companies, which spend huge sums of money on advertising. For these small budget firms, sales promotion is a more cost-effective promotion method to produce sales results.

Production capacity

To main the high production capacity, a company may go for sales promotion to accelerate sales.

Cost-Effective

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.

Accelerates Cashflow

By inducing more sales through sales promotion, inflow, of cash increases; This could be one of the objectives of the firm.

Products have become more standardized

In many product categories, there is a proliferation of brands; many of them are line extensions and me-too brands. Most brands are being perceived by consumers to be more or less similar within a given price range because of the inability of manufacturers to develop truly differentiated products. Under these circumstances, advertising messages are unable to strongly influence the consumers’ perceptions and create brand franchise. As a result of these perceptions of similarity among brands, marketers have no way but to compete on the basis of extra benefit offered through sales promotion. Competing companies struggle to capture market share by using every tool likely to bring sales success.

There are many unbranded jeans sold at shopping malls and places like linking road, bandra which are bought at half the price of actual branded jeans. People who are money conscious buy such jeans. Therefore, Spykar Jeans comes up with such discounts, which helps them in increasing their sales and also in stock clearance,

In Trade oriented deals:

• Sales promotion can obtain feature pricing, displays, and other dealer in-store support
• Sales promotions can help to increase or reduce trade inventories
• Sales promotion can help to expand distribution.