A sales promotion is basically a marketing effort that encourages quick sales through short-term incentives to a company’s target audience or through the distribution through the manufacturer down to a retailer.  It promotes quick sales and helps affect the bottom line profits.

Most people know the consumer sales promotions like sweepstakes, contests, coupons, rebates, sampling, and free gifts. However, few people realize that more money is spent on the trade end of the sales promotion marketing strategy.

Objectives for trade promotions vary. Most are administered to create distribution for new products, maintain support for existing brands, encourage display of products at retail stores, build retail inventory, and reduce trade inventory.

The trade strategies include point of sale displays in retail stores, in-store demonstrations of the product, trade shows and exhibits, buying allowances, trade trial promotions, promotional allowances, incentive programs, co-op advertising, and training programs.

Trade trial promotions include line fees and slotting allowances, which the manufacturer pays the retailer to stock a new product, and returns, where the manufacturer agrees to take back unsold quantities of product.

Buying allowances allow retailers to free goods or a discount off their invoices when they purchase product during a promotional period.

Promotional allowances encourage retailers to perform specific tasks in relation to the brand.

Trade training is an important aspect to help sell manufacturer products. Staffs at the retail level are given in-depth exposure to a product. Often the manufacturer staffs offer the training to retail employees.

Contests and incentive programs encourage the people in the distribution channel to move product by offering special monetary or other gift incentives to sell their products.

Co-op advertising allows retailers an incentive to advertise a manufacturer’s products. The manufacturer will pay some or all of the advertising cost of promoting the retailers’ advertising costs in their flyers, broadcast and print, online media, etc.

The ultimate goal of sales promotion strategies is to promote quick sale of product through the use of both consumer and trade promotions. The cost of implementing these strategies can be high but it in the end, more product is sold which positively affects a company’s bottom line profits.