What could be more difficult than working with consumers? Probably, only excessive physical labor can compare with this. But it’s not about him now. Formation of demand and sales promotion is a long and responsible process that requires careful preliminary preparation. This will be discussed today.
What is the basis for the sale of goods?
The formation of demand and sales promotion is not only a set of automatic processes, but also activities that include the human factor. Before presenting any product, advertisers should thoroughly study it in order to say with confidence that it can satisfy the needs of the buyer, and is also reliable, competitive and safe.
If the product, among other things, is new, popular and affordable, it will be somewhat easier to generate demand and stimulate sales. As you know, regardless of profession, education and ethnicity, only three types of motivation motivate people to make a purchase:
- Rational motivation. A person considers the goods in terms of value for money.
- Moral motivation. The choice of a person is influenced by the traditions that have developed in society. For example, a person working in an office will not buy jeans for work.
- Emotional motivation. For most people, it is important not only the quality of the product, but its brand, which emphasizes social status.
In the formation of demand and sales promotion, first of all, you need to pay attention to these points.
Promotion
After a person has realized that he needs to buy something, he begins to search for information about the product. It is usually presented in the form of means of generating demand and stimulating the sale of goods. They, in turn, are designed specifically to attract the attention of consumers.
The tool in this case is such a thing as promotion. This is a message of product information in any form that will attract attention. Important promotion functions are:
- Creating a prestigious image with a low price and novelty of the product.
- Submission of full information about the properties and qualities of the goods.
- Maintaining product popularity.
- Change the way you use the product.
- Creation of enthusiasm.
- Convincing the consumer of the need to purchase.
Methods of demand formation and sales promotion
In order to arouse a consumer’s consumer need and desire to purchase goods, various types of promotion are used in marketing:
- Advertising. Most often, the media use it to disseminate it or directly contact a potential buyer by mail.
- Publicity. This term refers to non-personal appeal to the audience. The company usually does not pay for such a message, unlike advertising in the media. Publicity is usually called a comment that the editor writes in the press about the product.
- Sales promotion. This includes various types of marketing activities that encourage the buyer to make a purchase. In contrast to advertising and publicity, which are designed to disseminate product information, sales promotion is focused on hot sales.
- Personal sales. This method of generating demand and sales promotion has long been a leader. Initially, as soon as the marketing industry began to take shape, personal communications between the seller and the buyer in order to convince them of the purchase of goods were the basis for successful sales.
If we combine all types of promotion and sales, then we can say that these processes are complex measures for the formation of demand and sales promotion. Each entrepreneur needs to know them in order to increase their own sales.
About the system briefly
If we talk about the system of formation of demand and sales promotion of goods, then all efforts are aimed at finding solvent consumer groups and turning their attention to the goods in order to satisfy their purchasing needs. At this time, specialists are trying to solve the problem of choosing between "their" product and competitors' products. Of course, if the buyer is well informed, then he will certainly opt for the product that he knows best about.
Thus, we can say that the activity on the formation of demand has a communication and commercial effect.
Effects
What is the communication effect? During the survey, the consumer easily perceives the company name, brand, brand and the like. When it is time to buy, he easily distinguishes these points from other products.
The second, commercial effect, can be observed when the client has an intention to purchase a specific product. This effect is manifested only in 13-15% of respondents.
The processes of demand formation and sales promotion in different market segments are different from each other. In addition, the marketer must take into account the behavioral characteristics of consumers, taking into account the life cycle of the product and the amount of projected demand. This does not end the demand-generating and sales promotion activities.
Estimate
It is important to pay attention to the company that is engaged in the promotion of goods. Especially carefully should be monitored the volume and sequence of use of means of promotion. Demand and sales activities need not be expensive. The ratio of advertising costs to related processes may look like this:
- Development and promotion of a trademark - 17% of the total budget.
- Holding exhibitions and presentations - 19%.
- Advertising by mail - 12%.
- Provision of services to a potential buyer - 13%.
- Prizes, discounts, promotions, souvenirs, lotteries - 23%.
- Net promotional items - 12%
- Meetings and other meetings - 4%.
Carrying out these actions, it is worth remembering that in marketing the formation of demand and sales promotion should focus on attracting buyers to their ranks for many years. There may not be any immediate result, but you should not count on it.
Block FOS and STIS
The system of demand generation and sales promotion consists of two blocks. These, respectively, are measures to create demand and stimulate sales.
Their main goal is to inform potential buyers about the existence of the product. In addition, attention is drawn to the needs that a particular product can satisfy. Also, the consumer is presented evidence of the quality of the products. It is the correctly selected evidence that causes customers to trust the product, in turn, increases the level of sales.
The main objective of measures to form demand is to gain a certain share of the market by the goods. This process should be implemented at the initial stage, as soon as products begin to enter the market. Basically, purchase decisions are subject to thorough discussion or reflection, therefore, all measures regarding the formation of demand should have a directed effect on everyone who may be involved in the decision.
Activities that help shape demand are typically:
- Advertising.
- Exhibitions.
- Trade fairs.
- Public relations.
Sales promotion
As for the marketing policy, it should cause the consumer a steady preference for a particular brand and a desire to make a re-purchase. Simply put, the main task of such events is to encourage the consumer to subsequent, repeated purchases of a product of a certain brand, the acquisition of large quantities of goods and the establishment of commercial relations with the manufacturer.
In conditions of high competition and an oversupply of goods by the market, the activities of sales promotion activities are of particular importance. In general, these processes are divided into 2 large groups, depending on the object on which it is necessary to influence.
The first group includes activities aimed directly at the buyer. They create an image of a commercial offer with tangible benefits. For example, there are discounts at distribution points. Or, a person can apply for a loan for a favorite product. You can also meet events such as:
- Free distribution of trial products.
- Reception, exchange or repair of used goods.
- Presentation.
- Company tours.
- Press conferences.
- PR campaigns.
These events are widely known in the media, as they are constantly talked about.
The second group includes those processes that act on intermediaries and force them to sell with much greater energy. Intermediaries are much more active in expanding and strengthening target segments. Such events should include:
- Providing the necessary equipment for the sale.
- Equipment for workshops, utility rooms and points of sale.
- Providing discounts and selling prices (its sellers have the right to raise and keep the difference).
- Cash bonuses.
- Extra weekend or time off.
- Gifts are moral rewards.
PR and advertising
The policy of generating demand and sales promotion is based on a wide variety of means and measures. But more in demand and popularity is advertising and PR. With the help of their manufacturer solves the following problems:
- Provides leadership to the organization with information on what the public thinks about it.
- Develops response measures to influence the opinion of society.
- Directs the activities of company management in such a way that it takes place in the public interest.
- Maintains a state of readiness for change, anticipating the development of possible trends in advance.
- As the main means of activity uses research and open communication.
Simply put, PR helps build mutual understanding between the public and the firm. Such events help to create a positive public opinion about the brand, product and image of the company.
Distribution of goods
An important role in the formation of demand and marketing of goods is played by their correct distribution, that is, activities regarding the planning and physical movement of goods from the company to the buyer. It is carried out by distribution channels, and their members perform a number of important functions:
- Research. Gather information necessary to ensure sharing.
- Sales promotion. Creation and mass distribution of product information.
- Establishing contacts. Establishing communication with potential buyers.
- Customization of goods to customer requests.
- Price negotiation for further transfer of goods.
- Transportation and warehousing of products for sale.
- Search for funds that cover the costs of the functioning of the distribution channel.
The first five functions are aimed at concluding deals, the rest help to complete them.
Each distribution channel consists of several levels. By them it is customary to mean intermediaries who perform a certain type of activity. Each of these activities is aimed at bringing the product closer to its final buyer. Since both the manufacturer and the buyer do some work, they are also part of the distribution channel. Its length directly depends on the number of intermediate levels.
Turnover
Another important term in the process of generating demand and sales is commodity distribution. By this is meant a comprehensive activity that includes all operations related to the transportation of products from the manufacturer to the buyer.
The goods distribution procedure consists of several elements: warehouse processing of products and their sorting, packaging, transportation, delivery and marketing.
When choosing a place of activity and distribution channel, the following factors should be considered:
- The number of consumers in the sales center and the size of the average purchase. Location of stores, working hours, the need for sales staff and loan conditions.
- Do not forget about the interests of the company. Thus, it is necessary to provide the ability to control profit, the work of employees. Arrange delivery and implementation process.
- As for the product, you need to determine the cost of a unit of product. Take into account the complexity of storage, the frequency of shipments, weight, etc.
- Do not forget about competitors. You need to know their quantity, the range of products presented. Understand the methods of commodity circulation that they use, means of promotion and distribution channels.
- Channels of distribution. Their number, functions, availability, legal aspects and location.
conclusions
Thus, the formation of demand and sales promotion can be considered a complex and multifunctional process.
We can say that this is a circular process. Initially, the manufacturer, through surveys and marketing research, determines what needs customers have, creates products that fully meet these needs. After a study is again conducted on consumer preferences, the finished product is customized to expectations. Then information about the new product goes to various media, the manufacturer orders advertising campaigns. Establishes communication channels with distribution companies, delivers the finished product to them. Distributors sell the product to potential buyers, and after a while the company conducts market research again to find out how customers relate to the product.
Along the way, the accompanying needs of customers are determined, the product goes through the modification process. Information is sent to a potential buyer that the product can solve its problems, thus generating demand. And where demand is most clearly expressed, the company makes points of sale of goods, that is, forms sales points. This is the whole procedure for the formation of supply and demand, if we talk about it in a nutshell.