Page 225 - DMGT509_RURAL MARKETING

Rural Marketing

Notes Ideally the sales graph for sales promotion should be as follows:
Figure 11.3

Sales AA

Time

 Sales Increase during Promotion
 Sales when Competition Starts Action

 Sales Decrease with Increased Competitive Action
 Residual Sales after the Promotion is Over
 Sales Before the Promotion.
As can be seen the firm has gained quite a substantial amount of market share. (Additional sales
AA) but do not forget this is the ideal situation. Competition is always there to counter the
firm’s moves and hence the need for continuity in promotion plans!
As can be seen Sales Promotion is a short time plan to increase sales. It can be used for the
following reasons:
1. Loss of sales due to production problems
2. New product or variant launches

3. To beat the competitors plans
4. Increase in production capacity
Generally a combination approach is required, that of consumer promotion and dealers
promotion plan. However, if there is only consumer promotion it increases the sales and profit
of the dealer too and hence the channel members welcome it.
One major reason of failure of promotion plan is the dishonesty of dealers, who do not give the
extra benefit to the consumer and pocket it themselves. Many of us have purchased a cake of
soap, which was to be given as free gift with a bottle of shampoo, as written on the soap package.
While most dealers and retailers play the game honestly as they know that ultimate advantage
is going to be theirs because of increased sales and profits, firms should be careful in selecting
dealers and retailers in the initial stage itself.
A major area of channel/distribution network promotion is training of its personnel. Automobile
firms like Maruti, Daewoo send their dealer technicians to their respective headquarters, Japan
or Korea for training because they are aware that the only competitive advantage, which can
really sustain and can be hardly copied, is the excellence of service provided to their customers.
In the area of white goods, some firms encourage dealers to keep a few trained servicemen to
attend to minor complaints. The failure rate or MTBF (Mean Time Between Failures) really
defines the quality of a product and differentiates it from other products in its range.

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