What could be more difficult than working with consumers? Probably, only back-breaking physical labor can be compared 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 is what we will talk about today.
What is the basis for selling the product?
Demand generation and sales promotion is not only a set of automatic processes, but also activities that include a human factor. Before presenting a product, advertisers must study it thoroughly to be sure that it can meet the needs of the buyer, and is also reliable, competitive and safe.
If the product is also new, popular and affordable, then it will be somewhat easier to generate demand and stimulate sales. As you know, regardless of profession, education and ethnicity, when making a purchase, people are driven by only three typesmotivation:
- Rational motivation. A person considers a product 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 who works in an office would not buy jeans for work.
- Emotional motivation. For most people, not only the quality of the product is important, but also its brand, which will emphasize social status.
When generating demand and promoting sales, these points should be taken into account first of all.
Promotion
After a person realizes that he needs to buy something, he starts looking for information about the product. It, as a rule, is 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 information about the product in any form that will attract attention. Important promotion features are:
- Creating a prestigious image with a low price and novelty of the product.
- Submission of complete information about the properties and qualities of the goods.
- Maintaining the popularity of the product.
- Changing the way the product is used.
- Creating enthusiasm.
- Convincing the consumer to buy.
Demand generation and sales promotion methods
To call the buyerconsumer need and desire to purchase a product, various types of promotion are used in marketing:
- Advertising. Most often, it is disseminated through the media or directly addressed to a potential buyer by mail.
- Publicity. This term refers to a non-personal appeal to the audience. The company usually does not pay for such a message, unlike media advertising. Publicity is usually referred to as a comment that an editor writes in the press about a product.
- Sales promotion. This includes various types of marketing activities that encourage the buyer to make a purchase. Unlike advertising and publicity, which are intended to spread information about a product, sales promotion is focused on hot sales.
- Personal selling. This method of generating demand and stimulating sales has been a leader for a long time. Initially, as soon as the marketing industry began to take shape, personal communication between seller and buyer in order to convince the purchase of a product was the basis of successful sales.
If we combine all types of promotion and sales, we can say that these processes are complex measures to create demand and stimulate sales. Every entrepreneur needs to know them in order to increase their own sales.
About the system in brief
If we talk about the system for generating demand and stimulating the sale of goods, then everythingefforts are aimed at finding solvent groups of consumers and drawing their attention to the product 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, it can be said that demand generation activities have a communication and commercial effect.
Effects
What is the communication effect? During the survey, the consumer easily perceives the name of the company, brand, brand, and the like. When it comes time to buy, he easily distinguishes these moments from other goods.
The second, commercial effect can be observed when a customer has an intention to purchase a particular product. This effect appears only in 13-15% of respondents.
The processes of generating demand and stimulating the sale of a product in different market segments differ from each other. In addition, the marketer needs to take into account the behavioral characteristics of consumers, taking into account the life cycle of the product and the amount of predicted demand. This is not the end of demand generation and sales promotion activities.
Estimate
It is important to pay attention to the company that promotes the goods. Particular attention should be paid to the volume and sequence of use of promotional tools. Demand and sales activities need not be expensive. The ratio of spending on advertising and related processes might look like this:
- Development and promotion of a trademark - 17% of the total budget.
- Holding exhibitions and presentations - 19%.
- Mail-order advertising - 12%.
- Provision of services to a potential buyer - 13%.
- Prizes, discounts, incentives, souvenirs, lotteries - 23%.
- Net promotional items – 12%
- Meetings and other meetings - 4%.
In doing this, it's worth remembering that in marketing, demand generation and sales promotion must aim to attract buyers for years to come. There may not be a momentary result, but you should not count on it.
Block FOS and STIS
The demand formation and sales promotion system consists of two blocks. These are, respectively, measures to create demand and stimulate sales.
Their main purpose is to inform potential buyers about the existence of the goods. In addition, attention is drawn to the needs that a particular product can satisfy. Also, the consumer is provided with evidence of the quality of the products. It is the right evidence that instills consumer confidence in the product, which in turn increases the level of sales.
The main task of demand formation measures is to win a certain share of the productmarket. This process should be implemented at the initial stage, as soon as the products start to enter the market. In general, purchasing decisions are subject to careful discussion or reflection, so all demand generation activities should have a targeted impact on everyone who may be involved in the decision.
Activities that help create demand typically include:
- Advertising.
- Exhibitions.
- Fairs.
- Public Relations.
Sales Promotion
As for the policy of sales formation, it should cause the consumer to have a stable preference for a particular brand and a desire to make a repeat purchase. Simply put, the main objective 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 an environment of high competition and an overabundance of the market for goods, the activities of sales promotion activities are of particular importance. In general, these processes are divided into 2 large groups, depending on the object that needs to be affected.
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 loved one.product. You can also meet events such as:
- Free distribution of trial products.
- Receiving, exchanging or repairing used goods.
- Presentation.
- Firm 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 affect intermediaries and make them sell with much more 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 sales price (its sellers have the right to increase and keep the difference).
- Cash awards.
- Extra days off or time off.
- Gifts of moral encouragement.
PR and advertising
The policy of demand generation and sales promotion is based on a variety of different means and activities. But advertising and PR are more in demand and popular. With their help, the manufacturer solves the following problems:
- Provides the leadership of the organization with information about what the public thinks of it.
- Designs responses to influence public opinion.
- Guides the activities of the company's management in a way that is in the public interest.
- Maintains statereadiness for change, anticipating the development of possible trends in advance.
- Uses research and open communication as its main means of action.
To put it simply, PR helps build rapport between the public and the firm. Such events help to form 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 sales 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 work. Collect the information necessary to ensure the exchange.
- Sales promotion. Creation and mass distribution of product information.
- Establishing contacts. Connecting with potential buyers.
- Customization of goods to the needs of consumers.
- Agreeing prices for further transfer of goods.
- Transportation and storage of sale products.
- Search for funds that cover the costs of operating the distribution channel.
The first five functions are aimed at making deals, the rest help to complete them.
Each distribution channel consists of several levels. Under them, it is customary to mean intermediaries who perform a certain type of activity. Each of these activities aims toto bring the product closer to its end customer. Since both the producer and the buyer perform certain work, they are also components of the distribution channel. Its length directly depends on the number of intermediate levels.
Turnover
Another important term in the formation of demand and sales is the movement of goods. This means a complex 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 location and distribution channel, consider the following factors:
- Number of consumers in the distribution center and the size of the average purchase. Locations of stores, opening hours, the need for sales staff and credit conditions.
- Do not forget about the interests of the company. Thus, it is necessary to provide the ability to control profits, the work of employees. Arrange delivery and implementation process.
- As for the product, you need to determine the unit cost of the product. Consider storage complexity, shipping frequency, weight, etc.
- Don't forget about competitors. You need to know their number, the presented range of products. Understand the sales methods they use, promotional tools and distribution channels.
- Channels of distribution. Their number, functions, availability, legal aspects and placement.
Conclusions
Thus, demand generation and sales promotion can be considered a complex and multifunctional process.
You could say it's a circular process. Initially, the manufacturer, through surveys and marketing research, determines what needs customers have, creates products that fully meet these needs. After again, a study is carried out regarding consumer preferences, the finished product is adjusted to the expectations. Then information about the new product goes to various media, the manufacturer orders advertising campaigns. Establishes communication channels with distributors, supplies them with the finished product. Distributors sell the product to potential buyers, and after a while the company again conducts market research to find out how buyers feel about the product.
Associated needs of customers are determined along the way, the product goes through the process of modification. Information is brought to the potential buyer that the product can solve his problems, thus demand is formed. And where demand is most pronounced, the company makes points of sale for goods, that is, it forms points of sale. This is the whole procedure for the formation of supply and demand, if we talk about it in a nutshell.
