Sales promotion: Meaning, Types and Benefits


Meaning of Sales Promotion

Sales promotion refers to promotional activities used by business for raising the sales and encouraging peoples to use their products. It is one which supplement and coordinate both personal selling and advertising thereby making them more effective. Sales promotion encompasses activities which enables in spreading information about products in society with the aim of boosting product image and inducing people to go for trials. This serves as an important source of information to customers that facilitates them to make informed purchase decisions. Sales promotion works as a part of total distribution system which mostly involve short-term incentive tools designed for stimulating the quick and great purchases of products or services by customers. 

Sales promotion is a key element of promotion mix which works on taking product toward buyers. It studies and take into consideration the existing communication gaps in between the customers and producer. The techniques used under it are non-personal and indirect in nature such as displays, exhibitions, demonstrations, trade shows, direct mail, expositions and many other non-recurring efforts. Therefore, any activity which is carried out by business organization for boosting the sales and revenue temporarily falls under the purview of sales promotion. 

Types of Sales Promotion

Various types of sales promotion are as discussed below: – 

Types of Sales Promotion


The sample is a type of sales promotion strategy under which customers are given goods free of cost for trial purposes. It is very effective in introducing new products expanding their market base. Sampling is a device that does the work of demand creation and increases customer’s interest in products. People via consuming free samples get a chance to compare the products with other substitutes existing in the market. Samples are given either in door-to-door delivery, sent by mail, attached to some other product, picked up in-store, etc. 


It is a promotional strategy under which customers are provided with vouchers for buying products at a discounted prices. Coupons are generally the certificate that reduces the price of product. Companies use this promotion for attracting and bring in more customers to their products. Coupons can be offered by attaching them with other products, inserting with into newspapers or magazines, and by mailing them. 

Free trials

Free trial is a scheme under which prospects are given invitations for using the product free of cost. It is performed with the hope that customer will purchase the product once he/she becomes aware with the features or benefits of a particular product. 

Premium offers

Premium offers are the offers which are run by businesses on a temporary basis with the motive of inducing customers for purchasing. Merchandise or gifts are offered free of cost or at reduced prices to people as an incentive to buy a particular product. Premium offers are most widely used in consumer goods like paste, soap, brush, glucose, washing powder etc. 


Bundling is a strategy in which products are put into the combination and offered for sale at the same price. Consumers are more attracted to buy products in bundled offers rather than a single offers. It is because the consumer believes that they getting two products at the price of one. An example of a bundling strategy is giving a free shampoo sachet with every piece of soap purchased by customers. 

Refunds and rebate

Refunds and rebate is a marketing tactic under which customer gets partial or full amount back after making purchases. The customer sends a proof of purchase to the manufacturer who in turn refund by mail the part of the purchase. In case, if the customer is not at all satisfied then he/she is liable to get the full amount refund. This strategy develops new customers and also strengthens brand loyalty. 


Contests refer to competition which are organized by companies for introducing new products and attracting customers. In order to enter in competition, consumer need to buy product and submit evidence along with entry form. In these contests, skills and ideas of people are tested. The performance report of every participant is submitted with panel of judges who award the winner with prizes. This promotional strategy is useful in stimulating the sales of brand at retail level. 

Patronage award (Trading stamps)

Patronage award refers to values in cash or other form given to the customer for buying the product in a particular shop. Sellers provide premium in the form of stamps to their consumers. Such stamps can be redeemed by customers at stamp redemption centers. Patronage awards serve as a useful means for attracting people to retail shops.

Benefits of Sales Promotion 

The benefits provided by sales promotion can be well-understood from points given below: – 

Benefits of Sales Promotion

Attract new customers

Sales promotion serves as an important means for attracting a new range of customers by the business organization. This promotion strategy is composed of distinct attractive offers which easily grab the attention of peoples. Product samples, coupons, giving free trials, refund offers, and giving product demonstrations are a few of the schemes included under it. All these persuade customers to make on-spot purchase decisions.  

Introduces new products

Companies run various sales promotion campaigns in the market for introducing their new products. Buyers are induced to purchase the new products by distributing free samples. Dealers are also motivated to stock and sell new products by giving money or merchandise allowance. 

Bridges between personal selling and advertising

Sales promotion is composed of several activities other than advertising, publicity, and personal selling. All such activities work towards bridging the gap in between personal selling and advertising. 

Raise sales during off seasons

It enables businesses in boosting their sales volume during the off-seasons. There are many products that are only demanded during their peak seasons and there is less or no demand at the time of off-season. This strategy enables in retaining customer’s attention via offering them short-term incentives which results in stimulating the sales volume.

Encourages business buyers

The business buyers refer to retailers and wholesalers who buy brand goods for resale purposes. For motivating the wholesaler and retailer for stocking more amount of goods, different promotional activities are conducted. Dealers are compensated by providing advertising and display allowances for the space given by them for the display of products. In addition to all this, even premiums are offered for buying products above a particular level.