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Keels Super is one of the premier super market chains in the country, which adds value to their products to improve customer satisfaction and retain them in the long term. Keels Super is a supermarket chain, which has number of supermarkets in many of the major cities in the country. Keels Super is the first super market chain in the country who took the initiative in changing the supermarket culture by making many changes, specially in the last decade. There were only few supermarkets for the last two decades, but they were not customer orientated, but Keels Super is the first supermarket that has made a rapid change in customer care. They have introduced some valuable and effective sales promotions in the supermarket industry. The customers have been enjoyed benefits such as wide choice easy payment comfortable shopping environment. Keels have produced lots of employees in Sri Lanka due to their effectiveness of their outlets. Now Keels has been one of the leading supermarkets in Sri Lanka, because their customer services, quality product, and their marketing techniques are very effective than other supermarkets. In the recent past Keels interested in penetrating into areas which it does not have market presence? (Ex.)A supermarket outlet was opened in Gampaha and it tries to penetrate in to untapped areas of the business.
In marketing, sales promotion is one of the four aspects of promotion. (The other three parts of the promotional mix are advertising, personal selling, and publicity/public relations.) Sales promotion is a short term incentives will encourage the purchase of sales of a product or service. Sales promotions are non-personal promotional efforts that are designed to have an immediate impact on sales. Sales promotion is media and non-media marketing communications employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability.
Sales promotion can increase the sales in the short term and sale promotion can increase awareness of the brand among consumers. In promotion techniques sales promotion only give tangible benefits. Sales promotional activities are undertaken largely by retailers to improve sales level in the short term. There are two kinds of sales promotions one is trade oriented sales promotion and the other one is consumer oriented sales promotion. Consumer oriented sales promotions are directed at consumer the end purchases of goods and service and are designed to induce them to purchase the market brand. Under consumer oriented sales promotion there are many different types. Which are sampling coupons premiums contest refunds bonus packs, price offs, frequency programs, event marketing. Trade orientated sale promotions are programs designed to motivate distributes and retailers. Here also there are many types of promotion. Which are buying allowances, free goods promotion and sales contest.
Why Sales Promotions are Important?
Always sales promotion will earn profits in the short term. Sales promotion induces the customers to buy additional amounts products.
Retail store business is highly competitive. There are many leading competitors such as Keells super, elephant house super pola, Esviems and many others. All the chain stores compete each other to retain their customers without loosing to the competitors. In order to retain customers and sustain in the market, sales promotion is seems to be very important in the industry
Introducing new products
Sales promotion is the easiest way to introduce new products to the market as because these activities will easily gain customer attraction and sales promotion will induce the consumers to buy the product. E.g. discounts, free products.
Declining brand loyalty.
People are not brand loyal. They frequently switch brands, to convince them we have to give promotion to consumers.
Influencing the purchasing power.
Because of the sales promotion, customers can save money and will be able to buy many products. Therefore, the consumer can purchase the products, which are not moving very frequently.
2.0 Identifying the sales promotion
Most of sales promotion activities which will be analyzed and evaluated in the latter part of report. This report is based on the recent sales promotion campaign began by cagills for the Christmas season. They design and started a bunch of sales promotion activities as Christmas offer to increase sales and retain customers. Before analyzing every single sales promotion activities done by cargills, following part will describe the Christmas sales promotion activities as a whole, under the following headings.
.increase the sales of various kind of products
. Increase net sales and profit
. Increase the number of purchasers and rebuyers and retaining the customers
B) Target Audience:
. house wife
. family people and young people
C) Period of time:
. Promotion programme is designed especially for Christmas season.
There fore the programme will began 2nd of April and will be conclude on 20th of April
D) Media Support:
. In order to stimulate the awareness of sales promotion activities of cagills, 45 second TV advertisement, will be telecasted on leading media channel. During noon and evening time where house wife spent time in front of their television. It will also back up by press ads, such as in store and out store handouts. Leaflets and broachers.
. Cargills plan to increase their over all profit by 30%. Where 13% will be spent on promotional activities.
3.0 Sales promotion activities undertaken by Keels Super
1. Strategic alliance with Indian oil company petrol station: - Cargills food city has opened 24 hours express retail outlets in 12 petrol station of IOC (LTD). These outlets specially constructed to sell limited range of products to customers in parallel with increasing fashions of starting up supermarkets along with petrol stations. It’s interesting to understand the people who come to fill petrol for their vehicle need to wait in queue at peak time. People will drop in the supermarket to do shopping during that time. In the mean time Cargills engaged in strategic alliance with commercial banks to build up ATM machines in IOC petrol stations. Which altogether help to improve sales promotion of food city outlet ultimately.
2. Strategic alliance with commercial bank: - cargills food city went into an agreement with commercial bank for them to have limited range of banking operation within their food city branches. This is regarded as minicom. It reduces people to carry unneccary larger amount of cash. They can withdraw money as per their requirements. This will increase supermarket sales not only in the short term, but also in the long term too. One of the main strategy cargills uses is pulse buying. They place products in a method that touches customers buying decisions. Due to this people may some times run out of cash. Minicoms will be greatly useful for the customers at these types of situations.
3. Price- off deals: - price offs are reducing the price by an adequate percentage from the ordinary price of the product. Cargills have done lots of price offs in the past and still doing it. Price off promotion will encourage consumer to purchase larger quantities. For example, recently they gave 3%-10% discounts to HSBC credit card buyers and 20-40% price reduction for Gillette products. Cheaper price enables customers to bulk purchases. These bulk purchases will load the customers with additional quantities; therefore cargills can retain their customers without loosing them to competitor’s price off programs.
4. Contests/Sweepstakes: - contests and sweepstakes are some of the other tools of sales promotion techniques. Contests are where consumers compete for the prizes and money on the basis of their skill and ability. Sweepstakes are where the consumers only have to submit their names and addresses and the winners will be selected by a draw. Increased purchase will do the same in the chance of winning. Cargills introduces raffle draw systems time to time to attract consumers and encourage them to purchase more. Recently they introduced these promotions by giving one hundred thousand values of electric items. This sweepstake runs from December to January.
5. Product sampling: - which means where the product has been given to the consumer for trial basis. There are different ways of sampling, which are door to door sampling, sampling through mail, in store sampling, on package sampling and event sampling. Cargills uses package sampling for the promotion and they use in-store sampling for food items. Cargill’s offers products at free of charge for specific product range. Recently Cargills gave two shampoo packets with the lux soap. If you pay for one you will get another product free of charge, which will really help to increase the demand. From this promotion, Cargills can get immediate feedback from the customers. However, there are disadvantage too, for instance, cost will be high.
6. Event marketing: - Event marketing is another sales promotion technique. In event marketing, the particular event such as sports, games, and concerts will be linked with any company’s name or with any brand names in order to stimulate sales for the selected company or brand. Recently Cargills sponsored for Sharukh Khan live in concert. From these events, Cargills can easily promote their corporate image as well sales.
7. Introduces festival hampers: - It can be observed during the festival season cargills food city offers hampers with multi products, and give significant discount on those hampers. This will really improve the short term sales performance quite considerably. Hampers include chocolates, biscuits, alcoholic beverages, cordials, cheese, and accessories.
4.0 Draw backs of the sales promotion conduct by Cargills
However sales promotion activities mentioned above have their own disadvantages. All the activities that mentioned above have general weakness that it works out only in the expense of company’s profitability. Its clear sales promotion activities are a costly exercise and will consume time and effort, but it will adversely affect company’s profitability. E.g., sampling, discount, price offs. Some argue sales promotion activities are short-term oriented and not have any longer term impact in food city sales promotion. In the mean time, some customers view sales promotion activities as window dressing, which means they won’t improve customer satisfaction for the long term only for the short term. Another negative side of sales promotion is customer perception. In most of the situations, customers view sales promotion activities as stock moving techniques. They usually imagine that retailers try to sell out old stocks in the name of sales promotion. Therefore, people sometimes are not interested in participating in sales promotion activities, as they perceive that price reduction will do the same in quality as well. Finally, sales promotion activities fail in attracting loyal customers. Sales promotion activities will only attract people who are more sensible to price rates. Those people will only purchase products at cargills when the sales promotion activities are on process and will be easily washed off to competitor’s promotional activities. It seems to be a great disadvantage that sales promotion activities fail to build loyal customers.
As mentioned earlier sales promotion is an effective tool to sell the products to consumers. Because of the encouragement that has been provided by cargills are benefit alot. Before doing a promotion, we have to analyze the cost and have to determine the profit that we will get. Sales promotion activities should be planned in a proper way to obtain maximum profits. It involves lots of marketing research, which is not an easy exercise. According to cargills, they should improve in relationship marketing rather than just focusing on short-term sales target to establish a strong base of loyal customer, which will enable them to succeed in the market.
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Stewart, D. & Galen, B.(1998). The promotional planning process and its impact on consumer franchise building the case of fast moving goods companies In New Zealand. The Journal of Product and Management, 7(6), 557-567.
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"Promotional Marketing - Keels Super." 123HelpMe.com. 10 Mar 2014