Scope of Online Sales

11 November 2016

An increase in the use of websites for promotion of consumer products by organizations is expected. Organizations encourage visits to their websites by the use of integrated marketing communications However, while advertisements are quite popular and a big business on the Internet, sales promotions on the Internet have not caught up yet. The aim of this project is to provide better understanding on the use of sales promotions for consumer products in an online environment. In order to reach this purpose, research questions on the types of sales promotions used online, as well as describing the environment in which they existed, were stated.

Based on these research questions, a review of the literature was conducted, resulting in a conceptual framework. This framework became the guide for this study’s data collection. A qualitative approach was used. Study was conducted on the background on an Electronics manufacturing company, Sunlit Electronics. Data was collected by interacting with dealers, customers and company’s website.

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The findings indicate that firm has not introduced online sales and online sale promotion activities through their website.

Even though there is a lot of scope for the same. The firm is not using their website effectively. The study finds out that the Firm can ensure transactions security for online sales and provide playfulness in websites which make them more effective. The overall project findings says that the company has scope to introduce this new sales feature and use different sales promotion materials to increase their sales and make website effective, they do not use many of sales promotion types for online promotions.

SALES PROMOTIONS Promotions should be considered in a broader context than simply price promotions and will include co-op advertising funds, display allowances to the trade, as well as display and feature advertising activity direct to the consumer. An appropriate promotional mix must be created in order to meet the promotional objectives of any given promotion strategy. The promotional mix is the combination of different promotional channels that is used to communicate a promotional message.

This will involve an appropriate selection from the range of tools that are available for use as part Sales promotion (Rowley J. 1998). A significant sales impact has been shown that sales promotions are widely employed by manufacturers and retailers. Generally, each sales promotion tool is used to achieve a unique objective (Srinivasan, S. S. and Anderson, R. E. 1998). Various studies indicate that online sales promotions can lift offline sales time after time, whether the item in question is a food item, personal care or a household product.

Furthermore, each campaign has typically brought in more than twice the amount that the company paid to advertise online. Sales promotions can offer many consumer benefits, the most obvious being monetary savings, although consumers also may be motivated by the desire for quality, convenience, value expression, exploration and entertainment (Kwak S. and Uncles M. 2005). Past studies of the effectiveness of consumer sales promotion have focused on monetary sales promotion. However, in practice, both monetary and non-monetary sales promotions are used widely.

In assessing the effectiveness of sales promotions it is necessary to examine both types. In the UK by 2001, over a one third of adults who accessed the Internet also purchased goods or services through it (Harridge and March, 2004). This means, of course, that two-thirds do not shop online, and some writers cite uncertainty and/or risk as preventing consumers from doing so. Some companies have been criticized for apparently thinking that all Internet shoppers are the same, instead of realizing that there are many reasons why a customer may visit a site.

On the one hand, the highly competitive marketplace compels marketers to increase their spending on the promotional mix. While at the same time promotional expenditures are being examined closely by top management as one of the most promising areas left for cutting costs and increasing profits. This heightened scrutiny puts intense pressure on marketers to develop and implement promotional programs that can add value to their corporations within the constraints of tighter budgets. Hence, there is a crucial need to re-examine how promotional dollars are spent.

One promotional element attracting intense scrutiny is sales promotion which consists of a diverse collection of mostly short-term incentives designed to motivate consumers or the trade to purchase a product immediately and/or in larger quantities by lowering the price or adding value. (Srinivasan and Anderson 1998) New strategies for Internet marketing have been predicted to include new ways of targeting, focusing on benefits; product strategy emphasizing authenticity and promotion based on well-managed websites (Aldridge et al. 1997) researchers have shown that sales promotions lead to real long-run increases in sales and profits (Dhar and Hoch, 1996; Hoch et al. , 1994). In addition, different types of sales promotional tools can have different impacts on sales, profitability, and value added to the brand (March, 2004). Sales promotions are important marketing tools in today’s businesses. They command a greater portion of the marketing budget than advertisements (in consumer-packaged-goods business) (Kumar et al. , 1998).

Marketing resources allocated to promotional tools represents a significant portion of a firm’s total communication efforts. For instance, in the USA sales promotion investments amount to nearly 30 percent of what firms spend on advertising alone (d’Astous and Jacob, 2002). In many European countries, sales promotion expenditures are larger than advertising expenditures. However, while advertisements are quite popular and a big business on the Internet, sales promotions on the Internet have not caught up yet. Part of the reason is that an advertisement is purely informational with no exchange value.

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