B.COM Lecture Notes - Sales Promotion, American Marketing Association, Trading Stamp

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shanasafiyath

31 Jan 2022

School

Kannur University

Department

Accounting

Course

B.COM

Professor

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Document Summary

Sales promotion is an important method of promotion used to supplement and coordinate advertising and personal selling. Sales promotion includes activities like distribution of free samples, premium on sales, trading stamps, dealer incentives, fair and exhibitions, fashion shows, prize contest, etc. To improve the public image of the firm. To assist the salesman and the dealer. A wide variety of techniques are used in sales promotion. The following are the some of these techniques: Free samples: free samples of smaller size may be distributed to a few selected customers especially for introducing a new product. It provides an opportunity to the customer to test the suitability of the product before they actually buy it. Distribution of free samples is a way of introducing new products such as soaps, cosmetics etc. Coupons: sellers issue coupons to prospective buyers through newspapers direct means dealer"s package doctor salesman social media only pages, etc to promote the sale.

Related Questions

gross margin %:	(revenue - cost of goods sold) / revenue
expense ratio:	total expenses / revenue
return on sales:	net profit / revenue

Create a spreadsheet showing the income statement for acompany that had the following results last period.

units sold	100,000	consumer promotion	$1,800,000
unit cost	$40	personal selling	5 salespeople @ $80,000 each
price	$90	dealer promotions	$1,200,000
advertising	$1,500,000	product development	$700,000

1. Using $40 for unit cost, what is the effect of adding2 sales people, if sales increase by 5000 units?

silvertoad539

Differential Analysis Report for Sales Promotion Proposal

Rocket Shoe Company is planning a one-month campaign for August to promote sales of one of its two shoe products. A total of $50,000 has been budgeted for advertising, contests, redeemable coupons, and other promotional activities. The following data have been assembled for their possible usefulness in deciding which of the products to select for the campaign.

	Cross-Trainer Shoe	Running Shoe
Unit selling price	$41	$45
Unit production costs:
Direct materials	$ (8)	$(10)
Direct labor	(3)	(3)
Variable factory overhead	(2)	(3)
Fixed factory overhead	(3)	(4)
Total unit production costs	$(16)	$(20)
Unit variable selling expenses	(13)	(12)
Unit fixed selling expenses	(8)	(4)
Total unit costs	$(37)	$(36)
Operating income per unit	$ 4	$ 9

No increase in facilities would be necessary to produce and sell the increased output. It is anticipated that 18,000 additional units of cross-trainer shoes or 15,000 additional units of running shoes could be sold without changing the unit selling price of either product.

Required:

1. Prepare a differential analysis report presenting the additional revenue and additional costs anticipated from the promotion of cross-trainer shoes and running shoes.

Rocket Shoe Company

Proposals for Sales Promotion Campaign

Differential Analysis Report

Cross-Trainer Shoes

Running Shoe

Differential revenue from proposals

Differential cost of proposals:

Direct materials

Direct labor

Variable factory overhead

Variable selling expenses

Sales promotion expenses