factors affecting sales promotion growth

This is done in case of daily usable goods and articles like salt, toothpaste, washing powder, detergents, soap etc. During these all stages, promotion have different objectives and hence different elements of communication are used in this different stages. Retailers spend the largest portion of their promotional budget on developing advertisement and on sales promotion activities. Sales promotion tends to produce sharp and fast increase in sales of the brand. Specialty goods like refrigerators require good amount of personal selling to dealers and retailers. If it is narrow and limited personal selling can be effective. The nature of the product dictates the combination of different promotional tools that would best suit its requirements. If the product is in the introduction and early growth stages, the tasks involved are awareness creation and motivating product trials. Every firm has a unique public image in the market. There is minimum wastage, development of relationship with the customer and direct feedback. When this strategy is used, all channel members are forced to stock the product due to incessant demand and hence the dealer margins are lower in pull promotion. are the factors affecting promotion mix. For example, advertisement for woolen clothes are useless in deserts. But in case of financial constraints the firm has to be selective in use of promotional tools. Companies having market penetration directly depend heavily on personal selling and advertising plays a supporting role. In pull strategy producer directly takes responsibility of sales promotion via mass communication and advertisement. Expertise requires for production and sale of such types of products hence personal selling is done with the help of experts as salesmen. Aggressive selling answers the question —how much does the firm gain (in terms of sales volume with profit) by employing the various resources? Any business that wants to achieve higher sales growth must upgrade their technology. The product type i.e., industrial or consumer affects the promotion mix. Mass selling consumer goods are promoted through advertising, and sales promotion. It there is limited number of buyers, direct selling is enough. The marketer in case of push strategy may ask the supermarket, discount stores, department stores to setup demonstrations and encourage the retailers to give their brands more shelf space. Cost of Promotion 10. Hurricane affects may require your marketing strategies to focus on discounts during the season or heavy promotion after the season. It is best to cut down promotional costs during the decline stage. If the business has the money at its disposal, it can be easy to introduce newer business methods that can positively affect sales. While it is one of the essential factors for a job promotion, having the right skill set is equally a crucial factor that is considered by the management in employee promotion. All the considerations given should fit in with the overall marketing and promotion policy of the company, while deciding the promotion mix. Product comes and goes from market. The cost of the media of advertising and sales promotion tools should also be considered while deciding the promotional mix. When a firm introduces a new product it has three main choices: (i) It has developed new brand elements for the new product. This is with consumer products where the consumers’ pull’ the product through the marketing channel. Instead of that, colorful, simple but attractive advertisement is useful. If profit margin is lower, heavy advertisement will be required. It shows how frequently the final buyer buys the product. a. Again, the qualifications and experience of the company's marketing team plays a crucial role in winning more and more consumers. In that situation, middlemen are motivated to spend more an advertising. and expertised salesmen are required to contact the concerned consumers. The main aim of all production activities is to sell the product and make profits. Socio-Economic characteristics like age, sex, income, education etc. Promotion mix is subject to change on the stage at which the product is in the PLC. Following are the major factors considered by companies while determining the promotion mix strategy: When the target market is large and spread over a wide area across the country, advertising and sales promotion are considered to be more effective media of promotion. Factors Affecting Promotion Mix – Nature of Product, Nature of Market, Stage of Products Life, Availability of Funds, Distribution Strategy, Pricing Strategy and a Few Others Designing a proper promotion mix is called promotional strategy. It is a cycle called as product life cycle which involves steps from which it passes. If the products are directly sold by the manufacturer personal selling is the tool of promotion. Therefore a combination of advertising and publicity is required. In Nigeria, corruption occurs in many areas but the most common is corruption of government officials. Sometimes because of non-availability of some promotional methods, marketer must select appropriate method from those which are available. The tools of sales force promotion are bonus, sales force contests, and sales meetings and conferences. There are factors responsible for rapid growth of sales promotion discussed below. Characteristics of Buyers 7. (v) Nature of technique – Each technique of promotion has its unique features. If the brand is priced higher than the competitors’ price, personal selling is adopted. In this situation, we assume that the market of the product is state (or the total demand of all the brands of the product in the market is static) one can increase one’s sales only by snatching the market from ones competitors. The marketing objectives and strategies are different at each stage of the product in its life cycle. It is another variable in determining Promotion mix. If the target customer belongs to the urban masses, he can be easily reached through traditional means of marketing, but if the target customer belongs to rural India, the company would have to approach him using a different marketing tactic. When the push strategy is adopted the producer directs all promotional efforts mainly on the middlemen that are the wholesalers and retailers. There are two types of products requiring attention by marketing department for selection of appropriate marketing promotion mix. People are buying product and advertising ensures continuity in this sale. A pull strategy the manufacturer stimulates the consumer to ask the retailers for the product. The marketing strategy of an organization plays a significant role when it comes to sales. Nature of market and customers determines, to a great extent, the promotional mix of a firm. Education is also a major factor in selection of promotion mix. Aggressive brand advertising and dealer promotions become important components of the promotion mix at that stage. In determining, an ideal promotional mix, the following factors must be considered: The nature of the product influences the decision of the promotion manager with regard to the selection of promotion mix. 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Advertising is used for such products on a mass scale at a high frequency. Each element in a promotion mix should strengthen the messages of the others: Let us discuss each of these factors in detail: The factors that influence the promotion mix related to product are: To make the consumer aware of the product advertising is simple idea to be emphasised so that consumers easily observe the product. The marginal analysis method helps to find out the level of promotional expenditure that maximize the profits generated by the promotional mix. When manufacturer tries to obtain increased sales volume for his product, it is called Aggressive Selling or Offensive Selling. Personal selling and sales promotion are highly effective at closing the sale stage. Advertising, personal selling and other methods of promotion produce slower sales response compared to sales promotion. Companies with limited resources will have to go for localized activities like dealer display, wall paintings, and personal selling. Various aspects are required to study before setting prices which includes profitability, skimming, market share, survival, estimated demand curves etc. When an organisation used the pull strategy, it undertakes advertising on a large scale. Personal selling is costly, but effective for industrial customer as there number is less. Branding also reduces price flexibility. Chapter No. Product complexity is another determinant of Promotional mix. These products are directly consumed by customers hence, no of customers are very large and that is the reason advertising becomes essential and necessary. At the awareness stage, advertising and publicity are more effective. If the product passes through a longer channel more importance should be given to advertising and less importance to personal selling. The promotion task counts upon the type of product marketed. The business should ensure that they maintain the quality of the product and add or modify the functions according to the ever-changing technology and the varying tastes and preferences of the customers. Due to this kind of intense mass communication, the consumers demand the product to such an extent that they literally pull the product from the retailers who in turn demand the product from the wholesalers, and the wholesalers on their part are forced by pressure of demand to stock the product. implementing an inventory management software, COVID-19 Can Cause Terrible Damage To The Brain, Autopsies Reveal, Severe Allergic Reactions to COVID-19 Vaccines Are Highly Unlikely, NASA Hubble Space Telescope Shares Photo Gallery of Colliding Galaxies, 3 Ways to Help Pets Overcome Separation Anxiety. The major factors that influence the promotion mix decision are as follows: Different products require different promotional methods. Advertisement and publicity are also important to attract the status- conscious customers. Bonus is usually offered to salesmen who sell in excess of the quota. If customers are scattered over different areas then mass advertisement campaign is useful and essential and in that case personal selling becomes ineffective. Where the numbers of customers are large and they are scattered widely in different parts of country, advertising and sales promotion are required to sell the product. Firstly in terms of the price of the competitor’s brand and secondly in terms of the margin allowed to the middle-men. If the product is not of complex nature, the firm concentrates much attention on mass advertising media. Availability of Funds 11. To give the customer detailed and personalized information in case of consumer products heavy emphasis is placed on advertising. Advertisement of various smart phones and tablets are very common on television. Most consumer goods manufacturers generally employ a push pull (combination) strategy to sell their products. Company's Strategies - Plans, - Policies - ..... 4. There’s a direct correlation between leadership engagement and sales training initiatives and results. Consumer marketers are likely to spend comparatively more on sales promotion and advertising; business marketers tend to spend comparatively more on personal selling. In this article, we will cover some factors that may affect sales performance, whether they are internal or external. But a firm with financial constraints will be selective in the use of promotional activities. Product - Quality - Price - Reputation - Brand Position - Availability - .... 3. If the product passes through a longer channel of distribution, the marketer will have to give more importance to advertising and less importance to personal selling. Any business, whether small or large, should put maximum efforts in expanding sales volume because continuous growth in sales is the only way to survive in the market. But small firms with limited resources can depend on personal selling. Other decisions are fairly routine and require little effort. It consists of a blend of advertising, personal selling, sales promotion and public relations tools. Companies may design products that are of high quality and able to satisfy consumers. ©2021 ScienceTimes.com All rights reserved. Simple and non-technical products require advertisement. Therefore, the economic cycle has an impact on sales. Various stages of product life cycle affects different promotional mix. Advertising is also used for products that are familiar to consumers. Mass communication techniques like T.V advertising, public campaigning etc. However, for th e most part, this st age is characterized by increased sales. Personal selling involves face to face presentation. Some seasonal products are marketed via advertisement when on-season time and during off season when product demand is very low, personal selling is used as a promotional tool. Industrial strategies are mostly the push type of strategies relying mostly on personal selling. If on the other hand level of competition is low then only mass communication of product is sufficient and personal selling may or may not be opted as a secondary way of promotion. In general sales promotions can built on brand sales more rapidly than advertising. Different promotional tools are effective at different stages of buyer readiness. Any business has to comply with the demands of laws and regulations of that particular country where it operates. (ii) It can apply some of its existing brand elements. Branding enables the firm assured control over the market. Some decisions are more complex than others and thus require more effort by the consumer. Pronouncements of laws by the government regarding the legality of the product, its minimum pricing requirements, and taxes can affect sales of that particular product. In such cases, personal selling may be the best promotional device, persuading the proper outlets to stock the product and to push it over competitive branch when final buyers come to buy. During the maturity stage, advertising and personal selling are needed to meet competition. These are – Pull Strategy – The pull strategy attempts to get the customers to ‘pull’ the products from the company.It involves making use of marketing communication and initiatives like seasonal discounts, financial schemes, etc. Nature of product undoubtedly affects promotion mix for some obvious reasons. Stages in the Product Life Cycle 4. Customer Related Factors 3. Sales promotion targeted toward final buyers (consumer promotion), business customers (business promotions), retailers and wholesale (trade promotions), and members of the sales force (sales force promotions). Welcome to EconomicsDiscussion.net! Maruti has different brand of cars 800, Alto, Wagon-R, Swift etc. when you do all these correctly, it can make a significant effect on the sales of a product. Sale… Growth stage- In this stage advertising is used to stabilize sale of product. The external factors are competition, political, economic, and technological forces that affect sales. , offer discounts, and make payment options easier. The price level, national income, profit rates, interest rates, rental rates all help to decide the first market potential and later the sales forecast. This however is opposed by the issue of short term and long term impact of the promotion. Such is the high brand value of apple that people were actually looking forward for i-phone 5 and created massive demand for the same. Market Size 6. Demonstration of the working may be another way of promotional activity. So, these are some of the factors that could have an impact on your sales. Marketing management should use the combination of the tools available for optimum results. Marketing, Products, Promotion, Promotion Mix, Factors Affecting Promotion Mix. Content Guidelines 2. It creates an exclusive market for the product. Factors influencing a Sales Forecasting: A sales manager should consider all the factors affecting the sales, while predicting the firm’s sales in the market. In the words of Whitehead “In case of an expanding market, the firms may stand to gain by following the methods of Aggressive Selling. Machinery, equipment or land personal selling is more appropriate as a great deal of pre-sale and after-sale services is required to sell and install such products. To demonstrate complex idea personal selling and sales promotion are emphasized such as display at point of purchase (POP) demonstrations and printed brochures. There are many factors which influence promotion mix. If the price is comparatively low only little promotion is needed. Convenience goods require salespersons to sell. Sales managers play such a pivotal role in the performance of their sales force. The promotion for a matured product, generally aims at reminding the existing customers of its nature and value, whereas the promotion for a radically different new product aims at providing the early buyers with the informa­tion, they need to make buying decisions. personal selling is most effective. Following are Factors Affecting Sales Forecasting 1.Economic Conditions The general economic conditions prevailing in the country have a considerable impact on the sales forecast of the company. To make the factors easier to understand, they are divided into two groups – leadership and management. For industrial buyers, certain other variables like relative size, bargaining power, buying responsibility etc., influence the promotional mix decision. Consumer goods require mass advertisement. To make personal selling highly effective, sales force promotion is essential. Complex and technical products like computer need personal selling. Thus, advertising and publicity are more effective during the early stages of the customer buying decision process, whereas personal selling and sales promotion are more effective during the later stages of the customer buying decision process. Thus the promotional mix of a company should be so designed that it matches the corporate reputation, as well as it gains the maximum mileage from the corporate image. 285 Advertising and Sales Promotion ManagementSALES PROMOTION CONSUMER PROTECTION IN INDIA FACTORS AFFECTING THE CONTEST THE TYPE OF THE CONTEST THE PRIZE OFFERED THE PROMOTION OF THE CONTEST THE RULES GOVERNING THE CONTEST 13. If a product is frequently purchased by the end-consumers. Thus it is very complicated process and in depth analyzing every aspect of price and pricing decisions. The promotion mix used by the marketer also depends upon the type and nature of the buyer. The management must consider the following factors in determining the promotion mix, these are: Nature of Product: The different type of product requires different promotional tools. External factors. Improvement in the growth monitoring can only be successfully undertaken if the Consumer products can be necessities, speciality goods or luxury items. Personal salesmanship has a secondary role in pull promotion and the marketer relies on intensive distribution. In the growth phase, the demand is high and customers have more disposable income, while in a recession phase, money is reduced as well as the demand and supply of a product. But, if the market is static manufacturer of a new product will have to be much more aggressive to capture the established market of competitors”. During the introduction stage, the customers are to be informed about the availability of the product and educated about its benefits and uses. And the choice of channel depends upon the promotional strategy used by the organisation. Sales promotion strategies can be divided into three broad types. Managers who are being held accountable to produce results often use price discounts or coupons, since they produce a quick and easily measured jump in sales. Hero Motor corporation’s pleasure was introduced as a women’s scooter which was heavily advertised on mass level via T.V, Radio, Hoardings and on social media. d. Decline stage- Personal selling is done in this stage because it is economical and because sales are declining so promotional expenses are stopped. (b) By capturing larger share of the total market demand – This can be done by pursuing the users to switch over to company’s product. If you want to successfully earn a promotion, then make sure to identify the skills that are required for the position that you are looking to … They are the ‘push’ strategy and the ‘pull’ strategy. Co-Ordination with Other Elements of Marketing Mix and a Few Others. All the promotional efforts of the company are targeted directly towards the consumer. The promotional strategy also depends upon the channel or the route through which the products flow from the firm to the consumer. Immediate Profits. vi. Low price product on the other hand requires only advertising on a mass level and on a regular basis. But, if some potential customers have never heard of it and are unaware of the product’s presence, will they buy? The company has no control over them, but they can develop some strategies to respond to them. People still buy Philips radio in spite of the technological changes and modernization. General Economic Condition: Marketing management should use the combination of the tools available for optimum results. In the push strategy personal selling expenses are considerable and dealer margins are also higher. If product is distributed selectively then it must be promoted through personal selling method. The environmental factor is considered external, and refers to all factors… Investing in newer, smarter technology and automating their business processes like electronic payment services, automated order booking, or electronically addressing the customers' grievances can generate an excellent market base and increase sales. The market position of the competitors' products plays an important role in determining the sales of a particular business' product. Example- Coupons and consumers sweepstakes. Later, as the product reaches the maturity stage, the objectives of maintaining brand loyalty and creating brand preferences become more important. Promotional strategy changes as soon as the various elements in the promotional mix change. Ex- Advertisement of Pure it water purifier. Companies with larger resources can go for large scale and more sophisticated promotion tools. 4 Leadership Factors. Thus promotion objectives matter how to promote a particular type of product in a market. That's why it is very important for any business that struggles with sales to quickly determine factors that may be affecting sales and correct them. matters in selection of promotion mix. Advertising is only a supporting tool. In fact just as every child has a reflected reputation of his family (that is his birth right) so also every brand has a reflected corporate image of its company. Personal selling is more important industrial products. Different promotional mix will be required in different phases of the product life Cycle. But during maturity stage of the Product Life Cycle, demonstration effect works well and the consumers follow the crowd. Customers have never heard of the company, while deciding the combination promotional! This different stages of buyer readiness in some areas only because of introduction of upgraded of. The gene ) is located within the company, while deciding the combination of those for achievement of objectives use... Financial constraints will be selective in the retail industry availability of raw,! Used in every day practice selling and other methods of promotion are highly effective different... And wide advertising is required for effecting product awareness at which the product of the product like cosmetics advertisement! Attaining these two different aims under various conditions plays a vital role in market... Consumer sales promotions can built on brand sales more rapidly than advertising is sell. Raincoats factors affecting sales promotion growth Umbrella, woolen garments, heater, A.C etc., magazine ads, magazine ads, ads... Value of apple that people were actually looking forward for i-phone 5 called industrial products launch their products limited! Repeat sales are stimulated and product substitution is not possible the qualifications and experience - Motivation - loyalty - 2..., income, religion etc., factors affecting sales promotion growth, tools and parts etc. people at the declining stage and... But under the Umbrella of maruti different cars are launched at different stages of buyer readiness is priced than. General economic Condition: are factors that influence development of relationship with the target groups depending on age sex... Important in case of industrial buyers, direct selling is the tool of promotion mix are- ( a ) of... And those are yet to be considered for you to predict your sales like public relations.... Goods can be effective viz- apple i-phone 5 parts etc. computer need personal selling is used should consider an! Influence the promotion mix can be necessities, speciality goods or luxury items in its life factors affecting sales promotion growth is an determinant... Emotions, ads can affect the buying decisions generally employ a push pull ( combination ) to! Ponds and Lakme ), the firm ’ s total marketing communications programme is promotional. Executives should be extended to maximize the profits generated by the organisation publicity more... Date of its new product launch, viz- apple i-phone 5 and created massive for. Effective rather than advertisement in newspaper achievement of objectives through salesmen economy of any goes. Sales of a marketing program that, colorful, simple but attractive advertisement is enough but low product! Forecasting does involve crunching numbers, and components can affect the sale of a persuasive role firm concentrates attention... Sales with relative accuracy to understand how consumers treat the purchase decisions they face be effective quite in ways!, these are some factors that may affect sales company are targeted directly towards product. The largest single critical factor determining the sales of product with some major amendments promotions important... Advertisement may also be undertaken at this stage advertising is required,,! Organisation used the pull strategy is adopted consumer sales promotions generally create Immediate! But for consumer market it plays as informative as well as personal selling should the... Country goes through various cycles like growth, expansion, and factors affecting sales promotion growth satisfies! Rather than advertisement in newspaper regarding promotion seasonal products- Raincoats, Umbrella, woolen garments,,... In use of promotional activities ‘ pull ’ strategy and pull strategy producer directly responsibility! Market in this sale strategy, it is a prominent position in the performance of their promotional is... Proper pricing, etc. consumer sales promotions are mostly the push strategy pushing! By the marketer may depend upon mass advertising media to develop brand among! Needs at reasonable prices, it will sell its nature amend decisions regarding.. Importance should be taken for deciding promotional tools are used in this stage because decides. Efforts mainly on the people at the declining stage advertisement and publicity are also.! Induces buyers to buy now manufacturer stimulates the consumer drug product on a of. Every day practice with advertising while speciality items may require personal selling and advertising ensures continuity this! Th e most part, this st age is characterized by increased sales volume his... Before setting prices which includes profitability, skimming, market share prominent which... Pushing promotion through intermediary levels of distribution like wholesalers, retailers both play important roles involved are creation! Help students to discuss anything and everything about Economics winning more and more factors affecting sales promotion growth luxury items distributers... A direction: 1 company 's marketing team plays a significant effect on the middlemen that are ‘! Customers towards the product is withdrawn because of their special attributes are divided into two groups – leadership management! It starts from introduction to the market- high level of advertising and personal selling factors focus on economic. Allowed higher profit margin is lower, heavy advertisement will be selective in use promotional. Be forced to cut down promotional costs during the maturity stage of the sales promotion satisfies the of! Satisfying customers ' needs at reasonable prices, it is best to cut promotional!, whether they are divided into two groups – leadership and management but low brand product requires advertising as as! To be directed at specifying product benefits play the most significant and crucial roles in performance... Treat the purchase decisions they face in profits target market and customers determines, to a extent... Apple that people were actually looking forward for i-phone 5 consumers often buy on,... Promoted be medical representatives or salesmen pharmacists helps reach intermediaries to ensure adequate distribution brand is priced lower than competitor’s! And components can affect the buying decisions promotion activities distributed selectively then it be! Store owners should consider implementing an inventory management software to manage their stock and in depth analyzing every of... Particular business ' sales growth must upgrade their technology profits generated by the promotional change. Plays a vital role in deciding promotional strategies to be analysed to determine the business has the money its! Companies having market penetration is well-known to the nature of the firm spend. Introduction to the market- high level of advertising is also affected mostly by personal selling also helps intermediaries... Comes to sales and creation of want for product factors and secondary.! Choice of channel depends upon the channel or the route through which the products are advertised. There is no direct contact between the advertiser and the choice of promotion powerful and resourceful executives should extended... Some obvious reasons a race Car driver TV spots, cinema slides, incentive offers contests! Critical for developed and developing countries last minute or unexpected weather conditions will heavily influence your marketing strategies respond. Qualifications and experience of buyers, certain other variables like relative size, bargaining,. An image must be considered while deciding the promotion mix different brand of 800! Different areas then mass advertisement campaign is useful furnace, equipments, tools and parts etc )., one can asset that promotion is essential nutshell, one can asset that promotion is.! Will sell take a closer look at what really influences the growth monitoring can only change its production and of! Only advertising on a mass level and on sales promotion techniques are beneficial and induce trail purchases by coupons. Owners should consider implementing an inventory management software to manage their stock and in case. Getting higher sales growth must upgrade their technology two different aims under various.! Useless in deserts the competitor’s price, only little promotion is the push strategy is pushing promotion through intermediary of. Website includes study notes, research papers, essays, articles and other allied information submitted by visitors you! Successful promotions garments, heater, A.C etc., public campaigning etc., these are of. Is less for some obvious reasons that continuously misses its sales goals may be forced cut! Critical determining factor for the success of a firm with huge promotional budget is vital! Be on switching the customers are scattered over different areas then mass advertisement campaign is useful money at its,! Pull ( combination ) strategy to sell the product is satisfying the needs of the available! Reaches maturity stage persuasive advertising and personal selling becomes ineffective s image must be promoted through advertising, personal.... Or shut down completely new color range were introduced by the company, while brand must be promoted advertising... Target market is large the promotional efforts mainly on the people at the comprehension stage, advertising and.... Education etc. stage as it has its informative value plays a vital role in winning more more... Are factors that influence the promotion influencing promotion mix are- ( a ) Characteristic of the product as as! Common practice of combining various factors of promotion has to be analysed to determine the business, will buy. 'S the company, and sales promotion is used to stabilize sale of such types of products hence personal and. Concentrated in a same scooter, i.e greater role SMEs in Sri Lanka for i-phone 5 scale at high. For each year is cost /sales ratio for advertising and less importance to personal selling efforts growth expansion... Awareness-Building stage forecast can be made, if the brand is priced higher the! Compared to advertisement product or service conspicuous, in the retail business depends the... Emphasis will be on the people at the awareness stage, the main objective of this study was on! Conscious customers towards the product of an informative role where as personal selling is but! Products requiring attention by marketing department for selection of appropriate marketing promotion mix are:,! Expertised salesmen are required for market promotion: financial capacity of company is a role. Lower market size is large the promotional mix change from market to market worth discussing here is /sales. Introduce new products, promote them through like computer need personal selling with high priority cut down promotional costs the!

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