Types of Sales Promotion18th February 2021
Sales promotion is a type of Pull marketing technique. If you have a product which is new in the market or which is not receiving a lot of attention, then you can promote this product to customers via sales promotion. You can use various techniques like giving discounts on the product, offering 1 + 1 free schemes, etc etc.
Consumer Sales Promotion:
The consumer sales promotion involves application of the following tools:
Samples are offers of a free amount or a trial of a product for consumers. The sample might be delivered door to door, sent in the mail, picked up in a store found attached to another product or featured in an advertising offer. Sampling is the most effective and most expensive way to introduce a new product e.g., Hindustan Levers introduced Ariel Trial Pack for its detergent powder Ariel Micro System.
Coupons are certificates which entitle a consumer to buy the product at reduced prices. These coupons can be mailed, enclosed in other products or attached to them or inserted in magazines and newspapers. Coupons are accepted as cash by retailers.
Cash refund or rebate provides a price reduction after the purchase rather than at the retail shop. The consumer sends a specified ‘proof of purchase’ to the manufacturer, who ‘refunds’ part of the purchase price by mail. It is a good device for creating new user and to strengthen the brand loyalty.
- Price Packs:
Price Packs (also called cents-off deals) are offers to consumers as discount e.g., Rs.2 off on a Brooke Bond pack of 500 gms. Price Packs are very effective in stimulating short- term sales, even more than coupons. The price pack may be in the form of a reduced price pack (20 per cent extra Five-star at the same price) or a banded pack (tooth brush and tooth paste together).
Premiums (or gifts) are merchandise offered at a relatively low cost or free, as an incentive to purchase a particular product. Reusable jars, key chains, containers.
- Prizes (Contests, Sweepstakes, Games):
Prizes are offers of the chance to win cash, trips or merchandise as a result of purchasing something. A contestant calls for consumers Co., submit an entry — a jingle, estimate, suggestion to be examined by a panel of judges who will select the best entries. In sweepstakes, the customers submit their names which will be included in a drawing of prize winners. A game presents consumers with some puzzle or missing letters. All of these tend to gain more attention than coupons and premiums.
- Patronage Award (Trading Stamps):
These are values in cash or other forms. Such awards are given to those customers who shop only at a particular place. i.e., when the customers are loyal to a particular shop. Then they are treated as patrons.
- Free Trials:
Free trials consist of inviting prospective purchasers to try the product without cost in the hope that they will buy the product.
- Product Warranties:
Product warranties are important promotional tools in sensitive consumer markets.
They involve two or more brands or companies that team up on coupons, refunds and contests to increase their pulling power.
- Point-of-Purchase and Demonstration:
POP displays and demonstrations take place at the point of purchase or sale.
Sales promotion activities are conducted to stimulate consumer-purchasing and dealer-effectiveness.
- There is a provision of free display material either at the point of purchase (POP) or point of sale (POS), depending on one’s viewpoint. Display reaches consumers when they are buying and actually spending their money.
- Retail demonstrators are supplied by manufacturers for preparing and distributing the product as a retail sample, e.g., Nescafe instant coffee to consumers for trying the sample on the spot or demonstration regarding the method of using the product.
- Trade deals are offered to encourage retailers to give additional selling support to the product, e.g., toothpaste sold with 30 per cent to 40 per cent margin.
- Seller gives buying allowance of a certain amount of money for a product bought.
- Buy-back allowance is given to encourage repurchase of a product immediately after another trade deal. A buy-back is a resale opportunity.
- Seller gives free goods, e.g., one free with 11, or 2 free with 10 are common free deals.
- Sales contests for salesmen are held.
- Dealer loader (a gift for an order) is a premium given to the retailer for buying certain quantities of goods or premium for special display done by a retailer.
- Dealer and distributor training for salesmen, which may be provided to give them a better knowledge of a product and how to use it.
Sales promotion plays a major role in consumer goods promotion and it is used in a limited way in the case of Industrial Goods. Industrial goods marketing may involve provision for financing, training of users, buy-back arrangements and even reciprocal trading. POP materials are used for items that are sold through industrial distributors who maintain show rooms.
The major use of exhibits are in conventions, exhibitions and trade fairs. Speciality gifts such as key chains, calendars, coffee mugs, pens with messages, logos, can be handed over to industrial customers which will serve as a reminder of the company.
- Joint Promotion:
Some years ago, in an unusual print ad, Mafatlal Fabrics endorsed Procter & Gamble’s new detergent product, Ariel. Not that it was only Ariel that stood to gain from this approach, Mafatlal too, gained mileage through the ad. This was, perhaps, the first noticeable instance of joint promotion on the part of two brands that hoped to gain in visibility.
- Exhibitions and Trade Fairs:
An exhibition stand or stall is a form of showroom, but it is a very distinctive form of showroom. It provides a temporary market place at which buyers and sellers meet. There are various types of exhibitions, international trade fairs, national and local fairs and exhibitions (usually sponsored by a chamber of commerce or trade association).
- Indian Fashion Scene:
The fashion industry has Rs.20,000 crore internal market and Rs.3,000 crore export market. About 50,000 jobs are generated each year in the fashion field. Stagnation in this field seems a distant fear as the fashion market is growing at a tremendous rate. Hence, fashion shows and exhibitions are becoming very popular as means of promotion.
- Exclusive Showrooms:
Generally, the showroom idea is used as a tool of distribution. Currently, in the face of growing competition and unfair undercutting by dealers, a number of consumer durable companies are opening plush, exclusive showrooms, arcades and galleries as powerful means of sales-promotion to boost their sales. Exclusivity plays the role of Unique Selling Proposition (USP) to increase the sales.
Sponsorship consists of giving money or other support to a beneficiary in order to make the activities financially viable or to gain some advertising, public relations or marketing advantage. The support could consist of money, trophies or other items in kind. The beneficiary could be an individual or an organisation.
It is also called marketing public relations. Publicity is not paid for by the organisation. Publicity comes from news reporters, columnists and journalist. It comes to the receiver as the truth rather than as a commercial. Public relations and publicity taken together become the fourth major ingredient of promotion-mix. These activities are, however, not controllable by the firm. Every firm tries to create a good public relations so as to give good publicity.
Defective products, unfair trade practices, anti-social activities often result in unfavourable publicity, consumer ill-will, bad product image, increased consumer protests, Government regulations and so on. The firm, having a poor public image, will have lower sales and lower profits. Reducing the impact of bad news is as important as creating good publicity.
Under the social marketing concept, publicity and public relations are assuming unique importance in the firm’s promotion-mix. Consumerism is altering consumer attitudes not only towards products, but also towards the firm and dealers selling the products of the firm.
Public relations have now become an important marketing function. The total process of building goodwill towards a business enterprise and securing a bright public image of the company is called public relations. It creates a favourable atmosphere for conducting business. There are four groups of public:
(4) The community.
The marketers should have the best possible relations with these groups. Public relations complement advertising by creating product and service credibility. Effective marketing communication is not possible without establishing and maintaining mutual understanding between the company and its customers.
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