Sales Promotion Schemes
Marketers employ a remarkable variety of sales promotion tools in marketing. A visit to your nearby supermarket will reveal numerous sales promotion schemes of various products, simultaneously vying for our attention. All these sales promotion schemes work on the principle that few people can resist a free gift, price reduction or special offer. One can be certain on one aspect — all these schemes work!
While sales promotion schemes may induce the buying habit or buying in large quantities to the exclusion of other brands, they can also induce frantic brand switching and the loss of brand loyalty.
The sales manager contemplating a sales promotion programme must bear in mind that a customer goes around a store scouting for the special offers, probably irrespective of brand. On the other hand, schemes widen consumer choice and encourage the consumers to make an experimental first-time purchase.
All these implications have to be considered carefully by the promoter of any of the sales promotion schemes discussed below.
|Promotion Schemes aimed at final consumers or users||Promotion Schemes aimed at Middlemen||Promotion Schemes aimed at Company’s own Sales force|
|Table: Classification of Promotion Tools employed for Sales Promotion Activities|
Important tools of Sales Promotion Schemes
Prize contests depend for success on the value or originality of the price and the number of prize offered, including the consolation prizes. The entry requirement can be proof of purchase such as a token or entry coupon detached from the pack, extra entries requiring extra purchases. To be legal, contests require an element of skill. Contests should be organized with adequate time for proper adjudication, and there should be publicized announcement of results.
2. Self-liquidating premium offers
The meaning of the expression ‘self-liquidating’ is that cost of liquidating the premium is collected from the buyer. For example, the manufacturer of a bathing soap, may offer a ‘soap box’ at a very nominal price if the soap is purchased. The manufacturer may buy the soap box in very large quantities at an attractive rate and then may make an attractive offer to the consumers to stimulate sales.
4. Mail-in free offers
A manufacturer offers to send an item free of cost, if a product is purchased (e.g., sending a pen free by mail for those who buy some stationery items). Here, no payment is required, only proof of purchase or perhaps a token payment to cover postage and packing is required.
Care should be taken to control demand and supply, and it is better to limit the offer in some way in view of huge financial implications of free offers.
5. Free gifts with goods
The gift is usually attached to the product, as with a toothbrush attached to a carton of toothpaste; Toys (carefully packed separately) may be inserted in packets of baby food.
6. Picture cards
Picture cards encourage repeat buying in order to retain them. They may be inserted in packs, or printed as cut-outs on cartons.
7. Gift coupons
Coupons, with a stated value is kept inside the packet. Again, these have to be collected in order to qualify for gifts, and so require repeat purchasing. A catalogue of gifts must be made available.
8. Cash premium vouchers or coupons
These can be redeemed at the retail shops as a price reduction. They may be printed in press advertisements, delivered door-to-door, or printed on packs as money off for the next purchase.
9. Cross-Couponing offers and other schemes
This is a popular co-operation scheme whereby an on-pack coupon or token enables the customer to buy another product (not necessarily made by the same manufacturer) at a reduced price.
10. Coupon Redemption schemes
This is fairly a recent on-pack idea, whereby a product carries a premium coupon entitling the customer to a discount at named store. This is liked by the store because the discount can lead to other purchases.
11. Jumbo or multiple packs
It signifies that a number of items are packed together or the container is extra large, and they are offered at a special price. It is an economical way of, both packing and buying such items, and ensures that the customer is well stocked with the products and may thus become a habit buyer.
12. Money-off offers
Money-off offers, are ‘flashed’, that is, printed on the wrapper or carton, a sure way of inducing impulse buying.
Another important attempt of sales promotion is through attractive package. Now-a-days customers are attracted by good and attractive packing of products. A good package is one which is attractive and protective, tells the product story, builds confidence, convenient to handle and above all economical.
The economy and attractiveness of packing are two important areas which the sales promotion department should always keep in mind.
14. Direct Publicity — Sales Letters / Circulars
The sales promotion department takes all necessary steps to ensure that a better relationship exists between the sales department and the customers/dealers. In this regard, sales letters have got an important role.
While drafting the sales letters and circulars, it should be kept in mind that a personal touch and some kind of intimacy is maintained. By doing so the manufacturer is not only able to attract old customers to renew their purchase but also able to attract new customers.
All these sales promotion tools could be considered by a sales manager before selecting the most appropriate tool for his organization. The next step would the planning and implementation of the sales promotion programmes.
Table: Examples of Sales Promotion Techniques adopted by Companies in India
|Brand / Company||Type of Sales Promotion||Offer||Product Covered|
|Samsung Electronics||Free||Purchase Samsung Video Player and Get: Any 3 Video CDs, and 60 movie rental coupon free.||Video CD Player, Video CD|
|Hero||Exchange||Bring Old Bike and Take home new Hero Bike. Consumer Finance upto 90%||Two Wheeler Bikes.|
|Philips||Exchange||Bring any old Electric Shaver and Take home a new Philips shaver with Rs. 700 off on HS840 or Rs. 500 off on HS655||Electric Shaver|
|Ponds||Price-off||Bring any toilet soap wrapper and Get Rs.5 off on any tube of Pond’s Face Wash.||Face Wash.|