Price-packs are also called value-packs. 6. 3. Retailers may announces price discounts for a variety of reasons. You drive sales by promoting the benefits of your company's goods or services to pools of potential buyers. Personal and nonpersonal communication channels can be used for marketing communications. These promotions can be developed for durable as well as non-durable goods. Marketing, Products, Sales Promotion, Sales Promotion Tools and Techniques. The fourth element of the 4 P’s of Marketing Mix is the promotion; that focuses on creating the awareness and persuading the customers to initiate the purchase. Akai offered a 14″ colour television on purchase of 21″ colour television. Or, there may be some flexibility in conditions, such as the consumers may have the option to send one, two, or more proofs of purchase along with a specified sum of money to obtain the premium quickly. For more Business Studies , keep visiting and get ready for your exams. Dealers promotion methods are those which encourage dealers and distributors to buy and resell more and more quantity of the product. Price discounts (also called cents-off deals) are communicated to the consumers through advertising, at the point-of-purchase by listing the reduced price on the package or signs near the product or window display, or by the sales people. Hundred prizes of Rs. Consider your unique selling points. All these sales promotion schemes work on the principle that few people can resist a free gift, price reduction or special offer. Sales Promotion 4. Sales pro­motion is generally broken into two major categories—consumer-oriented and trade-oriented activities. Brand image and profit can be hurt by over use of price related sales promotion tools. roughly a ratio of 60:40 is maintained in dealing both of them. Sales promotion works on a direct behavioral level. It can also be used to reinforce advertising for the good or service. Grocery stores owners informed the consumers regarding the possibility of prizes that consumers can win with continued use of the brand. These measures are called the tools or techniques of sales promotion. In-mail premiums do not provide an immediate reward at the time of purchase. Experience shows that everyone concerned, consumers, trades people, and sales force, get a share of excitement when the contest or sweepstakes is well planned and executed. Referral Programs 1. The manufacturer of Sensodyne has been reaching out to local dentists of Mumbai who have been distributing free sample of these toothpastes to create awareness among their patients. It is also possible that the retailer bought excessive stocks when the manufacturer offered trade deal and to clear this excess inventory the retailer offers a price discount to consumers. Most of these techniques can be used both for consumer as well as trade promotions. For examples, Sensodyne Toothpaste meant for relieving tooth sensitivity is unique product introduced in India. Sales promotion programs often require big implementation costs. Manufacturers often offer extra incentives to retailers to gain their co­operation. A lottery prize is decided on the basis of chance and requires a “consideration” for entry that may be proof-of-purchase of ticket or a product. xiv. As opposed to businesses—which typically make large purchases to meet previously […] Coupons generally attract older, better educated, urban, middle-income families. Free Gifts to Dealers/Distribution; such gifts increase with increase in quantity of purchases. Coupons; 3. These are at the heart of sales promotion. Consider which promotional activities will best meet your marketing needs. Some firms take back partly or wholly the unsold stocks lying with the retailers, and distribute it to other dealers, where there is a demand for such stocks. These coupons are either advertised by producers/retailers in newspapers or distributed in weekly flyers via mail across households. Consumer promotion tools 1. b. Consumer sales promotion seeks to reach new users, keep current users, and entice users to stock up. Various tools for direct marketing are emails, text messages, catalogues, brochures, promotional letters and so on. 7. Regardless of what your company sells or does, it’s important to learn about who your consumer is so you can effectively target them with your promotion strategy. Consumer promotions are used by retailers to induce customers to buy products or services. On one coupon would be ‘SA’ the other two coupons should have ‘NT’ and ‘RO’, thereby completing the word Santro and entitling the consumer to win a Santro car by submitting the three coupons. Plagiarism Prevention 4. This is an example of a very clever sales promotion of a product, which is considered a commodity. Marketing tools are tools that companies use to develop and promote their products and services.In this context, the word ‘tools‘ refers to techniques, strategies, and materials. Premiums – Goods offered either free or at low cost as an incentive to buy a product. These are part of Interest promotions because such sales promotions create not only interest but also produce excitement and enthusiasm in consumers. However, the technique proved to be extremely effective in retaining the customers and motivating them to continue using the same brand for an extended period of time. For example- milkshake along with Nescafe, toothbrush along with a toothpaste. Cash refund offer; 6. Along with the trophy, the dealer may get a special gift such as a sponsored tour within or outside the country. Dealers promotion methods are those which encourage dealers and distributors to buy and resell more and more quantity of the product. Many consumer durables such as refrigerators and cars are sold on installment basis. If he overuse of sales promotion may result in negative attitudes. The Random House Dictionary defines a refund as repayment of money, and a rebate as a return of part of the original payment for some service or merchandise. For instance, a car worth Rs. These two examples present the use of the same method of sales promotion. Public Relations. Various tools of sales promotion, also known as methods of sales promotion may be divided into two parts – (i) Consumers Pro­motion Methods (ii) Dealer Promotion Methods. In India, contests and sweepstakes are very popular promotional techniques and are frequently used in diverse product categories and services. Sales promotions are a marketing communication tool for stimulating revenue or providing incentives or extra value to distributers, sales staff, or customers over a short time period. Event Sponsorship e.g., Sponsorship of sporting events. A producer of branded wheat flour, “Shakti Bhog Atta”, announced an interesting promotion. Promotions are used to gain potential customers or keep current customers satisfied. There were no first of second prizes, the top prize was a Santro car, besides many other prizes. The duration of contests and sweepstakes varies considerably, depending on the objectives set for sales promotion. POP can be very effective if done properly i.e., using better quality POP materials instead of cheap paper signs or ill- conceived displays. Samples given while purchasing a product in a retail store. Offer of a coupon is a very versatile technique and can be used to achieve many different sales promotion objectives. Sales Promotion: Sales promotion covers those marketing activities other than advertising, publicity, and personal selling that stimulate consumer purchasing and dealer effectiveness. Displays, Trade Fairs, Melas and Exhibitions in different parts of country. xi. The offer was valid for a month only. In general, some of the commonly used consumer-oriented promotion tools are as follows: In this case, small units of free samples are delivered door to door, sent through direct mail, attached to another product, or given along with the purchase of some other product (e.g., soaps, soft drinks, detergents or other items). The seller determines the number of installments in which the price of the product will be recovered from the customers. The flexibility of sales promotion has the potential of being used by small and large companies, selling goods or services, and by profit and non­profit organisations. It is very stimulating short-term sales, especially when the discount provided is genuine one. What makes your product/service different from everyone else's? By announcing a price discount on some popular consumer item, the retailer’s intention is to increase store-traffic. Advertising Novelties, that is, small, interesting or personally useful items, low cost, and eye catching can be used for sales promotion. Gillette announced a refund offer. make sales).When it comes to direct selling, finding ways to attract and retain customers is vital. v. Sales Contests and Sweepstakes – Three kind of contest prizes are – (a) Cash awards, (b) Merchandise Prizes, (c) Special Honour viz., winner to appear in a TV show. Computer magazines often include a compact disc with each issue. Producers can organise competitions or contests among salespersons to encourage them to generate more sales from new customers. The retailers serve as the agents of manufacturer in accepting and redeeming the coupons and send the collected to the concerned manufacturer along with their claims of reimbursement. A sweepstakes is a random drawing and is sometimes called a chance contest. More often discounts are offered to match or beat the competitor’s prices. Such promotions work very well in gaining the attention of consumers, particularly at the point-of-purchase (POP) among similar brands, and may also encourage unplanned or impulse buying. The tools of sales promotion are employed primarily by two of the principals of marketing – the manufacturer and the retailer. Such displays act as last minute inducement to buy. To decide which entries are first second, or third, etc., an expert or a panel of experts examines the entries and judges the winning ones. PR Events 1. If more correct entries are received, the second stage then involves a draw of chance to decide the winners. Eight significant differences between personal selling and sales promotion are described in this article. Step Two: Segment Your Overall Market. Direct selling refers to selling products directly to the consumer in a non-retail environment (i.e. Considerable brand switching is possible if only one proof-of-purchase is to be sent to the marketer. Advertisement Allowances/Materials, encouraging dealers and distributors to advertise products. Television and/or Movies 1. The prizes may be gold or silver jewellery, hefty sums of money, cars, two-wheeler autos, colour televisions, computers, music systems, free air tickets, stay in five star hotels, holiday in health resorts, and anything else depending on the imagination of the marketer. In this article we explore: 1) the relevance of identifying customer needs to marketers, 2) main customer needs and marketing techniques used to discover them, 3) customer discovery 4 steps -3 phases, 4) customer validation, and 5) modern marketing strategies to … Letters on some coupons were part of either the brand of washing machine, television, or wristwatch, etc. In most cases the structure represents a typical pyramid, that is there is a bumper prize of very high value. There is no precise answer, however, experts generally agree that discount should be at least 5% to 20% of the normal price. Some of the commonly used tools and techniques of sales promotion are:-, 1. Additional quantity of the same product or additional unit of the product is appreciated as a reward by the consumer. c. Coop Sampling in which several different products are delivered in same container or at same time and distribution costs are shared by various manufacturers. Unlike, price cut off or discounts, rebates are provided after the full payment of full invoice amount. d. ‘Trial-size’ Salable Samples e.g., mini bottles or cartons of a product such as shampoo, offered at nominal prices at stores, Both retailers and consumers like this kind of promotion, Retailers like because they keep the profit while to consumers, it reduces the risk of trying new products. The success or otherwise of a contest or sweepstakes depends largely on the selection of prizes and prize structure. TOS 7. Sales promotion activities include special offers, displays, demonstrations, and other nonrecurring selling efforts that aren’t part of the ordinary routine. This may take any of the two forms, bonus pack and banded pack. Privacy Policy 8. Before publishing your articles on this site, please read the following pages: 1. Free Samples 3. It is a variety of short-term incentives to encourage trial or purchase of a product or service. After sale service free of cost during certain period. Example – if an E-commerce website gives 10% discount on its products, then it wants the consumers to make the best of this deal. When used as an offensive weapon, the objective is to generate additional sales and increase market share and long run profits. Anyone can send the answers to the questions on a postcard. The pricing Strategies of these products are considered as no frill low prices where the promotion and the marketing cost of a product are kept to a minimum. Another variation of this technique is “buy-one-take-one-free”, or some similar offer (it could be “same for less” or “more for the same”). 55.50. Out of these correct entries, depending on the number of prizes to be given, some are picked up on a random basis to declare the winners. ix. In local-convenience stores, the shopkeepers recommend certain products of commodity type, such as rice, flour, or cooking oil to consumers. A variation of this offer, and more commonly observed, is when the marketer develops special packs of the product containing more quantity, but the price is proportionately low. Sales Promotion is a tool used to stimulate sales by employing incentive element to attract customers. 7. Step Two: Segment Your Overall Market. This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. Consumer promo­tion methods are those which directly encourage consumers to buy product in more […] The pack contained four cakes of soap at the price of three). Media Introductions 1. pen, dairy, calendars, key etc. There is a subtle difference between these two terms. This is a fairly popular technique in cases of footwear, shirts, jeans, towels, and many other varieties of products. Quantity Discounts for purchasing product in large quality. This is a way to reward the present consumers and may not have any impact on the users of competitive brands. Sales promotion is generally defined as those marketing activities that provide extra values or incentives to the sales force, the distributors, or the ultimate consumer and can stimulate immediate sales. To add an element of extreme urgency and speed up the response, early bird prizes are announced for the first 25 to 50 or 100 entries. 55.50 off on Gillette Sensor excel. Sales promotion is one level or type of marketing aimed either at the consumer or at the distribution channel (in the form of sales-incentives). Depending on the objectives, refund offers are used to encourage trial of a new product, purchase of increased quantity, or increasing the frequency of purchase, or to encourage the customers to purchase those products whose purchases can be postponed, such as refrigerators, microwave ovens, air-conditioners, and other consumer durable products. In these situations the refund offer is being used to encourage trial at no risk to the customer. Infomercials SALES PROMOTION 1. The motivation to purchase and continue purchasing the product gets shifted to the incentive of premium as the purchase situation is one of total low-involvement as far as the product category is concerned. The coupons may be mailed or enclosed along with other products, or inserted in a magazine or newspaper advertisement. Such discounts may appear in newspapers, magazines, and television advertisements. Where multiple purchases are involved as proof of purchase, generally the usual inter-purchase interval is more, and consumers are more likely to stay with the brand. 7. For example, Kellogg’s Choices packs contained small plastic toys like different types of dinosaur replicas or sometimes, a plastic lunch box. It is also called pull strategy. 2. Consumer sweepstakes; 9. When the product is good but the brand share is low, a refund seems to work very well. Image Guidelines 5. Free-in-mail premiums are unique because the promotion objectives may be quite different. It is termed as banded pack offer when two or more units of a product are sold at a reduced price compared to the regular price (couple of months ago, Lux International offered a similar deal. Producers may distribute a free gift along with their product as a incentive to the consumers for purchasing the product. A well-known television programme in India, “Surabhi”, is an example of this type of promotion. Generally correct entries, running in thousands, are received. The winners are decided in two stages. This appears to build brand loyalty rather than diminish it. All tools of sales promotion are fairly simple and can be reduce to twelve in number. Starting from such low-priced product as “Pan Masala” or expensive products such as cars, and almost everything in between, including sporting events, use contests and sweepstakes. Free samples are normally provided during the introductory stage of the product. Effective sales promotion tools are tailored to presentations at events or trade shows, door-to-door sales, retail sales, direct mail advertising, telemarketing or Internet-based marketing. Promotion for industrial customers – These promotions are used for such purposes as generating business leads, stimulating purchase, rewarding customers, and motivating sales people. Creating an effective sales promotion campaign requires that you begin with a marketing plan to establish your product or brand’s market segments, - Consumer Promotions, Contest Rules, Coupons, loyalty programs, product sampling, Rebate Offer, Rules, sales promotion, Sampling, Sweepstakes, Sweepstakes Rules, Tools This is useful for drawing attention to product improvement. The promotion planning shows how effective the sweepstakes can be in increasing the sales, and block competition. Buy back allowances Contests and sweepstakes generate considerable interest and awareness, and can be used to gain large sales increases. In this case, the customer exchanges the old product for a new one. Consumer-oriented Promotion Tools B. Trade-oriented Sales Promotion. 50 and the quantity contained in the pack is 100 gms. Coupons 1. The focus of advertising to create reason for purchase the focus of promotion is to create an incentive to buy. Sales promotion is generally defined as those marketing activities that provide extra values or incentives to the sales force, the distributors, or the ultimate consumer and can stimulate immediate sales. 1. The dealers may be given information of the company’s performance, future plans, and so on. Scratch and Win Offer 11. Selecting Promotional Tools A marketer must do the following while planning and sending communications to a target audience: Identify the Audience Individuals, groups, special publics or the general public. This means a refund is repayment of total money paid for purchase, while the rebate represents repayment of only of part of the money paid for purchase. Every imaginable prize or reward is used to excite and attract customers to participate. Point of Purchase Displays (POP Display): Here, the display material of a product or brand is placed close to the point of sale inside retail stores. 1. Prohibited Content 3. Whenever the store-traffic increases, customers visiting the store not only buy promoted product, but some of them buy other products as well. For example- a 15 to 60 percent off on clothes before some festive season in retail shops are examples of sales or sales promotion. If there are three different models of a product and because of the discount offer the price of the higher end model appears not too high to the consumer, compared to the lesser- priced model, then consumer may buy the higher end model. Definition: The Promotion Mix refers to the blend of several promotional tools used by the business to create, maintain and increase the demand for goods and services. The customer has to send back the product within a specified period of time. Displays, trade fairs, exhibitions, and event sponsorship. There are occasions when the company decides to move in new geographic markets, such refund promotion may prove to be quite effective in motivating high-risk perceivers to decide in favour of the promoted product as the perceived risk is likely to appear as manageable. A premium (gift) is a reward given to the consumer for performing a particular act, generally purchasing a product or service. Consumers kept on buying the same brand and collected many coupons, most not winning anything because in most cases the coupons had the same or different letters, not fit to complete the desired word. On returning the empty pack, the customer gets Rs. stimulate consumer buying behavior towards purchasing any product. Conventions displaying their wares to large audiences at relatively low cost. Of course, the discounts may differ across product categories. For instance, the Hawkins pressure cooker manufacturer announced an attractive price reduction, up to Rs.150 off, on a new Hawkins in exchange for any old pressure cooker. “A sweepstakes does not call for the application of skill on the part of the consumer. TOS4. This dampens the competition for a while. Many offers of this type are seen in consumer non-durable products consumed on daily basis. Product and service promotion is the most common form of marketing. For instance. The prizes were around 8000, the top prize being rupees ten million. 1. Here the focus is more on the wholesalers and retailers as compared to the consumers, i.e. Samples – Small quantity, sometimes free of cost or sometimes at minimum price, sent door to door personally or through mails or with other products etc. From company’s point of view, shelf space is so important that if it is provided by the wholesaler or retailer to a particular product or company the consumer will buy it. However, both these terms are used interchangeably in the real world of marketing. The two types of sales promotion tools consumer are as follows: A. a. In-Pack, On-Pack, and Container Premiums: These various terms for premiums are primarily used to distinguish the difference in methods of rewarding the consumers. (c) Consumers use coupons for products which are consumed regularly, such as tea, coffee, laundry products, etc. For instance, a famous sports personality may be hired to provide autographs to customers visiting a sports shop. HubSpot CRM is free for contacts up to 1,000,000. In most cases a combination of two or more techniques will combine the strengths and compensate for the weaknesses and will produce better results compared to either technique used alone. b. This activity aims at attracting consumers to other or newer brands, seasonal and unseasonal goods. Consumer promotions are incentives aimed toward a company’s customers. For instance, in case the manufacturer plans to distribute free samples of a product, it can cost far more than the total money spent by the manufacturer for the prizes. For that, company provides extra commission, buy back guarantee, price offs, allowances, gifts, free goods to them. Almost all promotions make use of one or more of these tools, alone or in some carefully developed combination. The premium is likely to offer a reason and an incentive to buy the product. 4. The elements are: 1. Personal Selling 3. 5. Free Services 8. When coupons are offered by the manufacturer all the costs associated with advertising and distributing the coupons, redeeming their face values, and paying retailers a fee for handling, are borne by the manufacturer. Cheap Bargain – To get another product at a very cheap rate while buying a product; e.g., A bucket of plastic of 5 litres only at Rs.6 with every pack of ‘SURF’ of 1 kg. Refunds and Rebate – An offer by manufacturer to give back certain amount of money to consumer. Publicity 5. Price-Off Offer 4. The consumers were offered the facility of paying the balance in 24 equal monthly installments. The two types of sales promotion tools consumer are as follows: A. Loyalty Incentives PUBLIC RELATIONS – How to use the media 1. These are all different approaches to offer immediate reward to the consumer at the time of purchase. Some of them offer a free trial period, and in case the customer is not satisfied, there would be total refund or money and no questions asked. 2. It refers to reduction in price on a particular item during a particular period. The first difference is Personal Selling is an element of promotional mix, where salesman visits the customer and displays the goods in order to initiate purchase. The offer consisted of Philips TV, two-in-one, iron, mixer-grinder, and rice cooker at an attractive price. 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