Sales Promotion is one of the elements of the promotional mix Sales promotion uses both media and non-media marketing communications for a. Who doesn't love a good deal? Ramp up your sales with the help of a sales promotion. Check out these 26 examples of sales promotions for inspiration. Successful companies know that sales promotions are among the most effective methods of increasing sales and building customer satisfaction.
& Sales Promotions
In the open markets of old and farmers markets of today , sellers did and do this by shouting, joking with customers, and sometimes by holding up a squealing piglet for everyone to see. Priya Raghubir and his coauthors, writing in California Management Review , identify "three faces" of consumer promotions: Information may take the form of advertising the availability of something, incentives are offered in the form of discounts, and emotional appeals are made by displays and, of course, by the low price itself.
Precisely because sales promotions must provide incentives —whether to the distribution channel, the company's own sales people, or to the consumer—they cost money by definition and must produce additional volume to pay for the expenditures.
A grand sale that clears out the inventory but, with added advertising costs factored in, reduces margin too is—a failure. Sales promotions therefore must be carefully calibrated to achieve the purpose. Holding promotions too frequently will habituate customers to buy only when promotions are in effect. Avoiding promotions altogether will let competitors draw customers away. Craig Endicott and Kenneth Wylie, writing for Advertising Age in the magazine's 62nd annual Agency Report, indicate a continued shift of revenues in advertising from traditional to new forms of media.
They label the new forms as "marketing services" and comment as follows: Consumer sales promotions are steered toward the ultimate product users—typically individual shoppers in the local market—but the same techniques can be used to promote products sold by one business to another, such as computer systems, cleaning supplies, and machinery.
In contrast, trade sales promotions target resellers—wholesalers and retailers—who carry the marketer's product. Following are some of the key techniques used in consumer-oriented sales promotions. A consumer price deal saves the buyer money when a product is purchased. The main types of price deals include discounts, bonus pack deals, refunds or rebates, and coupons.
Price deals are usually intended to encourage trial use of a new product or line extension, to recruit new buyers for a mature product, or to convince existing customers to increase their purchases, accelerate their use, or purchase multiple units.
Price deals work most effectively when price is the consumer's foremost criterion or when brand loyalty is low. Buyers may learn about price discounts either at the point of sale or through advertising.
At the point of sale, price reductions may be posted on the package, on signs near the product, or in storefront windows. Many types of advertisements can be used to notify consumers of upcoming discounts, including fliers and newspaper and television ads. Price discounts are especially common in the food industry, where local supermarkets run weekly specials. Price discounts may be initiated by the manufacturer, the retailer, or the distributor.
For instance, a manufacturer may "pre-price" a product and then convince the retailer to participate in this short-term discount through extra incentives. For price reduction strategies to be effective, they must have the support of all distributors in the channel. Existing customers perceive discounts as rewards and often respond by buying in larger quantities. Price discounts alone, however, usually do not induce first-time buyers. Another type of price deal is the bonus pack or banded pack.
When a bonus pack is offered, an extra amount of the product is free when a standard size of the product is bought at the regular price. This technique is routinely used in the marketing of cleaning products, food, and health and beauty aids to introduce a new or larger size.
A bonus pack rewards present users but may have little appeal to users of competitive brands. A banded pack offer is when two or more units of a product are sold at a reduction of the regular single-unit price. Sometimes the products are physically banded together, such as in toothbrush and toothpaste offers. A refund or rebate promotion is an offer by a marketer to return a certain amount of money when the product is purchased alone or in combination with other products.
Refunds aim to increase the quantity or frequency of purchase, to encourage customers to "load up" on the product. This strategy dampens competition by temporarily taking consumers out of the market, stimulates the purchase of postponable goods such as major appliances, and creates on-shelf excitement by encouraging special displays.
Refunds and rebates are generally viewed as a reward for purchase, and they appear to build brand loyalty rather than diminish it. Coupons are legal certificates offered by manufacturers and retailers. They grant specified savings on selected products when presented for redemption at the point of purchase.
Manufacturers sustain the cost of advertising and distributing their coupons, redeeming their face values, and paying retailers a handling fee. Retailers who offer double or triple the amount of the coupon shoulder the extra cost. Retailers who offer their own coupons incur the total cost, including paying the face value. In this way, retail coupons are equivalent to a cents-off deal.
Manufacturers disseminate coupons in many ways. They may be delivered directly by mail, dropped door to door, or distributed through a central location such as a shopping mall. Coupons may also be distributed through the media—magazines, newspapers, Sunday supplements, or free-standing inserts FSI in newspapers.
Coupons can be inserted into, attached to, or printed on a package, or they may be distributed by a retailer who uses them to generate store traffic or to tie in with a manufacturer's promotional tactic.
Retailer-sponsored coupons are typically distributed through print advertising or at the point of sale. Sometimes, though, specialty retailers or newly opened retailers will distribute coupons door to door or through direct mail. The main difference between contests and sweepstakes is that contests require entrants to perform a task or demonstrate a skill that is judged in order to be deemed a winner, while sweepstakes involve a random drawing or chance contest that may or may not have an entry requirement.
At one time, contests were more commonly used as sales promotions, mostly due to legal restrictions on gambling that many marketers feared might apply to sweepstakes. But the use of sweepstakes as a promotional tactic has grown dramatically in recent decades, partly because of legal changes and partly because of their lower cost.
Furthermore, participation in contests is very low compared to sweepstakes, since they require some sort of skill or ability. Special events marketing offers a number of advantages.
First, events tend to attract a homogeneous audience that is very appreciative of the sponsors. Therefore, if a product fits well with the event and its audience, the impact of the sales promotion will be high. Consider the ongoing costs of the promotion in relation to its benefit to your business when deciding if it's a smart idea to continue in that direction.
Ask questions of customers who visit or call your small business because of the promotion. Besides learning how they heard about your company or product, ask what has prevented the customer from trying the product in the past. This information will help you decide if it's worthwhile to extend the promotion or revive it every year. Gather contact information from each customer who takes advantage of the sales promotion if possible, such as an email address or phone number, so that you can contact the buyer later to ask what the person thought of the product or service.
Find out how willing the customer is to purchase the item again in the future. Louise Balle has been writing Web articles since , covering everything from business promotion to topics on beauty. Her work can be found on various websites. She has a small-business background and experience as a layout and graphics designer for Web and book projects.
Skip to main content. Conducting Effective Test Marketing. Sales promotion has a tactical, rather than strategic role in marketing communications and brand strategy, it is also a form of advertisement used within a short period of time. Researchers Farhangmehr and Brito, reviewed the definitions of sales promotions in marketing texts and journals and identified a set of common characteristics of sales promotion, including: Both manufacturers and retailers make extensive use of sales promotions.
Retailer-sponsored sales promotions are directed at consumers. Manufacturers use two types of sales promotion, namely: Consumer sales promotions are short term techniques designed to achieve short term objectives, such as to stimulate a purchase, encourage store traffic or simply to build excitement for a product or brand.
Traditional sales promotions techniques include:. New technologies have provided a range of new opportunities for sales promotions. Loyalty cards, personal shopping assistants, electronic shelf labels, and electronic advertising displays allow for more personalised communications and more targeted information at the point of purchase.
For example, shoppers may receive alerts for special offers when they approach a product in a specific aisle. There are different types of discounts available online versus in the stores. Coupons are present at the shelf where the product is available. Coupons are available online. Consumers print them out and take them to the store. Although discounts can be found online and in stores, there is a different thought process when shopping in each location. Trade discounts also called functional discounts: These are payments to distribution channel members for performing some function.
Retailers have a stock number of retail 'mechanics' that they regularly roll out or rotate for new marketing initiatives. Many discounts are designed to give consumers the perception of saving money when buying products, but not all discounted prices are viewed as favorable to buyers. Therefore, before making a purchase, consumers may weigh their options as either a gain or a loss to avoid the risk of losing money on a purchase.
Product manufactures want to promote and encourage this instant purchase impulse in consumers. Buyers can be very quick to make purchases without thinking about the consequences when a product is perceived to be a good deal.
Many consumers read left-to-right, and therefore, compare prices in the same manner.
What sales promotion techniques are top retailers doing on their online stores? This list compiles the best ideas you need to be doing in We've put together a list of 10 popular sales promos to help steer you in the right direction when it comes to promotions for your online store. This is a post by Alexandra Sheehan. These days, it seems like every retailer is running some sort of sales promotion. 25% off, $5 off a.