Sales Promotions directed at the end-user are called Consumer sales promotion techniques. These promotions are based on ‘pull strategy’. These consumer promotions may be used for durable as well as nondurable goods. These sales promotions may prove effective when combined with advertising.
Customers buying Sony Plasma TVs are offered a “red letter” day out. The “red letter” days accompanying the 48 inches, 65 inches, and 108 inch TVs include a choice of activities from sailing and paragliding to powerboating and stock car racing.
Consumer Sales Promotion Techniques
Following are the most powerful Consumers Sales Promotion Techniques:
1. Free Samples
This is generally the most powerful form of promotion for ‘new products’, the immediate aim being to obtain ‘trial’ by users.
It means the offer of a free product or service delivered door to door, sent in the mail, attached to another product, or featured in an advertising offer.
This sales technique is applied generally for cheaper goods. If the product proves good to the customer then he tries for the product and on satisfaction becomes a regular user. 13 Powerful Middleman Sales Promotion Techniques (Explain).
When the product is new or is not a market leader in its category, sampling often proves to be a successful strategy to induce trial. Ponds introduced a skincare cream and offered a smaller, low priced pack as a “sample pack.” Products that cannot be explained fully through advertising and need consumer’s subjective evaluation, may do well by providing free samples.
Pharmaceutical companies distribute samples of new products to medical shops as an ongoing strategy. Marketers adopt different methods to distribute samples. If the product is small and thin, it can be distributed with magazines.
Many new newspapers and magazines use this method to introduce prospects with their publication.
The sample may be sent directly to the prospect through mail or distributed through retail stores.
Free samples can work only with products that are frequently purchased and have broad-based appeal. Sample distribution always faces the problem of theft and pilferage.
Trade fairs and exhibitions provide good opportunity to distribute samples to interact with visitors.
A coupon or a premium offer in a print advertisement increases the attention of customers towards the product.
2. Price Reductions
This method is used to motivate customers to purchase new products. This scheme is used for the short-term generally at the time of festivals.
Sony, Samsung, Xiaomi, Apple, etc. use this technique at the time of Diwali and on Independence Day.
Hawking pressure cookers have come up with several sales promotion schemes during the last few years. Reduction/refund and rebate mean the same thing. It is an offer of money, which is part of the price paid by the customer. This method can be used to attract new customers as well as retain present customers.
Such promotions work very well in gaining the attention of consumers, particularly at the point of purchase (POP) among similar brands and may also boost impulse buying. Such discounts offer immediate value and hence produce stronger consumer response.
These discounts can lead to accelerated purchases because they are for a limited period.
Price reduction, coupled with a display, arouses attention and its effect on consumer decision making can be significant.
But discount offer may lose its advantage if competitors announce a similar offer. When the discount is withdrawn, the sales may fall below the level of Pre promotion period and sales would return to the pre-promotion period level.
This technique is used by all prestigious organization. But sometimes these reductions schemes are launched after the increase at prices. This adversely affects its impact on sales.
3. Trading Stamps
Under this method, the buyer is provided a stamp with each purchase. Buyer stores these tickets and after collection of a specified number of tickets buyers can get some product against these stamps.
Every customer who buys products worth of some specified sum is given one Stamp.
On saving a specified number of Stamps, the customer can redeem for the prizes offered in this program.
This method is used by large retailers and companies. Such stamps are attached to the quantity of purchase. 7 Powerful SalesForce Promotion Techniques (With Examples).
Coupons are certificates that offer price reductions to consumers for specified items. It is a certificate entitling the barrier to a stated saving on the purchase of a specific product.
Coupons bearer to a stated saving on the purchase of a specified product. Coupons bear a date of expiry and cannot be redeemed after the cut off date.
When coupons are offered by the manufacturer, all the costs associated with advertising and distributing the coupons, and redeeming their face values are borne by the manufacturer.
When retailers offer coupons they have to bear all the above-mentioned costs themselves.
Coupons offered by the manufacturers are redeemable at any retail shop that carries the promoted product.
The retailer serves as the Agent of the manufacturer in accepting the redeeming the coupons and send the collected coupons to the concerned manufacturer along with their claims of reimbursement.
Coupons generally attract older, better educated, urban, middle-income families. Coupons are distributed by manufacturers by using print media, and direct mail, product packages or through retailers.
Coupons are included in ads appearing in newspapers, magazines, “freestanding” FSI, etc. A ‘freestanding insert’ is a leaflet inserted in a newspaper.
Newspaper distributed coupons cost much less to the marketeer. Newspaper coupons offer flexibility in terms of size, shape, location, and timing of distribution.
Product distributed coupons are delivered with the product that can be “In pack“, or “on-pack“.
In pack, coupons are inserted within the product package whereas an on-pack coupon is attached to the outside of the product.
In pack or on-pack coupons does not involves extra distribution costs. They are useful for introducing a new product as well as for strengthening the sale of an existing product. 15 Main Advantages and Disadvantages of Sales Promotion (Explained).
Each type of coupon, irrespective of its face value or a tool of sales promotion is growing.
Coupons are used both by retailers and manufacturers and are also distributed by mail or door to door.
Coupons are used to encourage product trials to reward customer loyalty or to encourage continued usage.
Coupons are also used to achieve long term promotion objectives by increasing repeat purchases and to defend in the competition.
Coupons serve many objectives like:
- Encourage repeat purchases.
- Encourage brand switching.
- Defend market.
- Supplement advertising.
- Stimulate the trial of the product.
Nowadays coupons are used to reach a large number of prospects. Coupons may weaken the negative effects of the price increase.
Coupons motivate price-sensitive consumers for buying. Many types of research have indicated that advertisements in print media incorporating coupons are more likely to be noticed.
5. Premiums (gifts)
A premium (gift) is a reward given to the customer for purchasing a product. Premiums are offered at low cost or free.
A with pack premium accompanies the product inside or on the package whereas a self-liquidating premium is sold below its normal retail price to consumers who request it.
Getting a printer free with the purchase of a computer or getting a bar of detergent-free with the purchase of three cakes of toilet soap are examples premiums.
Kellogg’s Chocos packs contain small plastic toys and computer magazines often include a compact disc with each issue.
Premiums may be direct or indirect. Direct premiums are used to reward the customers immediately at the time of purchase and mail premiums require the customers to take some action such as mailing the proof of multiple purchases to the marketeers.
In Pack Premium
Premiums are generally small and low priced such as a toy, Steel glass or bowl.
These are often used by manufacturers of ready to eat cereals and beauty aid products.
On pack Premiums
Premiums are related to the product, such as a toothbrush with toothpaste, blades with the razor, a compact disc with the computer.
In Container Premium
Premiums the product is packed inside a container, which can be used for some other purpose.
In a self-liquidating premium, the consumer is usually asked to pay a specified amount to liquidate offset a part or full cost of the premium article or the scheme administered cost.
Bournvita is offered in an attractive glass mug, Nescafe is available in a good looking crystals jars. Premiums are likely to be more useful if the target group is children.
Premium selection is important for the effectiveness of this method. Premium should communicate its good quality and value and it should be based on pre-testing in some way.
Self-liquidating premiums can be perceived as a reward by present users and can help in building brand loyalty.
But in case the consumer response to promotion is not enthusiastic and The Redemption rate is low, then this is not so effective.
6. Fairs and Exhibitions
Trade Fairs and exhibitions are extensively used sales promotion tools in markets.
These are organized at local, national and international levels. Fairs and exhibitions provide the opportunity of introducing and displaying the products and company products and brings the company’s products and consumers in direct contact with each other.
These fairs are organized at historical or religious places. Many industrial exhibitions organized with the help of the government.
Trade fair is the most effective sales promotion tool in the case of high-cost industrial products.
7. Money Refund Orders
It is a scheme in which customers are promised to get a refund of money on submission of the purchase certificate of the product. Sony Bravia TV set under a money-back scheme is an example of it.
A refund is repayment of the total to money paid for the purchase, while the rebate represents repayment of only part of the money paid for the purchase. It is an offer by a marketer to give back a certain amount of money after the purchase.
The offer may be used for a product purchased alone or in combination with other products.
Refunds offers are used to encourage the trial of a new product, purchase of increased quantity or increasing the frequency of purchase.
Refund offers seems to work very well in guaranteeing the trial of a product or service.
Consumers generally perceive refund offers as rewards and due to it brand loyalty increases.
Refund offers are fairly common. Refund orders are very much used in products such as exercise equipment, mixer, and juicers, hairdryers, ceiling fans, printers, and magazines,
Reader’s Digest regularly uses this offer. Refunds are quite effective in competitive situations where consumers perceive little or no differentiation among brands.
Some refunds are associated with only one purchase while others may require multiple purchases.
8. Consumer Services
This method is also known as consumer education. These services may be pr sale or after-sale services.
In pre-sale services labels, literature, home magazines are used by the companies.
Blue star provides technical guidance at the time of selling Air Conditioners.
9. Contest and Sweepstakes
Contests of various kinds constitute another widely and commonly used sales promotion tool. According to the American Association of advertising agencies, “A contest is an event that invites the customer to apply the skill to solve or complete a special problem.
Whereas, a sweepstake does not call for the application of skill on the part of the consumer. In winners are determined by a drawing from all entry forms. So in the sweepstake, prizes are awarded on the basis of chance.”
Generally, a combination of contests and sweepstakes is used. The winners are decided in two stages. The first part involves an entry by customers and the use of skill, or knowledge.
If more correct entries are received, the second stage then involves a draw of the chance to decide the winners. Contests and Sweepstakes are probably the most exciting among all the sales promotional devices.
Although the success of a contest or sweepstakes depends largely on the selection of prizes.
The duration of contests and sweepstakes varies considerably, depending on the objectives.
Contests and sweepstakes can create a high level of awareness and build the image of the product or service but these are not effective in generating trial of a new product.
Consumer contests wide publicity to attract the participation of a widely scattered consumer base.
To succeed the contest must be simple to operate from the part of the customer.
If the procedure is difficult and time-consuming then customers will not participate in it.
The amount of publicity given to contests is also important to factor for the success of contests. If organized well these may increase as well as block competition.
10. Point of Purchase Displays
It is also referred to as the point of sales promotion. Shelf space has become important in the age of brand competition. The need to remain on top of the consumer’s mind has become the prime concern of marketers.
Displays are used to maximize product exposure. Enhance product appearance and stimulate consumer interest. The displays are of two types of’ right-brain‘ display and the ‘left brain‘ display.
The right brain is associated with creativity, Intuition and non-verbal communication and the left brain display is associated with logic, order, and language and appeals to the left side of our brain. Colour, lightening, and composition are important elements of display.
The display should consist of ‘I’ viz impact, identifications, information and imagery qualities.
Display must have an immediate impact on the customer, and it should be bold and clear which can be easily identified by the customers.
It should preside meaningful information to the consumer and must impress customers about the product. In-display proper lightning and colors are to be used to make it more effective.
These attract customers to notice the product.
Displays may be categorized as:
- Unit displays, which are displayed as one unit and identical in color, shape, and size.
- Assortment displays, in which a variety of products are put on display. These are common in large stores and Generally used jewelry stores, watch showrooms.
- These displays are used around theme Diwali, Christmas, and New Year.
- Lifestyle displays are used to attract a particular class of customers.
- Rack displays are generally used by retailers of readymade garments.
11. Free Trials
In this method, prospective purchasers are invited to try the product without any cost.
This technique is very much used by the automobile industry. They invite customers for a test drive of their new models.
BMW Industries using this technique effectively. This facilitates the customers in operating the products.
Catalogs give complete information relating to Products, their pictures, size specifications, colors, packing, uses, and prices.
This helps customers to make the decision about products. Catalog work effectively in case of semi-durable goods.
Customers can competitive products on the basis of these and can take the decision.
13. Product Demonstrations
In this method, the products and their operations are demonstrated to the prospective customers.
This may help these prospects to satisfy these queries.
In the demonstration method of sales, promotion is used for low unit price products like beverages and washing powders as well as high unit price products like washing machines and personal computers.
Sometimes, demonstrations are organized at retail stores. Consumer product companies quite often Resort to the house to house demonstration.
Sometimes the products are also demonstrated at fairs and exhibitions.
14. Product Warranties
Under this strategy explicit or implied promises are made by sellers that the product will perform as specified otherwise manufacturer will replace the product in case of the manufacturing defect or repair it in case of functional defect during a specified period.
These warranties assure customers about the functioning of the product.
15. Specialty Advertising
Specialty advertising refers to a product imprinting with, or otherwise carrying, a logo or promotional message.
It is also known as a promotional product. Sales promotion technique that places advertisers’ names, addresses, and Advertising messages on useful articles that are then distributed to target markets.
Several products designed to increase goodwill and exposure, such as custom printed keychains, calendars, calculators and multifunction toolkits are distributed in the target group.
Roadshows attract the attention of the prospects towards a particular product or service.
It has been successfully used by the tourist companies to attract foreign tourists for “places on wheels”.
Due to this technique, the place on wheels has booked. Many country organizations are organized Roadshows in other countries for tourism.
17. Exchange Offers
As competition intensifies among manufactures, they consider new promotional schemes to sell their products to those who already own less sophisticated old models.
In some countries, people have a culture of repair instant of Replacement. This prevents the customers to replace old products/goods.
No one in the country is prepared to throw products such as televisions, microwave ovens, and washing machines.
So, exchange offers to motivate these types of customers to go for exchanging these old products with new advanced models.
Manufacturers of home appliances, two-wheelers, smartphones, and cars. Manufacturers use this scheme to replace old models.
Thus, now you know the Consumer sales promotion techniques.