Page 166 - DMGT507_SALES AND PROMOTIONS MANAGEMENT

Sales and Promotions Management

Notes straight price-cut or added value. 'Interest promotions' may or may not require the purchase of
anything such as free samples, free premiums, contests, and sweepstakes. The objective of such
promotions is to stimulate consumer interest in products, services, activities, and special events.
"Consumer franchise-building" promotions are those which reinforce consumer brand preference
and include a product-related selling message, such as in case of free premiums, free samples,
coupons and patronage awards. "Non-franchise building" promotions include price discounts,
price-packs, premiums not related to the purchased product, contests and sweepstakes, and ad
refund offers. Some commonly used consumer promotions are briefly discussed:
Price Discount (also called cents-off): The customers pay a certain amount less than the regular
price of the product or service if purchased within a specified period. This can yield short-term
sales increase, can serve as an incentive to try a new product, and can also help product sales
during off-season.
Bonus-Pack: An additional quantity of the purchased product is offered free with standard pack.
The producer may develop special larger-sized pack containing more product quantity but the
price is proportionately low. A variation of this offer is "buy two, take one free." These offers are
generally limited to low-bulk items or ready-to-wear dresses, and sometimes footwear. There
are stray cases when a buyer would get a 14-inch TV free with the purchase of a 21-inch TV.
Samples: It is an offer of some amount of product or service free or at a very nominal price. One
major concern of the marketer is to put the product in the consumer's hand, which often is the
key to success in many product categories and some services. The main objective of sampling is
to induce initial product trial and let the consumer have the first hand experience with the
product or service. Sampling is probably the most successful approach when the product is new,
is not a market leader to induce trial.
Premiums: A premium (gift) is a reward given to the consumer for performing a particular act,
generally purchasing a product or service. The premium may be free or available to the consumer
by paying a price well below the regular market price. Getting a printer free with the purchase
of a computer, or getting a Swiss knife well below the market price when the consumer purchases
a microwave oven, are typical examples of premium.
Refund or Rebate (the terms are used interchangeably): Rebate offer, refers to some amount of
money repaid to customers sometime after the purchase when a customer submits the specified
proof-of-purchase to manufacturer. The manufacturer "refunds" part of the price paid by the
customer via mail.
Frequent-User Reward: These are incentives to reward those, who frequently purchase the product
or service, such as frequent-flier incentives to air passengers. The purpose is to encourage repeat
purchases or repeated visits to a particular retail store. Locality grocery or general stores use
this approach on an ongoing basis for their regular customers to encourage store loyalty. Usually
such programmes cover a fairly long period to offer customers ample opportunity to respond
favourably.

Coupons: Coupons can be viewed as certificates offered by manufacturers or retailers that
entitle the owner to some stated savings or claim on the specified thing. Coupons bear a date of
expiry and cannot be redeemed after that date. Coupon is a versatile tool and can be used to
accomplish many different sales promotion objectives.
Consumer Contests, Sweepstakes, and Games: These promotions often generate considerable
interest, excitement, and enthusiasm among consumers. Individuals compete based on their
analytical or creative abilities. The participants can win cash, jewelry, trips, or some merchandise.
A panel of judges examines the contest entries and the best one or more entries are declared as
winners. In a sweepstakes, participating consumers' names are put in a draw. A game offers

160 LOVELY PROFESSIONAL UNIVERSITY