What Are The Promotional Strategies In Marketing – Sales promotions are activities that complement a company’s advertising, public relations, and professional selling efforts. They create an incentive for consumers to buy products faster and make larger purchases. Sales promotions are often temporary, but when the economy weakens, sales promotions become more popular with consumers and are used more frequently by organizations.
Samples, coupons, rewards, contests, and discounts are examples of consumer sales incentives. Do you like free samples? Most people do. A free sample allows customers to try a small amount of the product in hopes of purchasing the product. Strategy encourages experience and creates awareness. Perhaps you purchased a product that included a small free sample—for example, a small amount of conditioner packaged with shampoo. Have you ever been to a store that offers free samples of different food products? Although sampling is an expensive strategy, it is generally very effective for food products. People try the product and the person providing the sample tells them about the product and tells them a certain price.
What Are The Promotional Strategies In Marketing
Many retail grocery stores offer coupons to customers with samples. Coupons provide an immediate reduction in product price. The coupon amount is then paid by the manufacturer to the retailer. The retailer charges a service fee for accepting the coupon. When the economy is weak, more consumers clip coupons and look for special offers like double coupons and buy-one-get-one (BOGO) coupons. They can also buy more store brands.
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While many consumers clip coupons from Sunday newspaper inserts, other consumers find coupons online or on their cell phones. Point-of-purchase displays, which include coupon machines placed next to products in stores, encourage consumers to purchase a brand or product immediately. When a consumer sees a special display or can immediately redeem a coupon, manufacturers hope that the sales promotion will increase sales. Stores may also offer coupons to encourage loyalty card customers to choose specific brands and products.
Mobile marketing and the Internet allow consumers to take advantage of coupons and other promotions in international markets. Most coupons in India are digital, while paper coupons make up the largest share in the United States. More than 80 percent of diapers are purchased with coupons. Imagine how convenient and less wasteful digital coupons scanned from a mobile phone are for both organizations and consumers.
Other sales promotions can be done online and include incentives such as free products, free shipping, coupons, and sweepstakes. For example, many online merchants such as Shoe Station and Zappos offer free shipping and free returns to encourage customers to shop online. Some firms have found that the response to their online sales promotions is better than the response to traditional sales promotions.
Another very popular sales promotion for consumers is premium. A reward is something you get with proof of purchase (a sales receipt or part of a package) for free or a small shipping and handling fee. Remember wanting your favorite cereal because there was a toy in the box? An example of a toy premium. Sometimes you may need to mail in a certain amount of proof of purchase to claim your reward. Premiums are designed to encourage you to buy the product multiple times. Many people don’t realize that when they pay shipping and handling fees, they also pay a premium.
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Contests or lotteries also attract many people. Contests are sales promotions where people enter or enter for a chance to win prizes. The Publisher’s Clearing House sweepstakes and the Monopoly game at McDonald’s are both examples. The organization running the sweepstakes or contest hopes that you’ll not only enter the contest, but that you’ll buy some magazines (or more food) when you do.
Fantanas are back! Watch the video for the contest organized by Fanta Soft Drinks. As with other sales promotion tools, the idea is to get you to buy the product, and especially to make a repeat purchase.
Loyalty programs are sales promotions designed to get repeat business. Loyalty programs include frequent flyer programs, hotel programs, and shopping cards for grocery stores, pharmacies, and restaurants. Sometimes point systems are used in conjunction with loyalty programs. Once you accumulate enough miles or points, the organization may offer you special benefits, such as a free flight, a free hotel room, or a free sandwich. Many loyalty programs, especially hotels and airlines, have partners to give customers more ways to collect and use miles and points.
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Discounts are popular among consumers and manufacturers who provide them. When you receive a rebate, you will be reimbursed for part (or all) of the product purchase price after you fill out the form and send it to the manufacturer with proof of purchase. The trick is to do the paperwork on time. While different types of sales promotions work best for different organizations, rebates are especially beneficial for companies because many customers forget to submit their rebate forms or wait too long. As a result, they will not receive any refund. Customers love the discount until they forget to send it back.
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In business-to-business (B2B) marketing, sales promotions are often called sales promotions because they target channel members who do business with or “trade” with consumers. Trade promotions include trade shows, conventions, event marketing, trade concessions, training, and special incentives given to retailers to sell special products and services, such as additional cash back, in-store displays, and giveaways. takes
Trade shows are one of the most common types of sales promotion in B2B markets. A trade show is an event where firms in a particular industry showcase and demonstrate their offerings to other organizations in the hope that they will buy them. There are usually many different trade shows that an organization can participate in. Using exhibits, brochures, and other materials, trade show representatives can identify potential buyers (prospects), inform customers about new and existing products, and show them products and materials. Reps can also get feedback from prospects about their company’s products and content, and possibly competitors.
Companies also gather competitive information at trade shows because they can see what products other firms are exhibiting and how they are selling them. While approximately 75% of trade show attendees buy a product they see, 93% of attendees are influenced by what they see at trade shows. However, only 20% of organizations follow up on offers reached at trade shows, and only 17% of buyers are called after expressing interest in a particular company’s products (Tanner and Patta, 2009). Figure 11.13 shows an example of a trade show booth featuring the Korean electronics firm Samsung. Trade shows can be very successful, although companies that attend them should follow up on the leads generated at the shows. As technology changes, webinars are being used to reach businesses that cannot attend trade shows. Follow-up after the webinar is also important.
Conventions or meetings with professional groups also provide salespeople with a way to showcase a variety of products to potential customers. For example, a medical conference may be a good opportunity to demonstrate a new type of medical device. Sales representatives and managers often attend conventions to sell their products.
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Intuitive Surgical is the creator of the Da Vinci robot, a new type of technology used to make surgeries easier and less invasive. Intuitive Surgical often exhibits robots at surgical conferences.
Sales contests are often held by manufacturers or retailers to encourage retailers to increase sales. Often, competitors focus on selling high-margin or slow-moving products. The sales representative who sells the most products wins a prize, such as a free vacation, company recognition, or cash.
Trade incentives provide various incentives to channel partners, such as the manufacturer’s wholesalers, distributors, retailers, etc., to promote the product. One type of sales allowance is an advertising fee (amount) given to advertise the seller’s product in local newspapers. The advertising fee benefits both the manufacturer and the seller. Typically, the retailer can charge a lower rate than the manufacturer for advertising in local outlets, saving the manufacturer money. The retailer benefits by getting a rebate from the manufacturer.
Another sales incentive offered by manufacturers, such as appliance or high-tech industries, is training to help their salespeople understand how the manufacturer’s products work and how to persuade customers to buy them. Many manufacturers offer in-store product demonstrations to show partner customers how the products work and answer any questions they may have. Demonstrations of new video game systems and computers are very popular and successful in generating sales.
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Free products, such as an appliance, television, or other product made by a manufacturer, can also be used by retailers to sell products to consumers. In other words, a television manufacturer may offer a television to a manager of a retail electronics store.