Different strategies of Consumer Sales Promotion

Consumer sales promotion

It tries to inform, educate and stimulate ultimate consumers

  • Samples – Free samples or free services are provided to consumers to introduce a new product or service or to expand the market for an existing product. It can be undertaken
    • Through retail stores
    • As premium products
    • Door to door distribution
    • Through mail

Every care should be taken for the proper distribution of such samples so that it reaches the genuine customers.

  • Coupons – it is sort of a certificate which is distributed along with the product. Customers present the coupons in subsequent purchases and get the stipulated discount or another product at a discount free of cost.  It is a costly affair.  The expenses involved in floating such a promotional program adds to the cost of product or service.

Coupons are used widely by marketers across many retail industries and reach consumers in a number of different delivery formats including:

    • Free-Standing Inserts (FSI) – Here coupon placement occurs loosely (i.e., inserted) within media, such as newspapers and direct mail, and may or may not require the customer to cut away from other material in order to use.
    • Cross-Product – These consist of coupons placed within or on other products.  Often a marketer will use this method to promote one product by placing the coupon inside another major selling product.  For example, a pharmaceutical company may imprint a coupon for a cough remedy on the box of a pain medication.  Also, this delivery approach is used when two marketers have struck a cross promotion arrangement where each agrees to undertake certain marketing activity for the other.
    • Printout – A delivery method that is common in many food stores is to present coupons to a customer at the conclusion of the purchasing process.  These coupons, which are often printed on the spot, are intended to be used for a future purchase and not for the current purchase which triggered the printing.
    • Product Display – Some coupons are nearly impossible for customers to miss as they are located in close proximity to the product.  In some instances coupons may be contained within a coupon dispenser fastened to the shelf holding the product while in other cases coupons may be attached to a special display (see POP display below) where customers can remove them (e.g., tear off).
    • Internet – Several specialized websites, such as HotCoupons.com, and even some manufacturer’s sites, allow customers to print out coupons.  These coupons are often the same ones appearing in other media, such as newspapers or direct mail.  In other cases, coupons may be sent via email, though to be effective the customer’s email program must be able to receive HTML email (and not text only) in order to maintain required design elements (e.g., bar code).
    • Electronic – The Internet is also seeing the emergence of new non-printable coupons redeemable through website purchases.  These electronic coupons are redeemed when the customer enters a designated coupon code during the purchase process.
  • Rebates – Rebates, like coupons, offer value to purchasers typically by lowering the customer’s final cost for acquiring the product.  While rebates share some similarities with coupons, they differ in several keys aspects.

First, rebates are generally handed or offered (e.g., accessible on the Internet) to customers after a purchase is made and cannot be used to obtain immediate savings in the way coupons are used.  (So called “instant rebates”, where customers receive price reductions at the time of purchase, have elements of both coupons and rebates, but for our purposes we will classify these as coupons due to the timing of the reward to the customer.)

Second, rebates often request the purchaser to submit personal data in order to obtain the rebate.  For instance, customer identification, including name, address and contact information, is generally required to obtain a rebate.  Also, the marketer may ask those seeking a rebate to provide additional data such as indicating the reason for making the purchase.

Third, unlike coupons that always offer value when used in a purchase (assuming it is accepted by the retailer), receiving a rebate only guarantees value if the customer takes actions.  Marketers know that not all customers will respond to a rebate.  Some will misplace or forget to submit the rebate while others may submit after a required deadline.  Marketers factor in the non-redemption rate as they attempt to calculate the cost of the rebate promotion.

Finally, rebates tend to be used as a value enhancement in higher priced products compared to coupons.  For instance, rebates are a popular promotion for automobiles and computer software where large amounts of money may be returned to the customer.

  • Premium or bonus offer – Under this method, the premium which is a merchandise is offered at a relatively low cost to the consumers in the form of bonus. Premiums are of four types :
    • In – pack or on – pack premium – A gift of low value article is kept inside the packet or outside, or distributed along with the packet.
    • Free – in – the – mail premium – A gift usually sent to the buyers by mail after the receipt of the proof of the purchase.
    • Self – liquidating premium – A method of sending the item by mail below the cost of retail price to the customers who send request for the same. The company usually recovers the cost of the sales promotion.
    • Reusable – container premium – the premiums which has reusable value to the customers. To make premium scheme operative, promotional information needs to be printed on the pack and the premium as well.
    • Price – off promotion – the consumer gets the product at a reduced price. There are three types –
      • Reduced price pack
      • Multiple pack
      • Bonded pack
      • Money return offer – Under this promotional scheme, the consumer can get back his money under certain terms and conditions if he is not satisfied with the product he had bought.
      • Contests – Under this the consumers are requested to submit the evidences of their purchases either in the form of cash memos, wrappers, and box tops along with entry forms. Sometimes the participants are also asked to answer some puzzles or write a slogan about the product. All such contests generate a considerable interest among the customers to increase the demand of the product.
      • Sweepstakes – It is some sort of a lottery that helps in inducing interest among the customers to buy more of a product. Consumers are provided with coupons that have serial numbers which are asked to be filled by them. These coupons are then taken from them and a lucky draw is conducted, where the winners are selected for prizes both in cash and kind.
      • Demonstration – The main aim of demonstration type sales promotion is to propagate the technical aspects, merits and various usages of the product and services among the customers.
      • Personal Appearance – An in-person appearance by someone of interest to the target market, such as an author, sports figure or celebrity, is another form of sales promotion capable of generating customer traffic to a physical location. However, as with the demonstrations, personal appearance can be expensive since the marketer normally pay a fee for the person to appear.