Back to: Marketing SS1
MEANING OF PROMOTION
Promotion is an element of marketing mix. It consists of all communication efforts aimed at generating sales and or building a favourable attitude for an organisation and its goods or services.
Promotion is no longer enough for a business to have great products. Lots of businesses have this tool. Customers need to know a lot about the product and be persuaded to buy. That is the role of promotion.
Promotion is all about communication, because promotion is the way in which business makes its products known to the customers, both current and potential.
Communication plays an important role in marketing. Communication performs the function of informing the target customers about the nature and type of the firm’s product and services, their s can be unique benefits, uses and features as well as the e price and place at which these products purchased. The nature of marketing communication is persuasive since it aims at finfluencing the consumer behaviour in favour of the firm’s offering. These persuasive communications are commonly called “Promotion”. In the context of marketing, promotion refers to the applied communication used by marketers to exchange persuasive messages and information between the firm and its various prospective customers and general public.
Marketing communication is the essential element of the promotion function of marketing. Effective marketing depends on effective management of its promotion function. Effective promotion comes through effective communication.
What is Sales Promotion?
Sales promotion is a short-term incentive to en courage the purchase or sale of a product. OR It is the array of techniques or tools used by marketers to stimulate immediate purchase or sale of a product. Sales promotional techniques include sampling, coupons, refunds, rebates, contests, price pack, price-off and so on. It pro vides extra value or incentives to the sales force distribution or consumers. OR Sales promotion is any short-term activity that is used to stimulate sales of a product.
Sales Promotional Tools
i. Price-off: This is a form of price reduction by firms to encourage patronage from prospective buyers.
ii. Salesmen competition: These are incentives offered to salesmen who perform better than their fellow salesmen.
iii. Free gifts: These are free products given to customers for purchasing certain items.
iv. Premium offer: These are products 10 108 offered either free or at a lower price as an incentive to customers.
FORMS OF PROMOTION
The following are the forms of promotion:
1. Price-off
One of the most powerful sales promotion techniques is the short-term price reduction Lowering a product’s selling price can have a immediate impact on demand, though marketer must exercise caution since the frequent use c this technique can lead customers to anticipat the reduction and, consequently, withhol purchase until the price reduction occurs again.
2. Coupons
Coupon are sales promotions that usually off a discounted price to consumer, whic encourages trial. Most consumers are qui familiar with this form of sales promotion, whic offers nural org price savings or other incentives when the coupon is redeemed at the time of purchase. Coupons are short term in nature since most (not all) carry an expiration date after which the value may not be received. Also, coupons requires consumer involvement in order for value to be realised. In most cases, involvement consists of the consumer making an effort to obtain the coupon (e.g. clip from re newspaper) and then presenting it at the time of no purchase.
Coupons are used widely by marketers across many retail industries and to reach consumers in a number of different delivery formats including: ts
(a) 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.
(b) Cross-product: This consists 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 bioapproach is used when two marketers ems have struck a cross promotion arrangement where each agrees to undertake certain marketing activity for odly to the other.
(c) Printout: A delivery method that is bool 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.
(d) 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 y dispenser fastened to the shelf holding the product while in other cases, coupons may be attached to a special display sw where customers can remove them.
(e) Internet: Several specialised websites, such as HotCoupons.com, and even 1onto some manufacturer’s sites, allow customers to print out coupons. These vd fontcoupons are often the same ones 3 appearing in other media, such as ol newspapers or direct mail. In other ating cases, coupons may be sent via email, though to be effective, the customer’s vvilo email program must be able to receive HTML email (and not text only) in order to maintain required design elements (e.g. bar code).
(f) 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.
3. Rebates
Rebates are partial refunds that are offered by the manufacturers. Often, manufacturers will use mail-in rebates as incentives for purchasing. The consumer must purchase the product at full price and then fill out paper work and mail in the receipt in order to receive some money back. Rebate programmes allow marketers to promote a company’s product at a reduced post-rebate price, offering a substantial savings to its customers, but also requiring that a set of conditions be met to qualify.
4. Sampling
Companies will often send or hand out samples of products in order to attract customers who may not have purchased their products Otherwise. Beverage companies may target college students and hand out soft drinks on campuses, or a food company may set up a 2011 tand-in grocery store so that consumers can ample their new chips. bor nonsuber of
5. Trade-in-promotions
These allow consumers to obtain lower prices by exchanging something the customer possess, such as an older product that the new purchase will replace. While the idea of gaining price breaks for trading in another product is most frequently seen with automobile sales, such promotion are used in other industries, such as computer’s and golf equipment, where the customer’s exchange product can be reaold by the marketer in order to extract value.
6. Loyalty Programmes
These are sales promotion tool used to encourage and reward repeat purchases by acknowledging each purchase made by a consumer and offering a premium as purchases accumulate. The most popular loyalty programmes today are frequent-flier and frequent-traveller programmes used by airlines, hotels, and car rental services to reward loyal customers.
7. Trade incentives
These are sales promotions used to motivate those in the marketing channel to support a brand or company. Such incentives are directed at wholesalers, retailers and a firm’s internal sales staff. Companies use the same basic short-term reward system as a consumer sales promotion to accomplish their objectives.
8. Contests and Sweepstakes
Consumers are often attracted to promotions where the potential value obtained is very high. In these promotions, only a few lucky consumers receive the value offered in the promotion. Two types of promotions that offer high value are contests and sweepstakes.
Contests are special promotions awarding value to winners based on skills they demonstrate compared to others. For instance, a baking company may offer free vacations to winners of a baking contest. Contest award winners are often determined by a panel of judges.
Sweepstakes or drawings are not skill based but rather based on luck. Winners are determined by random selection. In some cases, the chances of winning may be higher for those who make a purchase if entry into the sweepstake occurs automatically when a purchase is made. But in most cases, anyone is free to enter without the requirement to make a purchase.
A sub-set of both contests and sweepstakes are games, which come in a variety of formats such as scratch-off cards and collection of game pieces. Unlike contests and sweepstakes, which may not require purchase, to participate in a game, customers may be required to make a purchase. In the United States and other countries, where eligibility is based on purchase, games may be subjected to rigid legal controls and may actually fall under that category of lotteries, which are tightly controlled.
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