The word promotion originates from the Latin word ‘Promovere’ which means push forward an idea.
When it comes to selecting a specific product, promotions or offers put across by companies play a very important role in the decision-making process of a consumer.
A successful promotional campaign can nurture relationships with consumers through constant engagement. Consumer promotion is a marketing technique that is used to lure a customer to buy your product, Simple!
Brands usually plan these promotions to last for a specific time period and they are used for achieving a set purpose, such as increasing market share or unveiling a new product.
Brands also use consumer promotion as a tool to boost their sales.
What are the objectives of Consumer Promotion?
1. Introduce new products to the consumer
2. Build product awareness amongst the masses
3. Creating renewed interest in the minds of the consumer
4. Stimulate user demand
5. Reinforce the brand
7 key benefits of Consumer Promotions on a brand:
1. Opportunity: A promotion allows the brand to communicate the message to its target customer and that helps a brand to form a formidable and long-lasting relationship with its customer base.
2. Reputation: Word of mouth is a powerful medium of communication. Give your customers a reason to be surprised and they will make sure your reputation thrives.
3. Differentiation: A brand needs to differentiate itself from the competition for it to survive, and consumer promotion techniques can be a fantastic way for a brand to stand out amongst the crowd
4. Revenue: More promotions will surely help a brand increase its sales. However, the brands need to calculate the cost involved in rolling out these promotions and ensure that it is a profitable endeavor. Do simple cost-benefit analysis
5. Focus: A consumer promotion, more often than not, becomes a mega event for the company, which allows it to focus all its channels of marketing.
6. Information: Promotions are an excellent means to gather huge volumes of useful data from its customers. When customers redeem promotions, brands can often retrieve data such as email addresses and contact details.
7. Incentive: If both products offer similar features then a brand with promotions do better sales.
Let us now look at the type of Customer promotions:
Type 1:
Price Promotions:
Price promotions are really popular in India with most of them coming in the form of an end-of-season sale.
“Up to 51% off” – Cutting down the price through discounts: Brands do this all the time.
Sub-types within 'Price Promotion’ scheme:
i) Extra-Fill packs “20% Extra”, i.e., giving something extra without additional charge. This is very popular in India, especially in the toothpaste segment where consumers are often motivated through an extra filling without any additional charge.
ii) Free Offers
Buy two and get one free, i.e., giving away an extra unit absolutely free. This is a very popular sales promotion method for apparel marketers. Many brands like Peter England and Arrow come up with such attractive offers to lure consumers to buy more.
Another free offer is usually in the form of free samples to motivate/attract people to try a new product. Yakult, a nutritional supplement brand from Japan, distributed free samples when it first came to India, to stimulate its trial.
iii) Reduced Shelf Price
This is the most common form of price promotion. A product is on sale with a shield sticker showing a reduced price offer. This entices a customer to buy the product at a discounted price in more quantities.
iv) Cash Rebates
A customer is invited to collect tokens after buying several packs of a certain product and in return receive a cash voucher.
v) Discounts
When a customer buys a single unit of a certain product, discount offers are made. Jewelers and furniture makers engage in this type of sales promotion. Discounts may be in the form of seasonal discounts, quantity discounts, or cash discounts.
vi) Frequent user incentives
Most Airlines offer this type of incentive to their fliers. Economy class fliers can use free miles to upgrade their tickets. A frequent flyer membership attracts a customer to come back to the airline again and again for future bookings. This is a part of the Loyalty marketing programs run by the airlines to retain customers.
vii) Finance Deals
Many consumer durable companies give either interest-free loans or financial support to buy a certain product. Bajaj Auto provides this facility to consumers who want to buy two-wheelers. Similarly, Tata motors provides a credit facility for buying commercial vehicles.
viii) Point-of-purchase Displays
Point-of-purchase displays are displays designed primarily by retailers to hold and display their products in high-traffic areas like a check-out counter in a departmental store. They primarily promote impulse purchases.
Type 2
Gift Promotions:
i) Free Prize Draws & Lotteries
It involves putting the names of all the entrants in a computer and deciding winners by luck. This tool of promotion adds additional excitement and interest and many people buy the product to enter the draw and try their luck.
ii) Sweepstakes/Games
One of the most popular types of sweepstake promotion is “Scratch card promotion” or “instant wins”. Such contests are constantly being run by the likes of Paytm and PhonePe. Another cost-effective sweepstakes prize is travel, which has a substantially higher perceived value than its cost.
Type 3
Premium Promotions:
In this kind of sales promotion, the benefit comes in the form of premium merchandise.
i) With-purchase premiums
The premium is available at the point of purchase. These are also called ‘near-packs’ as retailers keep the premium near to the final product of purchase. Maruti Suzuki provides with-purchase premiums.
ii) Self-liquidating Offers
It consists of promotions where consumers are offered a gift. A customer gets something additional to the main item of purchase. A Dell computer distributor gives the laptop bag free along with the purchase of its laptop. This type of promotion is widely used for – subscription-based products (e.g. E-Books) and Consumer luxuries (e.g. Watches and perfumes).
Providing cash back also falls under this category. Many online portals like MakeMyTrip offer cashback facilities as a part of their sales promotion efforts.
iii) Partner Promotions
This category of promotions involves two parties that are not competing with one another. A new car and a free insurance cover or a soft drink and cinema are good examples of such a type of promotion.
For example, in 2012, for every McDonald’s meal which a customer bought, he was offered a Rs. 50 off a purchase of a movie ticket for “Agneepath”
iv) Charity Promotions
This type of promotion appeals to the good nature of consumers. Sometimes, brands announce that for every purchase worth a certain sum, Rs. 100 will go to charity. The choice of charity is crucial from a customer’s point of view.
Type 4
Off-the-shelf Offers:
These are the offers that come up again and again because they are widely popular amongst the masses.
i) Free Accommodation
This is the one that specifically works for the hotel industry. For example, sometimes, during a lull period, hotels offer a stay of two nights for the price of one.
ii) Discount Coupons
Corporate vouchers and discounts are in vogue these days. Many corporates are giving away such deals through Snapdeal, Sodexo coupons, etc. Snapdeal provides discount vouchers for health, entertainment, Apparel, beauty categories, etc.
Type 5
Hybrid Promotions:
i) Trade Fairs
Trade fairs provide a platform for showcase its strength in a particular domain. Representatives from across the world are in attendance during such trade shows and it provides a wonderful platform for brands to showcase their products for a potentially larger target audience.
Such trade shows can have a far-reaching impression of your products in the mind of the international community. In India, the furniture/interior décor industries, textile industry, Automobile industry, defense industry, and others have held multiple successful trade shows in the recent past.
These expos not only invite experts from across the Globe but also puts our capabilities on display on a grander scale. Trade fairs provide the ways and means to brand India’s Global image.
As we have just seen, consumer promotion techniques are nothing but a part of a brand’s marketing strategy. For the birth of a new product or for the continued existence of a brand, sales promotion is very much a requirement.
Author: Harsh Mankodi
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