Consumer Promotions

Actions intended to convince individuals to purchase a good or service. A typical business will only offer a consumer promotion like a reduced price, free sample or bonus offer for a short period in order to stimulate demand for and awareness of the product being promoted.

CONSUMER PROMOTIONS

Consumer promotion is easier now then what it was before, brands are able to pull consumers to buy their products easily. This is usually done in addition to advertising, advertisements are shown for a longer duration, while consumer promotion is done as a form of sales promotion.

Consumer promotions are a way to attract new customers and grow your customer base. This is a common objective for new companies or new product launches.

Getting customers to switch brands by offering free samples and free trials is another goal. This approach limits the risk to customers when giving your product a try.

Clearing out extra merchandise, combating competitor promotions and generating short-term revenue and cash flow are other common consumer promotion goals.

Objectives of Consumer Promotions

Coupons

percent-off discounts

free trials and samples

buy one get one free deals

Rebates

Premiums and ad specialties

contests and sweepstakes

are common examples of consumer sales promotions. Each specific promotion has its own strengths and weaknesses. In general, though, the intent is to market a better value proposition by lowering the price customers pay to get the same product or service previously sold at a higher price point.

Consumer Promotion Types...

Customers are given coupons during holiday season and at times for their birthdays and anniversaries. A certain percentage of discounts are given, customers are encouraged to buy products at a reduced price.

COUPONS....

Coupons

Premiums

Types:Free-in-the-mail (gifts for buying)In/on-package (attached gifts… e.g.: toys)Store or manufacturer (provided at time of purchase from

store or manufac.)Self-liquidating (premium sold at cost to consumer)

Issues: Time (short life spans – popularity wanes)Cost (exclusivity increases demand and thus higher prices

for desired items)

CONTESTS AND SWEEPSTAKES

Contest :participant must compete (activity needed)…often purchase needed to enter

Sweepstakes

No purchase required, chances of winning are probability driven (a random draw). May have restrictions of one entry per store, etc.

Refund: return of the full amount of money tendered by the customer

Rebate: returns a portion of the money tendered by the customer

How are they used????

Refunds – for trial offers

Rebates – to promote the sale of other company products, or the sale of the purchase product

Refunds and Rebates (Trial Offers)

Cont…

Examples: Rebates on Computer Hardware (Printers), website that gives you the best purchase price for items, services – cash back if not satisfied

Goal of: Trial offers: let you try the product first hand – most people

won’t go through the trouble of sending it back unless they are really unsatisfied.

Rebates: future sales – rebates on next item purchasedBoth: mailing lists

Sampling

Offering in whole or part a product or service to the customer free of charge

Good for promotion of new products or improved products

Better at point of purchase than in mail or delivery

Works well with other forms of promotion

e.g.: sample a food at a grocery store and have coupons at the sample table so that customers get a deal on the purchase

Samples Examples

Pepsi Taste Test

Shoe cleaner

eye glasses cleaner (just soap)

window cleaning (will clean one window)

Methods

In-store distribution

Direct sampling

Response sampling

On-package sampling

Media sampling

Event sampling

Selective sampling

Cont…

Problems:• Cost is high. (Try BUZZ marketing in lieu?)• Packaging must be congruent with full size version for product

recognition.• Requires careful planning of distribution.

How to Succeed:• As part of IMC plan• Focus is to induce TRIAL USE• Most effective for NEW products or NEW versions• Can switch BRAND LOYALTY (up to 70%)

B

onus packs offer the consumer an extra amount of a product at the regular price by

providing larger containers or extra units.

B

onus packs result in a lower cost per unit for the consumer.

P

rovide extra value

E

ffective defensive maneuver

L

arger purchase order

Bonus Packs

Price-Off Deals

R

educe the price of brand

P

rice-Off reductions are typically offered right on the package

T

ypically, price-off rage from 10-25 percent

P

romotional discount reaches the consumer rather than being kept by the trade.

Trade oriented sales promotion

Sales promotion programs target to the trade should be based on well defined objectives and measurable goals and a consideration of what the marketer wants to accomplish.

Major aim of trade promotion is to keep marketing intermediaries like wholesalers and retailers interested more and more so that :-

They do distribution properly.

Provide support for new products.

Maintaining support for established brand.

Encouraging retailers to display established . brands.

Building retail inventories.

Types of Trade Oriented Promotions

BuyingBuying

PromotionalPromotional

SlottingSlotting

POP displaysPOP displays

Sales trainingSales training

Trade showsTrade shows

Contests and incentivesContests and incentives

Trade allowancesTrade allowances

Co-op AdvertisingCo-op AdvertisingTypesTypes

Coordinating Sales, Advertising, IMC Tools

Budget allocation

Coordination of themes

Media support and timing

DISPLAY ADVERTISING

WEB BANNER ADVERTISING

POP UPS/POP UNDER

Search engine marketing

Search engine optimisation

Sponsored search

Social media marketing

Mobile advertising

Email advertising

PAY PER CLICK MARKETING

Pay for performance 24 hours marketing Results can be measured Used to build database E-mail marketing Can easily reach younger

customer You can target market to

almost anyone Education based marketing Mobile Marketing Use of video Build brand through social

media Test headlines and copy

Major reasons for using internet marketing