Consumer sales promotion techniques available are coupons,refund offers, samples, premiums, and contests. Using these techniques, you can build your startup’s credibility and presence.
COUPONS: They are a direct way to pass a price reduction on to consumers. As a manufacturer, if you give retailers a discount in hopes that they will pass it along to consumers, you may be sadly disappointed. Marketers use coupons to encourage trial, brand switching, and brand loyalty.
REBATES: These are also used for more expensive items, especially electronics, to reduce their perceived cost to the consumer. Rebates require buyers to complete paperwork, retain receipts, and mail them in. Because of the work involved, even rebates of $50 or more have low redemption rates. Marketers need to estimate the redemption rate and net cost and include the net cost in their marketing budgets.
REFUNDS: They are generally used to accelerate the normal consumer purchase cycles. Refunds are usually used to increase the quantity or frequency of purchase by encouraging buyers to stock up. Battery manufacturers frequently use refund offers. Such offers have been cleverly used to stock up consumers just before a competitor’s promotion or product introduction.
SAMPLES: They are a high-cost way of introducing a new product. Sampling requires a cash investment to produce and stock the smaller-sized packages. Samples are properly used for products whose benefits are “sensory in nature” and cannot be communicated effectively by advertising. Sampling may also be effective for products that consumers would view as risky in switching to a new brand, or that may have a high probability of generating word of mouth (WOM) activity after use. Many new shampoos use free or low-cost samples since their benefits are sensory. Sampling reduces the buyer’s risk of trial.
PREMIUMS: They are items offered at low or no cost to purchasers of a product. Self-liquidating premiums are those for which the price charged covers just costs. Hershey’s has periodically offered watches and Christmas ornaments as premiums. To get the goodies, chocolate lovers had to send in wrappers as a proof of purchase.
CONTESTS AND SWEEPSTAKES: These are a popular promotion and the most restricted legally because they border on gambling. Many contests are conducted by inviting customers to corporate Web sites to play a game and enter contests. A thorough analysis of the game rules and the laws must be conducted to avoid a disaster. In 1984 McDonald’s ran a summer Olympics medal game. Every time the United States won, game pieces could be redeemed for free food and other prizes.
We’re here and we’re listening to your questions. Do follow this link to get all your entrepreneurial doubts cleared at a one-step Q&A panel with our experts: https://sncoglobal.com/#q&a
