There are many different sales promotion techniques that marketing firms use to build interest in a product or increase the sales of a product over a specific period of time. This paper will discuss the key sales promotion techniques that marketing firms direct at both trade and consumers (Solomon, Marshall, Stuart, 2008). Before we dive in to the different types of sales promotions let’s identify the difference between trade and consumer. Promotions that are directed toward trade are focused on the channels of which the product will be distributed (Solomon et al, 2008). For example a trade promotion may be focused at the retail chain Target or Sport Chalet. Promotions that are focused on consumers are directed people like you. To begin we will focus on sales promotion directed toward trade.
Discounts and Deals
Discounts and deals are incentives to get the retailer to purchase the company’s product so that consumers will eventually purchase them. One type of deal is a merchandising allowance, which is a sort of reimbursement to the retailer for supporting a company’s product (Solomon et al, 2008). For example, during football season the grocery store Albertson’s may support Budweiser and allow them to set up an extravagant floor display. In return Albertson’s may receive some type of reimbursement for that support.
Another type of deal is called a case allowance. This basically means that the more of the product that the retailer orders the lower the cost per unit is(Solomon et al, 2008). For example, if a retailer orders 50 bags of chips from Frito Lay the retailer may pay a dollar per unit. However, if the retailer decides to purchase 200 bags of chips from Frito Lay the price per unit may only be $0.25, which would be an incentive to purchase a large quantity.
Increasing Industry Visibility
Increasing industry visibility has a very literal meaning. The company in this way is trying to become more visible in the industry. This technique is used both with trade and consumers. One technique is trade shows. Trade shows allow companies to display products, provide information, and obtain new business contacts(Solomon et al, 2008). Every year there is a computer or electronic trade show that allows companies to do just that. Both retailers and consumers attend these trade shows and it is a great way to increase visibility.
Sometimes at trade shows promotional products are also given out. These free products usually contain a logo, company name, or company information to help retailers and consumers remember the products that they have seen(Solomon et al, 2008). An example of a popular promotional product is a pen. Many banks have pens for their customers or prospective customers to take. For the prospective customer this may remind them of their banking choices. For the person that is already a customer they may lend the pen to a friend and the friend may decide to join the bank as well. These products really just get the name of the company out into the world for people to see.
Another way to increase visibility is through incentive programs. This is usually done in the form of push money. This push money which is paid by the manufacturer gives the salesperson or a retailer a reason to sell more of their product over another brand (Solomon et al, 2008). For example, motorcycle and watercraft manufacturers like Yamaha, Suzuki, and Kawasaki deposit money in to a debit account for salespeople when they sell a qualifying vehicle. The amount usually depends on the product being sold.
Price-Based Consumer Sales Promotions
Price-based consumer sales promotions are ways to get the consumer to buy more of the product. A common form of this type of sales promotion is the coupon. Coupons can come in newspapers, inside store ads, or from the Internet and all encourage the consumer to buy the product because they can save a dollar or two if they buy it now versus a month from now. Another common sales promotion is the rebate (Solomon et al, 2008). For example, you can purchase a Compaq computer for $649.99 after the $150 manufacturer rebate. This sales promotion requires you to mail in the proof of purchase and wait for the $150 check, unless of course it is an instant rebate.
Yet another type of sales promotion is the loyalty program. Manufacturers may offer a discount or freed item to customers who stay loyal to their product (Solomon et al, 2008). For example, Avon may offer you a free product after you have purchased from their company multiple times. Besides lowering prices or giving rebates, companies may try to encourage a consumer to purchase a product by offering more of the product at the same price (Solomon et al, 2008). For example, Herbal Essence shampoo may have been in a 10 ounce bottle for $2.49, but the company now claims you get 50% more by offering a 15 ounce bottle for the same price.
Attention-Getting Consumer Sales Promotions
Attention-getting consumer sales promotions are used to get the consumers interested in a product and create publicity for the manufacturer. One way to do this is through contests or sweepstakes (Solomon et al, 2008). The television show American Idol did this one year by allowing songwriters to submit their songs to be chosen as the winning Idol’s first single.
Premiums also get consumer attention by giving the consumer something for purchasing a product (Solomon et al, 2008). For example, if you buy Aveeno sunscreen you receive a free UV protectant lip balm. Sampling is also a popular way to stimulate interest. Wal-Mart allows consumers to request different samples online at different times of the month. Another way to get consumer attention is through point-of-purchase promotion. Just like the large Budweiser display mentioned earlier, these displays grab consumer attention.
Lastly, product placement and cross promotion are ways to create publicity. An example of product placement is when you see a iPhone featured in the hottest television show or video game. An example of cross promotion is American Idol to promote iTunes and vice a versa.
References
Solomon, M.R., Marshall, G.W., & Stuart, E.W. (2008). Marketing:Real People, Real Choices (5th ed.). Upper Saddle River, NJ:Pearson
