a. In-Pack, On-Pack, and Container Premiums: These various terms for premiums are primarily used to distinguish the difference in methods of rewarding the consumers. For that, company provides extra commission, buy back guarantee, price offs, allowances, gifts, free goods to them. The premium may be free or available to the consumer by paying a price well below the regular market price. Just buy a scooter, scratch a card and win a sure prize. Incentive to Salesmen e.g., some prize of salesmen achieve their predetermined targets. If the premium is particularly attractive, there would be a number of consumers who would want the premium in a hurry and make the required number of purchases. Exchange Schemes. Coupons originating from the manufacturers are redeemable at any retail shop that carries the promoted product. The prizes, depending on the announced number of prizes, are declared. Senior Project Manager & Head of Experiential Activation +41 44 360 84 71 msc*at*promotion-tools*dot*ch Ralph Imper Logistics Operations 079 438 25 62 rim@promotion-tools.ch The first example presents the use of ‘chance’ in case of a consumer non-durable, which is a low-involvement category product and there is hardly anything like brand loyalty. A premium may be inside the package, outside it or received through mail. These are part of Interest promotions because such sales promotions create not only interest but also produce excitement and enthusiasm in consumers. Various tools of sales promotion, also known as methods of sales promotion may be divided into two parts – (i) Consumers Pro­motion Methods (ii) Dealer Promotion Methods. Of course, the discounts may differ across product categories. Manufacturers often offer extra incentives to retailers to gain their co­operation. The list apparently appears to be short, however, considering the possible combinations, the figure reaches to about eight million different approaches. Rebate is a partial refund to someone who has paid more or extra on purchase of a specified quantity or value of goods within a specified period. It also allows an agency and their brand partner to work together with maximum efficiency, collaborating to achieve the agreed target without risk … Cash refund offers or rebates – Are like coupons except that the price reduction occurs after the purchase rather than at the retail outlet. Meetings and Seminars by Producers of all dealers/ distributors where all problems of middlemen are discussed and solutions given. These tools increase sales, introduce a new product to the market or meet competition challenges. d. ‘Trial-size’ Salable Samples e.g., mini bottles or cartons of a product such as shampoo, offered at nominal prices at stores, Both retailers and consumers like this kind of promotion, Retailers like because they keep the profit while to consumers, it reduces the risk of trying new products. This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. The terms refund and rebate are used as meaning the same thing/Long ago, the term rebate was popular by the automobile industry in the developed countries. W hile samplings and tast- ings, price discounts, value added promotions or sweepstakes aim at boosting short t erm s ales, 2640, and the customer may buy the higher end model. Same techniques, which are used for consumer promotions are also used to promote products to business users, such as stationary, computer systems and consumables, machinery, automobiles, and many other products. Price discounts (also called cents-off deals) are communicated to the consumers through advertising, at the point-of-purchase by listing the reduced price on the package or signs near the product or window display, or by the sales people. The products are generally banded together physically, or put together in a blister pack, such as razor-and-blade, toothpaste and tooth-brush, or a smaller size of the same product may be attached to the regular size. Samples are defined as offers to consumers of a small amount of a product for trial. xi. These tools are essentially something that gets the customer to make a purchase. xiii. Tools and programmes for dealer/distributor sales promotion . Such a deal is designed to stimulate customers to try a new product, to encourage new users to try an existing product, or to encourage customers to continue product patronage, increase purchase quantity, purchase multiple units, and accelerate usage rate, etc., such deals are suitable when the brand loyalty is low, product category is considered a commodity, and price is the primary consideration by the customers. There is a subtle difference between these two terms. These are all different approaches to offer immediate reward to the consumer at the time of purchase. Disclaimer Copyright, Share Your Knowledge Money-off offers; 13. Computer magazines often include a compact disc with each issue. Getting a printer free with the purchase of a computer, or getting a bar of detergent free with the purchase of four cakes of toilet soap, or getting a Swiss knife well below the market when the consumer purchases a microwave oven, are typical examples of premium. 1. In India, contests and sweepstakes are very popular promotional techniques and are frequently used in diverse product categories and services. The premiums can be used to solve a competitive price advantage or to counter the competitor’s coupon promotion. Sales promotion letters and catalogues. Every imaginable prize or reward is used to excite and attract customers to participate. 50 and the quantity contained in the pack is 100 gms. For example, Maruti announced a gift cheque of Rs. Advertisement Allowances/Materials, encouraging dealers and distributors to advertise products. Among all the sales promotional devices, probably the most exciting and highly rewarding are the contests and sweepstakes. The motivation to purchase and continue purchasing the product gets shifted to the incentive of premium as the purchase situation is one of total low-involvement as far as the product category is concerned. Demonstrations are provided free of cost. Sales promotion tools are categorized into some dimensions like, rebate &discount offer, coupon, free sample, price packs and Buy-one-get-one (Nagadeepa, Selvi , & Pushpa , 2015). Demonstration of products induces customers to buy. A discount coupon is a certificate enabling a consumer to get discount on buying a particular product. If advertising support has been effective, or prior to offering price discount, there has been a sample drop of the product, then even first time buyers may purchase the product. Often a combination of contest and sweepstakes is employed in some promotions. After the receipt of the proof, the marketer sends the premium to the consumer. Producers/retailers may promise free service to consumers for a specified period of time after sales. Sales Promotion Schemes; Important tools of Sales Promotion Schemes. The seller determines the number of installments in which the price of the product will be recovered from the customers. Samples are one of the most important tools of sales promotion. In this period, the customers can use and test the company’s products and decide for themselves whether the products are useful or not. To increase sales of any product, producers adopt different measures like distributing samples, gifts, coupons, bonus, etc. Sales tools come in multiple categories, including customer relationship management (CRM), sales and market intelligence, lead handling and processing, analytics and reporting, sales training, and sales automation and integration. To that end, here are some of the best sales promotion tools that you can use to boost sales right now. Thirdly, […] Sometimes, coupons may be part of magazine or newspaper advertisements. A trade show booth is a trade sales promotion that allows you to create an area to market your product to vendors or consumers at an event location where you can draw people in to network and create relationships. These samples may be distributed door-to-door (through personal selling) or retail stores. Adv. 8. Sales promotion aimed at consumers is called ‘consumer sales promotion‘. Basically, sales promotion has three specific objectives. Premium may be of several kinds — direct premium, reusable container free in mail premium, a self liquidating premium, trading stamps, etc. However promotion and product have received more attention. Special Rebate 9. The lots are drawn and the winners get prizes. A price deal for customers means a reduction in the price of promoted product and the customer saves money on purchase. Indian companies using this method are – Proctor and Gamble, Nestle and Parle. Anyone can send the answers to the questions on a postcard. Free door-to-door samples – This technique however is costly. For example, the participants may be required to write a slogan, choose a name, or create a design, etc. For example- few car retailers offer free servicing for the first 6 months if certain car components are damaged or are under performing. When the product is good but the brand share is low, a refund seems to work very well. So basically, these are different tools with purpose of encouraging consumers, dealers as well as the company’s sales force. A panel of judges selects the best and buyers are given prizes. The big prize: a washing machine. Comparatively, coupons seem not to be so popular with young, less educated, unmarried individuals. A contest is based on testing the skill or ability and may not involve the proof-of-purchase (this is called a “consideration”) to enter the contests. Patronage reward – Cash or gift, for the regular use of a particular product of the company like privilege card membership given by the company to the regular user of the products. These promotions can be developed for durable as well as non-durable goods. Coupons can be considered as certificates offered by retailers or manufacturers that entitle the owner to some stated savings or claim the specified thing. 3. Such sales promotion tools stimulates their buying behavior and induces them to buy the product. Bonus packs are generally limited to low bulk, low-price products, however, of late exceptions, such as Akai offer have been observed. In fact, in most households the flour comes from flourmills where people take their wheat to be converted into wheat flour. v. Sales Contests and Sweepstakes – Three kind of contest prizes are – (a) Cash awards, (b) Merchandise Prizes, (c) Special Honour viz., winner to appear in a TV show. A well-known television programme in India, “Surabhi”, is an example of this type of promotion. roughly a ratio of 60:40 is maintained in dealing both of them. A sweepstakes calls for consumers to submit their names for a draw. Premium – extra gift with product like balls, stickers, pens, cards, diaries, calendars, manuals, and other literature. Everything you need to know about the tools and techniques of sales promotion. 55.50. Price packs (cents-off deals) – Offers consumers saving off the regular price of the product, directly cuts price on the label, or combination of two products (tooth paste and tooth brush). Sales contest – It involves salesmen or dealers to motivate them to increase their sales performance during a given period, with prizes going to those who did best. A customer was required to buy a pack of & 7 O’clock P II for Rs. Consumer Promo­tion Methods are those which directly encourage consumers to buy product in more and more quantity. Consumers have to take some action to claim the premium, such as sending the proof of a single or multiple purchases and wait for some period of time for the delivery of the premium through mail or courier. Before publishing your Articles on this site, please read the following pages: 1. This is an example of a very clever sales promotion of a product, which is considered a commodity. For effective promotion, it is important to have an effective platform to ensure that the advertising campaign is directed to your target market (you do have one of those, don't you? xii. Gillette announced a refund offer. All tools of sales promotion are fairly simple and can be reduce to twelve in number. The refund offer may sway the decision in favour of the promoted product. Cross-Couponing offers and other schemes; 10. Price Deals (Price-off, Price cut, Cents off). This would help to load-up the consumer. The same agency says. Coupons bear a date of expiry and cannot be redeemed after the cutoff date. This is a method to “load” the consumer up with the product. It is also called pull strategy. 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