Sometimes, coupons may be part of magazine or newspaper advertisements. Premium refers to goods offered either free or at low cost as an incentive to buy a product. A premium may be inside the package, outside it or received through mail. The reusable package itself serves as a premium. Premium is generally offered for consumer goods such as soap, toothpaste, etc. Premium may be of several kinds — direct premium, reusable container free in mail premium, a self liquidating premium, trading stamps, etc.
Direct premium can be inside the pack or outside it. A reusable container can be reused after the product is reused. Free in mail premium means a premium item will be sent by mail to consumers who present proof of purchase to the manufacturer. A self liquidating premium is the extra quantity offered at the normal price. Trading stamps are given by the seller to consumers. These are redeemable at the stamp redemption centres. Contests are the promotion events that give consumers the chance to win something such as cash, trips or goods.
Contests are conducted to attract new customers. They introduce new product by asking the prospects to state the reasons for the purchase of the product. The buyer purchases the product and submits the evidence of purchase with entry form for contest.
Entry forms are duly filled by the buyers. For example, attaching a sample of a shampoo sachet with a bottle of a beauty lotion. The purpose is to gain new customers or enter into a new market. The organisations sometimes asks to submit the old product manufactured by them, but sometimes, the exchange rolls over to a product from any brand. For example, most of the mobile phones are sold with exchange offers for any brand on the ecommerce site — Flipkart.
These are mailed, accompanied with other products, with newspapers or magazines, or even direct mail. This helps consumers and also the dealers as they are required to stock the product because of a possibility of increase in demand. These help in introducing a new product, encourage trials, etc. Advertisements 5 Cash refund offers or rebates — Here the manufacturer gives a certain percentage of refund as part of the deal for buying a product. The refund is not given while making a purchase but received when the buyer submits a proof-of-purchase to the manufacturer.
For example, sales people at malls and retail stores demonstrate perfumes, cosmetic products, small electronic items, etc. Manage consent. Close Privacy Overview This website uses cookies to improve your experience while you navigate through the website.
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The cookie is used to store the user consent for the cookies in the category "Other. The cookie is used to store the user consent for the cookies in the category "Performance". It does not store any personal data. Functional Functional. Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features. Performance Performance. 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.
Most of these techniques can be used both for consumer as well as trade promotions. There is plenty of variety, flexibility, and motivation to action. A judicious combination of techniques can be used to achieve almost any promotion objective. Customers are motivated, stimulated, and influenced to respond in a predictable manner to sales promotions. Price deals are probably the most commonly used promotional techniques.
A price deal for customers means a reduction in the price of promoted product and the customer saves money on purchase.
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.
A price discount can be used as a defensive as well as an offensive tool. When used as an offensive weapon, the objective is to generate additional sales and increase market share and long run profits. 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.
Such discounts may appear in newspapers, magazines, and television advertisements. Similar discounts are often advertised by retailers in local media called feature advertising and by manufactures in national print and audio-visual media.
Retailers may announces price discounts for a variety of reasons. Whenever the store-traffic increases, customers visiting the store not only buy promoted product, but some of them buy other products as well. It is also possible that the retailer bought excessive stocks when the manufacturer offered trade deal and to clear this excess inventory the retailer offers a price discount to consumers.
Yet another reason can be that when retailer feels threatened, then the only way to respond to competitive situation is to offer a price discount to consumers to move the product off the shelves. Of course, the discounts may differ across product categories. Price discount generally do not stimulate consumers to buy a product in large quantities if the unit value is low, product is not bulky, and the holding cost is not high.
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. Such promotions work very well in gaining the attention of consumers, particularly at the point-of-purchase POP among similar brands, and may also encourage unplanned or impulse buying.
If there are three different models of a product and because of the discount offer the price of the higher end model appears not too high to the consumer, compared to the lesser- priced model, then consumer may buy the higher end model. For example, if the price of a more expensive wristwatch is Rs. Price-packs are also called value-packs. This may take any of the two forms, bonus pack and banded pack.
In case of bonus pack offer, an additional quantity of the same product is offered free when the standard pack size of the product is purchased at the regular price. This type of deal is often seen in case of laundry products, food products, and personal care products, etc.
This is a way to reward the present consumers and may not have any impact on the users of competitive brands. A variation of this offer, and more commonly observed, is when the marketer develops special packs of the product containing more quantity, but the price is proportionately low.
For example, the regular price of a standard pack of a product is Rs. For the purpose of sales promotion the company offers a special pack containing gms, and the price is Rs. This technique is often used to introduce a new large size of the product, or to encourage continued usage, and also to increase consumption.
Many offers of this type are seen in consumer non-durable products consumed on daily basis. It is termed as banded pack offer when two or more units of a product are sold at a reduced price compared to the regular price couple of months ago, Lux International offered a similar deal. The pack contained four cakes of soap at the price of three. 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.
This is a fairly popular technique in cases of footwear, shirts, jeans, towels, and many other varieties of products. Bonus packs are generally limited to low bulk, low-price products, however, of late exceptions, such as Akai offer have been observed. Additional quantity of the same product or additional unit of the product is appreciated as a reward by the consumer.
There is a subtle difference between these two terms. The Random House Dictionary defines a refund as repayment of money, and a rebate as a return of part of the original payment for some service or merchandise. This means a refund is repayment of total money paid for purchase, while the rebate represents repayment of only of part of the money paid for purchase. However, both these terms are used interchangeably in the real world of marketing. A promotion of offering refund or rebate by a marketer is a promise to give back a certain amount of money after the purchase.
The offer may be for a product purchase alone or in combination with other products. Depending on the objectives, refund offers are used to encourage trial of a new product, purchase of increased quantity, or increasing the frequency of purchase, or to encourage the customers to purchase those products whose purchases can be postponed, such as refrigerators, microwave ovens, air-conditioners, and other consumer durable products.
Refund offers seem to work very well in guaranteeing the trial of a product or service, since there is no risk involved for the customer because of the promise of total refund of the purchase amount. Evidence suggests that customers look at refunds as rewards for purchase. This appears to build brand loyalty rather than diminish it.
For example, Maruti announced a gift cheque of Rs. The offer was valid for a month only. Gillette announced a refund offer. On returning the empty pack, the customer gets Rs. When consumers increase purchase quantity, they carry more stocks of the product and stay out of markets.
This dampens the competition for a while. In diverse product categories, such as exercise equipment, mixers and juicers, hair dryers, ceiling fans, inkjet printers, and magazines, etc. Some of these promotions appear in audio-visual or print media. Some of them offer a free trial period, and in case the customer is not satisfied, there would be total refund or money and no questions asked. The customer has to send back the product within a specified period of time.
In these situations the refund offer is being used to encourage trial at no risk to the customer. This is a powerful method of ensure trial. Refunds are quite effective in competitive situation where consumers perceive little or no differentiation among brands.
The refund offer may sway the decision in favour of the promoted product. When the product is good but the brand share is low, a refund seems to work very well. There are occasions when the company decides to move in new geographic markets, such refund promotion may prove to be quite effective in motivating high-risk perceivers to decide in favour of the promoted product as the perceived risk is likely to appear as manageable. In local-convenience stores, the shopkeepers recommend certain products of commodity type, such as rice, flour, or cooking oil to consumers.
The assurance given to customers is that if the product is not liked after usage for any reason, total money will be refunded or the customer will have the option to buy any other product of choice. This type of refund policy builds store loyalty among consumers who continue the patronage. Refund offer is limited only by the imagination of the promotion planner and the budget allocation. Refund offers can be used to achieve a variety of promotion objectives, such as to guarantee trial, to reward loyal consumers, to load consumers, to increase purchase frequency, to introduce new products, to enter new markets, to encourage the purchase of related products, etc.
Coupons can be considered as certificates offered by retailers or manufacturers that entitle the owner to some stated savings or claim the specified thing. Coupons bear a date of expiry and cannot be redeemed after the cutoff date. Offer of a coupon is a very versatile technique and can be used to achieve many different sales promotion objectives.
When coupons are offered by the manufacturer all the costs associated with advertising and distributing the coupons, redeeming their face values, and paying retailers a fee for handling, are borne by the manufacturer.
When retailers offer coupons of their own, they have to bear all the above mentioned costs themselves. Coupons originating from the manufacturers are redeemable at any retail shop that carries the promoted product.
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