Consumer Promotions are incentives aimed toward a company’s customers. Promotions are used to gain potential customers or keep current customers satisfied. Consumer promotions are geared toward customer needs and wants. There are many types of consumer promotions to boost sales and keep the customer coming back. Companies use market researchers to develop consumer promotion ideas.
Sales promotion aimed at consumers is called ‘consumer sales promotion‘. It aims at stimulating consumers. The main consumer promotion tools include samples, coupons, demonstration, contests, cash refund offer, premium, etc.
Types of Consumer Sales Promotion tools
A coupon is a certificate that fetches buyers a saving when they purchase a specified product. Coupons are generally issued along with the product. They entitle the holder to either a specified saving on a product or a cash refund.
Coupons are designed
- To introduce a new product
- To promote the sale of an established product
- To sell a product in large sizes
- To stimulate customers to switch brands; and
- To encourage repeat sales.
Coupons are used for consumer convenience goods. They may be distributed door to door, by mail or they may be inserted in packages. 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. A panel of judges selects the best and buyers are given prizes.
- Consumer Sweepstakes
A sweepstakes calls for consumers to submit their names for a draw. Names of consumers are included in a list of prize winning contest. The lots are drawn and the winners get prizes.
- Cash refund offer
Cash refund offers are rebates allowed from the price of the product. It is an offer to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer.
Moreover, if the purchaser is not satisfied with the product, the whole price or part of it will be refunded. Cash refunded offer is stated on the package.
Samples are one of the most important tools of sales promotion. Samples are defined as offers to consumers of a small amount of a product for trial. Free samples are given to consumers to generate their interest in the product. Samples help consumers verify the quality of the product.
Samples are delivered at the doors of consumers. They are also sent by mail or given to customers in the retail store itself. Sometimes, samples are attached to another product.
Though sampling is effective, producing numerous samples of a product is quite expensive. Moreover, distributing samples to customers also involves expenditure.
Sampling is not justified in case of
- Well established product
- A product that is not superior in some way to competing products
- A product with a slow turnover
- A product with a narrow margin of profit, or
- A highly fragile, perishable or bulky product.
- Buy back allowances
Allowances are granted to buyers on the basis of their previous purchases. In other words, buy back allowances are given for new purchases, based on the quantity of goods bought previously.
- ‘Price off’ offer
Goods are sold at reduced prices during slump season. Reduction in prices stimulates sale of goods.
Demonstration is required when products are complex and of a technical nature. Customers are educated as to how to make proper use of the product. Demonstration of products induces customers to buy. Demonstrations are provided free of cost.