There is no doubt that competition is very intense almost in all industries. In such situations, marketers apply different techniques to persuade customers to purchase their products and services. Sales promotion is one of those techniques. When used appropriately in line with other elements of the marketing mix, sales promotion can turn out to be very effective in acquisition of new customers and retention of the existing ones.
What is sales promotion?
According to the Institute of Sales Promotion, sales promotion refers to ‘a range of tactical marketing techniques, designed within a strategic marketing framework, to add value to a product or service, in order to achieve a specific sales and marketing objective’ (BPP Learning Media, 2010, p.356). It is a process of convincing customers to purchase a product/service.
Different techniques of sales promotion
There are a number of sales techniques which marketers can use depending on the nature and objectives of their promotional campaigns. Buy one get one free, free coupon, prize draw and loyalty cards are to name but a few. The discussion that follows focuses on some of the popular sales promotion techniques.
Buy one get one free
It is a very popular sales promotion technique. It is widely seen in the retail sectors. With this technique, customers are convinced to purchase a product as they are rewarded with a free one. However, critics say this technique often forces customers to purchase something they may not need.
Money off coupons
From educational institutes to supermarkets, many companies offer their customers money off coupons very often. Customers cut coupons out of newspapers, magazines, brochures, leaflets or a product packaging that enables them to buy a product next time at a reduced price.
Companies sometimes organise different customer-oriented competitions. Customers need to buy something in order to take part in the competition. The winner in the competition receives some rewards in the end. The prospect of winning a prize encourages customers to buy some products.
Organisations sometimes reduce the original price of some products/services to persuade customers to buy them. They come up with deals such as ‘40%’ off, upto ‘70%’ etc. Some customers are often convinced by these deals and they feel have gained value for their money. However, critics argue that the so-called price reduction needs more transparency as not many customers will remember the original price.
Almost all big organisations now-a-days either have their own loyalty cards or, are part of a loyalty scheme. Nectar card, Tesco Clubcard, and Iceland Bonus Card are some good examples in this regard. When customers buy something and use their loyalty cards, they earn some points. Once they reach at certain points, they become eligible for some gift money, goods or other offers. It should be noted that different loyalty cards have different processes and rewards. For example, customers can have a free cup of tea at McDonald’s once they have collected six stickers. They need to buy six cups of tea to collect six stickers (each cup of tea comes up with a sticker) and the 7th one is free!
In a nutshell, sales promotion is a very effective technique for companies to increase their sales. However, it should be mentioned that sales promotions may sometimes be costly. Sales promotion techniques have also been accused of contributing to food waste in the UK, USA, and some other countries.
The article publication date: 25 November 2016
BPP Learning Media (2010) Marketing Principles, BPP Learning Media, London
Photo credit: Pixabay
Author: M Rahman
M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of Leeds Metropolitan University and London South Bank University.