Consumer Based Sales Promotion

Published by MBA Skool Team, Published on April 09, 2013

How often have you been attracted to Buy one get one schemes and price discounts? Why are stores like Big Bazaar so successful?

The answer is: Consumer based sales promotion.

India has observed a tremendous annual growth in its revenues after adopting the sales promotion techniques over the last few years. Year 2010-2011 was a turning point for sales promotions.
So what exactly is consumer based sales promotion? Consumer sales promotion is a marketing technique that provokes a customer to buy a product. The promotion typically ranges over a short period of time and is used to achieve a specified objective such as launch of a new product, increased profits and market share, etc. The other benefits that can be attached to it are inventory clearance, attacking matured markets and increasing brand awareness.

Customer oriented sales promotion are offered by retailers to customers in the form of price discount,  sampling, free trial, free gifts, contests, special pricing, etc.

Colgate fresh energy ice blue gel (Colgate India) 50 gm pack, Rs. 5.50 off on normal price, now available at Rs. 12.50 only is an example of one of the most common technique, the price discount technique. The major advantages that can be derived are impulse buying from the customer side and gaining attention about the brand.

Some of the very common and regular visuals of our day-to-day life include:

“Godrej Color Gloss triple action shampoo offers 20% extra free. 100ml +20ml.

Sunsilk shampoo (HUL) 400ml bottle gives 33% more free.

Dettol shaving cream- Get 40% extra free.

Bisleri – 20% extra free (Bada Bottle, Same price).

These techniques of price pack deals can be of 2 forms:

Bonus packs and Banded packs. In case of a bonus pack, an additional quantity of the same product is offered free when the standard pack size of the product is purchased at the regular price. The Banded pack is when the marketer develops special packs of the product containing more quantity but the price is proportionately low. This is a method to “load” the consumer up with the product. Buy 1 get 1 free is a variant of this very same technique. These techniques encourage usage and sustain the habit.

Refunds and Rebates are the most popular among the sales promotion techniques, as it poses no threat to the consumer. Taj Mahal Tea’s “Agar chai pasand nahi aayi, toh pure paise vaapas!” openly encouraged the public to taste their tea and then believe in the product.

Coupons are the most old and widely used technique for sales promotion. They entitle a customer to get a rebate in the price of a product or service. They are important for the provider as they help the customer to try a product without worrying about the price and can encourage the customer to switch brands. Fair and Lovely dark circle removal cream to create more product trials has coupons in the newspapers and magazines which avail you of Rs.10/- off on a 40 gm pack.

Contest and sweepstakes are the most attention drawing techniques for a customer as they are based on the skills and expertise of the consumer to compete for the prizes. Contest winners are decided by a jury of judges however sweepstakes is based on pure luck. These techniques generate interest and create curiosity for a brand but the upside to this fact is that this interest becomes the primary focus and the brand becomes the secondary focus for the consumer.

“Treat Golden Slingo Contest” to win a FREE TRIP TO HONG KONG DISNEYLAND! Have taken the kids market by a swing!

Sampling acts as a catalyst for the future buying of a consumer. Usage of brand on a trial basis incorporates little or no risk. Although, sampling is usually used for new products, it should not be reserved for those alone. It can be used in specific geographic areas where the market share is weak or people are resistant to try a new product.

However, how does one effectively design and manage a sales promotion technique in today’s world where the dissatisfaction among the customers is increasing due to dishonest sales promotion techniques? The answer is simple: The key is to follow an effective methodology to be successful and valuable in the eyes of the consumer.

The first step should always be the determination of the objective. The output that is desired is usually measurable and thus should be carefully formulated as the objective of the promotion. For e.g.: increasing repeat customers, increase customer footfall at a specified period, etc.

An appropriate promotion vehicle should follow the objective i.e. Coupons, rebates, samples, etc. are the various options available.

Using an appropriate communication channel is the next step. The communication channel can be both high budget such as an advertisement on the television and low budget such as disseminating flyers.

The last and the most important step is the evaluation of the results. Until and unless the results are evaluated to check whether the objective has been met or not, the whole sales promotion has high chances of going down the drain. Various statistical techniques such as pre-testing, concurrent testing, post testing and even testing based on previously recorded data can serve as a proficient tool for evaluation of results.

This article has been authored by Sugandha Sinha & Shobit Birla from International Management Institute, New Delhi

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