Promotion SS1 Marketing Lesson Note

Promotion is an element of the marketing mix. It consists of all communication efforts aimed at generating sales and or building a favourable attitude for an organization and its goods or services.

Promotion is no longer enough for a business to have great products. Lots of businesses have this tool. Customers need to know a lot about the product and be persuaded to buy. That is the role of promotion.

Promotion is all about communication because promotion is how the business makes its products known to the customers, both current and potential.

Communication plays an important role in marketing. Communication performs the function of informing the target customers about the nature and type of the firm’s product and services, their s can be unique benefits, uses and features as well as the price and place at which these products are purchased. The nature of marketing communication is persuasive since it aims at influencing consumer behaviour in favour of the firm’s offering. These persuasive communications are commonly called “Promotion”. In the context of marketing, promotion refers to the applied communication used by marketers to exchange persuasive messages and information between the firm its various prospective customers and the general public.

WHAT IS SALES PROMOTION?

Sales promotion is a short-term incentive to encourage the purchase or sale of a product. OR It is the array of techniques or tools used by marketers to stimulate immediate purchase or sale of a product. Sales promotional techniques include sampling, coupons, refunds, rebates, contests, price packs, price-offs and so on. It provides extra value or incentives to the sales force distribution or consumers. 

SALES PROMOTIONAL TOOLS

1. Price-off: This is a form of price reduction by firms to encourage patronage from prospective buyers.
2. Salesmen Competition: These are incentives offered to salesmen who perform better than their fellow salesmen.
3. Free Gifts: These are free products given to customers for purchasing certain items.
4. Premium Offer: These are products offered either free or at a lower price as an incentive to customers.

FORMS OF PROMOTION

The following are the forms of promotion:

1. Price-off:

One of the most powerful sales promotion techniques is the short-term price reduction. Lowering a product’s selling price can have an immediate impact on demand, though marketers must exercise caution since the frequent use of this technique can lead customers to anticipate the reduction and, consequently,  purchase until the price reduction occurs again.

2. Coupons

Coupons are sales promotions that usually offer a discounted price to consumers, which encourages trial. Most consumers are quite familiar with this form of sales promotion, which offers price savings or other incentives when the coupon is redeemed at the time of purchase. Coupons are short-term in nature since most (not all) carry an expiration date after which the value may not be received. Also, coupons require consumer involvement for value to be realized. In most cases, involvement consists of the consumer making an effort to obtain the coupon (e.g. clip from a newspaper) and then presenting it at the time of no purchase.

Coupons are used widely by marketers across many retail industries to reach consumers in several different delivery formats.

3. Rebates

Rebates are partial refunds that are offered by the manufacturers. Often, manufacturers will use mail-in rebates as incentives for purchasing. The consumer must purchase the product at full price and then fill out paperwork and mail in the receipt to receive some money back. Rebate programmes allow marketers to promote a company’s product at a reduced post-rebate price, offering substantial savings to its customers, but also requiring that a set of conditions be met to qualify.

4. Sampling

Companies will often send or hand out samples of products to attract customers who may not have purchased their products Otherwise. Beverage companies may target college students and hand out soft drinks on campuses, or a food company may set up a 2011 -grocery store so that consumers can sample their new chips.

5. Trade-in-promotions

These allow consumers to obtain lower prices by exchanging something the customer possesses, such as an older product that the new purchase will replace. While the idea of gaining price breaks for trading in another product is most frequently seen with automobile sales, such promotions are used in other industries, such as computers and golf equipment, where the customer’s exchange product can be resold by the marketer to extract value.

6. Loyalty Programmes

These are sales promotion tools used to encourage and reward repeat purchases by acknowledging each purchase made by a consumer and offering a premium as purchases accumulate. The most popular loyalty programmes today are frequent-flier and frequent-traveller programmes used by airlines, hotels, and car rental services to reward loyal customers.

7. Trade Incentives

These are sales promotions used to motivate those in the marketing channel to support a brand or company. Such incentives are directed at wholesalers, retailers and a firm’s internal sales staff. Companies use the same basic short-term reward system as a consumer sales promotion to accomplish their objectives