“Sales promotion is the specific element of communicating the value of your brand, products, and services to targeted customers,” – Neil Kokemuller
Businesses employ various sales tactics to increase market traction; one of the many such tactics is to create sales promotions for customers. This practice hinges on giving away promotional materials and free products to customers in an effort to boost merchandise sales. Sales promotions are predicated on the human tendency to acquire a higher number of items for a price that is deemed disproportionately low. For instance, a fast moving consumer goods maker may choose to boost sales by giving away two items free of cost to every customer that buys a certain number of products. This tactic offers a temporary boost to the manufacturer’s sales chart and affords the manufacturer an opportunity to forge ahead in terms of market share. The customers reap the benefit of value for money, or in other words, a lower aggregate price for each piece of acquired merchandise.
We must note that promotions for customers centre round the incentive of registering higher sales than competitors. Manufacturers, stockists, and retailers should bear in mind that busy festive seasons are the best time for sales promotions. This tactic implies a deep knowledge of human psychology. Most consumers work for a living through the year and a festival is a good time to spend hard earned dollars. Retailers and businesses typically tend to offer promotions for customers at such times to spur spending habits. Consider this: an electronics retailer may inaugurate a new showroom during a festival and may offer a set of two music compact discs free for the first two hundred customers. This effort at spurring commerce may be widely advertised and may result in a flood of shoppers during the initial days of business at the new showroom. The electronics retailer gets his new business off to a flying start, while the lucky customers are happy to receive the freebie. We note that certain commercial considerations may have operated behind the scenes. The said retailer could have concluded a mutually beneficial business arrangement with a music producer to supply the sets of compact discs, and the freebie would help introduce the new music to many customers free of charge. This arrangement demonstrates that sales promotions can operate in more than one dimension.
Corporate dictates can provide the impulse to launch promotions for customers. This indicates that a corporate chieftain may not be happy about the sales charts emanating from recent calendar quarters and may challenge his lieutenants to ignite a selling deluge. The resulting actions may see the marketing department unleash a surfeit of selling tactics, the most prominent being sales promotions in the form of flat discounts, special offers, limited time trial offers, branded accessories as gifts, free shipping offers, among others. These forms of promotions for customers need not adhere to any set time schedules or particular points in the calendar; these promotions may follow a diktat from corporate headquarters. However, such selling strategies may follow business intelligence inputs that indicate the launch of rival products and services. The incumbent brands may choose to put up a fight by embarking on massive promotional offers in a bid to guard their market share, while fending off the new market entrant.
We must note that certain business exigencies may force corporate enterprises to launch sudden sales promotions for customers. Consider this: an unforeseen change in government rules and regulations may force a certain category of two wheelers to be pulled from the markets. The manufacturers, sellers, stockists, distributors, and retailers of the said vehicles may be caught off guard by the regulatory announcement and may seek to ameliorate the circumstances by rolling out heavy sales promotional offers. Customers may be offered significant discounts and free riding accessories in an effort to spur sales. We could say that this selling strategy represents a knee jerk approach to commerce, but the corporate organization and its sellers may have no recourse in the face of precipitate, yet unyielding regulatory interventions. Aggressive sales promotional tactics may be the only way forward because the other alternative is for the business enterprise to incur substantial losses in the form of sunk costs and unsold inventory. We note that sales promotions are a useful tactic to be resorted to under such circumstances.
Product promotions remain a useful device during certain days of the year – such as Father’s Day, Mother’s Day, among others. Wily business enterprises may resort to offering promotions for customers in an effort to tap into the dollars earmarked for spending on such occasions. Grooming products, electronic gadgets, kitchen appliances, footwear, formal and traditional attire, etc. may be marked for selling through promotional offers. The offers may be inaugurated a week before the aforesaid days and then the retailers are ideally positioned to harvest extra sales as customers troop into shops and showrooms to acquire the said merchandise. We note that the merchandise items and promotional offers mentioned in this paragraph are tied to family sentiments and therefore, budgets may not necessarily be a constraint in such transactions.
Marketing departments can use the end of the month to push the sales of slow moving items through sales promotions for customers. We note that most customers tend to exhaust their shopping budgets by the last week of the month and therefore, a sales promotion at a retail destination may appear as an enticing opportunity to gain good value for money. For instance, a certain brand of detergent that failed to win market traction can be packaged to move faster off the shelves. Two detergent cakes can be tied to a third piece and the customer has to pay for only the first two. We note that detergent cakes have a long shelf life and therefore, the customer loses nothing by availing the special offer. At the end of the day, the retailer gets the benefit of creating vacant space on his shelves for fresh products, while the customer gets an extra slab of detergent for his or her hard earned money. This tactic is widely used in retail establishments all over the planet and bears the promise of future performance.
In the preceding paragraphs, we have discussed the various methods that can be used by a commercial organization to push product sales. The modern business organization must invest sufficient time, effort, and resources to determine the timing of the promotional sales offers in an attempt to reap the maximum benefit, while delivering solid business value to the paying customer. Promotional offers represent a barometer of business and consumer confidence that can help industry observers to gauge the various trends operating in a market. These offers also help enterprises to gauge the customer’s mood and his or her ability to wield effective spending power. The use of promotional offers during the festival season is a useful vehicle to launch new products and observe their traction in the markets. That said, we note that businesses must continuously innovate in the creation of customer delight through such offers. Happy customers tend to be loyal to businesses and therefore, businesses must deploy promotions for customers in the interests of building long term business relationships.