Types of sales promotion in marketing. Sales promotion in marketing. "Soft" sales promotion in marketing
Incentives influence the behavior of the consumer, turning him from a potential to an actual buyer. There are sales promotion operations that are of a hard type - a significant reduction in prices, the sale of an additional quantity of goods at constant prices. This is effective when it comes to a short period of time, but is expensive for the manufacturer. Currently, these sales promotion operations are of a softer nature (games, buyer contests, etc.). They are more effective in creating a positive image of the product. The combination of "hard" and "soft" sales promotion methods encourages the buyer to make an immediate purchase, and if the promotion meets the buyer's expectations and is consistent with the specifics of the product, then it inspires the consumer with sympathy, interest and loyalty at a lower cost than advertising.
Sales promotion goals
Sales promotion - a key element of marketing campaigns, is the use of a variety of, mostly short-term, incentives designed to accelerate or increase sales of individual goods or services to consumers or merchants. While advertising offers a reason to buy a product, sales promotion encourages it. Sales promotion includes various means of stimulating consumers - distribution of samples, coupons, compensation offers, price reductions, bonuses, prizes, customer rewards, free samples, guarantees, sale under certain conditions, cross (joint) promotion, demonstrations at points of sale; trade promotion - price cuts, advertising and demonstration discounts, free goods; incentives for business partners and sales staff - trade shows and conferences, sales representative competitions and special promotions. Sales promotion can serve many purposes. The choice depends on who the promotion is aimed at (target audiences). The consumer is undoubtedly the most important. The whole marketing policy is reduced to the impact on the consumer. A wide range of sales promotion techniques was created with the sole purpose of attracting the consumer to the product in the most effective way and satisfying his needs. The goals of stimulating consumers are as follows:
increase the number of buyers
increase the number of items purchased by the same customer.
The seller should not be ignored by the manufacturer, since the success of the enterprise depends on his ability and ability to sell the goods. The goal of sales promotion is to turn an inert and indifferent consumer into an enthusiast. The reseller, being the link between the producer and the consumer, is a specific incentive object that performs regulatory functions. In this case, the goals of incentives can be different:
give the product a certain image to make it easily recognizable; - increase the amount of goods entering the trading network;
increase the interest of the intermediary in the active sale of a particular brand of goods. To summarize the above, we come to a scheme representing the strategic, specific and one-time goals of sales promotion:
Increase the number of consumers
Increase the amount of goods, the consumer
Increase turnover to the targets set in the marketing plan
Achieve sales targets
Accelerate the sale of the most profitable product
Increase the turnover of any product
Get rid of excess inventory
Give regularity to the sale of seasonal goods
Counter emerging competitors
Revive the sale of a product whose sales are stagnating
Benefit from annual events (Christmas, New Year etc.)
Take advantage of a particular favorable opportunity (anniversary of the establishment of the company, opening of a new branch, etc.)
Methods of influencing sales
When planning its sales, a firm needs to have an idea of the total demand in the market as a starting point. Among other things, this involves the assessment by the firm of the impact on the demand for the corresponding product of various demand determinants. As a rule, the firm is not able to influence most of the determinants of demand. This applies, for example, to the amount of direct and indirect taxes, international crises, weather. A smaller but still significant part of the determinants of demand can still be directly affected by the enterprise. These factors are called sales impact parameters.
The Sales Promotion Institute in the UK offers the following definition of sales promotion: "It is a set of marketing tactics developed as part of a sales strategy aimed at creating added value for a product or service in order to achieve the intended level of sales and marketing objectives."
According to the definition of A. Deyan, sales promotion is a set of techniques used throughout the entire life cycle of a product in relation to market participants (consumer, wholesaler, seller) in order to increase sales in the short term, as well as increase the number of new buyers.
Stimulation is of several types.
A number of factors contribute to the growth in the form and volume of sales promotion operations. Thus, various forms of promotion have become more accessible to various businesses and consumers. Managers are better qualified, sales promotion. Fast results are possible. As competition intensifies, promotion intensifies. During economic downturns, consumers look for incentives, and supply chain participants put pressure on producers to increase promotion.
Let's note what are the main types of sales promotion developed by practice:
Trial Offers: Providing free product samples.
Benefits: consumers have the opportunity to make the most complete impression of the product; attracting new customers; faster product acceptance.
Disadvantages: significant costs; do not provide an accurate picture of the prospects for implementation.
Gifts to customers: premium sale - supplying the purchase with some kind of gift.
Advantages: contribute to the growth of sales volumes; minor additional distribution costs.
Disadvantages: there is a problem of petty theft by sales personnel; insufficient incentive for regular customers.
Souvenirs with a reminder of the product: calendars, matchboxes, T-shirts, pens, posters with the name of the company.
Advantages: insignificant additional expenses on sale; speed and ease of distribution.
Disadvantages: low degree of consumer susceptibility; the need for a certain time for the preparation of souvenirs.
Coupons for branded products: direct distribution of coupons by sales agents; distribution of coupons by mail; distribution of coupons through newspapers, magazines and their supplements.
Advantages: good selectivity; speed and convenience in the practical use of the method; high degree of consumer susceptibility; drawing their attention to the product; relatively cheap method.
Disadvantages: needs careful monitoring; it takes a long time to get any results.
Internal showcases: demonstration of goods at the point of sale, display of goods.
Advantage: effective means of attracting the attention of buyers.
Disadvantages: Mandatory participation of a sales agent is required for demonstration; the need for constant updating.
Trade discounts: discounts on the price of goods.
Advantages: increase the volume of sales of products; convenient to use.
Disadvantages: low selectivity; can undermine the prestige of the brand.
Competitions and lotteries: various premium competitions among consumers of this product.
Advantages: promotes the growth of confidence in the brand of the company.
Disadvantages: quite expensive to use; participation of a limited circle of consumers.
Let us now consider the characteristics of the types of sales promotion in general.
Characteristics of sales promotion
To the undoubted The benefits of sales promotion include:
Formation of commitment to the product
For example, customers are attracted to samples of new products or trial offers. A manufacturer can maintain brand loyalty through gifts to regular customers or coupons for branded products. Some forms of sales promotion have value and are retained by consumers: gifts, souvenirs, lottery winnings, etc.
Increased impulsive shopping
With the help of internal showcases, you can increase impulsive purchases. For example, an attractive display for batteries in a store can significantly increase sales. Excitement will be created through certain regular activities, including gifts, competitions or lotteries. Consumers are especially stimulated by expensive goods or large payouts.
Improved cooperation between producers and sellers
Channel members cooperate better with manufacturers when sales are promoted through window dressing, manufacturer coupons, discounts, joint training of sales staff, and trade discounts.
There are two disadvantages of sales promotion.
Possible deterioration of the image of the company
The image of the firm can deteriorate if it continuously stimulates sales. Consumers will view discounts as a symptom of declining product quality and believe that the firm will not be able to sell it without it.
If coupons, discounts, or other specials are used frequently, consumers may stop buying at regular prices. They may view regular prices as higher prices for products that are being actively promoted.
Shifting focus to secondary factors
Consumers may be attracted to calendars, coupons, or lotteries instead of product quality, functionality, and reliability factors. In the short term, this generates consumer enthusiasm, but in the long term, it can negatively affect the brand image and its sales, since the distinctive advantage of this product has not been developed.
It should be remembered that sales promotion supports, but does not replace, advertising, personal selling, and public opinion formation.
Advertising is one of the components marketing communications aimed at stimulating. There are many approaches to the classification of advertising, but the most common is its division into product and branded. Commodity advertising is information about consumer properties and qualities of a product; corporate - advertising of the enterprise, its successes, achievements. Sometimes branded advertising is called corporate, prestige or institutional.
- - press (newspapers, specialized magazines and general purpose magazines, books, reference books);
- - printed materials (leaflets, booklets, posters, catalogs, postcards, calendars, brochures, business cards, etc.);
- - outdoor advertising (large-sized posters, panels with fixed, running or programmed inscriptions, spatial structures, etc.);
- - advertising on transport (inside and outside vehicles, at stops, in the subway, bus and railway stations, air and sea ports);
- - screen advertising (film and TV advertising, slides);
- - radio advertising.
Sales promotion - the use of various means of stimulating the impact on buyers, sellers and intermediaries.
The choice of sales promotion methods depends on the goals.
Development The sales promotion plan consists of the following steps:
1) Goal setting
Sales promotion objectives are almost always demand-driven. They may be related to channel members or consumers.
Objectives related to channel members include securing distribution and sales, increasing dealer enthusiasm, increasing sales, and achieving cost sharing
for sales promotion.
Consumer-related goals include increasing brand recognition, increasing attempts to try a product or service, emphasizing novelty, and supplementing with other incentives.
2) Determination of the budget
When setting a promotional budget, it is important to include all costs, to estimate the costs associated with printing, postage, advertising, processing coupons by manufacturers, etc.
3) Definition of conditions for sales promotion
Sales promotion conditions are requirements that distribution channels or end users must meet in order to be eligible for promotion. These may include minimum purchases, features, and minimum age.
For example, a channel member must store the product and install advertising. The end consumer must send proof of purchase in order to receive a gift or discount.
In most cases, the moment when participation in sales promotion ends is clearly defined. Without strict conditions, promotion can adversely affect the firm.
4) Choosing the type of incentive
A firm can take advantage of a wide range of sales promotions listed above. The choice of forms of sales promotion should be based on factors such as the image and goals of the company, costs, participation requirements and enthusiasm of channel participants, and the perception of sales promotion methods by end consumers.
It is imperative that sales promotion activities are well coordinated with other elements of promotion. It is especially important to link advertising and sales promotion plans. sales staff must know in advance about all forms of incentives and be prepared for their implementation. Special events, such as the appearance of a major celebrity, should be brought to public attention. Sales promotion should also be linked to the activities of channel participants.
5) Evaluation of success or failure
Evaluating success or failure is an important point in any promotional event, so let's take a closer look at this point.
Sales promotion effectiveness
Evaluating the success or failure of many firms is fairly straightforward, as it is closely related to performance or sales. By analyzing the data before and after, it is easy to determine the usefulness of incentives.
For example, the effectiveness of a trade show can be measured: by counting how many contacts were received at the same time, how much sales were achieved with the help of these contacts, and what are the costs per contact; through customer feedback through the sales staff and determining how much literature is handed out at the show.
Similarly, companies can test changes in their sales as a result of dealer training programs.
Coupon-using firms analyze sales and compare coupon redemption rates with industry averages.
Surveys of the attitudes of channel participants and end users show the degree of satisfaction with various forms of incentives, the possibilities for their improvement and the impact of incentives on the image of the company.
When starting to promote sales, you need to remember the following.
- 1. Sales promotion is effective only when its application is linked to the life cycle of the product and is consistent with clearly defined goals.
- 2. Relatively short stimulation is more effective. The short duration of the event encourages the consumer to take advantage quickly. For example, in the case of office supplies, the incentive could be for one to two months. A product purchased once a year needs short-term stimulation (4-6 weeks) at the moment when the purchase is most likely.
- 3. Incentive measures and product should be closely linked. Stimulation should become an integral part of either the product itself or its micro- and macroenvironment (a store or a group of products of the same brand).
In order not to damage the image of the product, it should be remembered that promotion measures must be consistent with the real state of affairs with sales.
With direct marketing, the manufacturer or his employees are directly involved in the dissemination of the necessary information, the implementation of other actions.
Direct marketing includes:
- 1) direct advertising - personally delivered advertising materials and direct mail advertising; traditional means include personal relationships with clients, public speaking, use of recommendations;
- 2) personal sale - the sale of goods directly to the buyer at his home, if these are goods for personal use, or at the enterprise, if they are for production purposes; personal sales - this is primarily the work of salesmen, sales agents, showroom and exhibition personnel with each consumer, demonstration of goods in terms of use;
- 3) telemarketing - persuading, selling, making transactions or arranging them, and even after-sales service using video text, telefax, computer, telephone;
- 4) mail order trade according to catalogs and price lists - persuasion of the buyer by all possible means to send or transfer money for the purchase of goods, the description of which is given in the advertisement.
Direct marketing is an important part of the modern marketing system. Abroad direct marketing as a method of promoting agricultural and food products very popular. In Russia, the dynamics of development direct marketing is generally positive, although its rate is slightly lower than in developed countries. If a few years ago, mostly only large companies regularly used direct marketing, now the trend has changed. Probably, the fact is that in the past, much less money was allocated for marketing, and most managers did not understand its very essence.
Benefits of direct marketing:
- 1) In direct marketing, the longer you work with a client, the better the result, long-term and trusting relationships arise.
- 2) With a full-fledged program, the effectiveness of direct marketing far exceeds the effectiveness of advertising. Many commodity producers and intermediaries were not ready for long-term campaigns.
When they decided to try direct marketing, they limited themselves to, for example, sending out two hundred letters, counting on good results.
However, in most cases, a one-stage action does not cause a real response. It is only 3%.
3) Direct marketing is most effective when: the company is small and the possibilities of carrying out work on the full range of marketing communications are limited, buyers are concentrated in one territory, a demonstration of the product in action is required, the cost per unit of production is high, the product cannot be sold in any other way (acquired at regular intervals, requires adaptation to the needs of the customer, is included in a group that is exchanged for new goods upon delivery of old ones and making an appropriate surcharge).
Some forms of incentives, such as calendars, pens, special events, are more difficult to evaluate due to their less clear goals. In this case, a special marketing research should be carried out.
Sales promotion - the use of a variety of incentives designed to hasten or enhance market response.
These include stimulating consumers - this is the distribution of samples, the use of coupons, offers for a refund. Discounted sales, awards, competitions, credit cards, and demonstrations are also stimulants. It is also necessary to stimulate the sphere of trade.
Appropriate offsets for the purchase, the provision of goods for free, offsets to dealers for the inclusion of goods in the nomenclature. They use joint advertising, awards, dealer contests. It is also important to stimulate your own sales staff.
Sales promotion is most effective when combined with advertising.
Sales promotion tasks. The objectives of sales promotion stem from the objectives of marketing. Specific incentive objectives will vary depending on the type of target market.
Among the tasks of stimulating consumers are encouraging more intensive use of the product and buying it in larger packaging, encouraging non-users to try it, attracting those who buy competitors' brands to it.
In relation to retailers, this is encouraging them to include a new product in their assortment, to maintain a higher level of stocks of goods and related products.
In addition, it is undermining incentives that competitors use, building brand loyalty among retailers, penetrating new retail outlets with their product. As for own sellers, this is the encouragement of their support for a new product or new model.
Sales promotion tools. The solution to the problems of sales promotion is achieved by a variety of means. When choosing them, they take into account the type of market, and specific tasks in the field of sales promotion, and the current market situation, and the profitability of each tool. Consider the main means of sales promotion.
1. Samples, coupons, discount packages, awards and credit cards. These are the main means on which consumer promotion activities are built.
Distribution of samples - is the offering of a product to consumers free of charge or for trial. Samples can be distributed on a door-to-door basis, sent by mail, distributed in a store. They can be given when buying any other product, beaten in an advertising offer. Sample distribution is the most efficient and costly way to introduce a new product.
Coupons are certificates that entitle the consumer to a specified savings on the purchase of a specific product. Coupons can be sent by mail, attached to other products, included in advertisements. They can be effective in promoting the sale of a mature branded product and in encouraging consumers to try out a new product.
Provide for the sale packaging at a reduced price, those. the consumer is offered a certain savings against the regular price of the goods. This can be a package at a new price, when one product packaging option is sold at a reduced price (for example, two packs for the price of one) or a kit package when a set of two related products is sold (for example, a toothbrush and toothpaste). Information about the preferential price is placed on the label or on the packaging of the product.
This method is better at stimulating short-term sales growth than coupons.
Prize - is a product offered at a fairly low price or free of charge as an incentive to buy another product. The on-package bonus accompanies the product, either inside or outside the package. The packaging itself can also act as a premium if it represents reusable e-marketing. Free postage is an item sent to consumers who provide proof of purchase of the item, such as a box lid.
Credit cards - This is a specific type of premium that consumers receive when they make a purchase. They can exchange the coupon for goods at special exchange offices. Merchants who use credit cards first tend to attract new additional customers. However, credit cards often turn out to be a burden for everyone.
- 2. Exposition and demonstration of goods at points of sale. In places of purchase or sale of goods, expositions and demonstrations are arranged. Unfortunately, many retailers don't like to mess around with the display fixtures, signs, and posters they receive by the hundreds every year from manufacturers.
- 3. Stimulation of the sphere of trade. To attract wholesalers and retailers to cooperate, manufacturers use a number of techniques. The manufacturer can provide a discount for each additional box of goods purchased in a certain period of time. The offer encourages dealers to purchase more items or a new item they would not normally buy.
By encouraging the inclusion of a product in the nomenclature, the manufacturer can compensate the dealer for the cost of presenting this product to the public. Advertising credit offsets dealers' advertising efforts. The credit for the arrangement of the display compensates for the efforts of dealers to organize special displays of goods.
A manufacturer can offer a free product to an intermediary who has bought a certain amount of goods from him. He may offer a bonus in the form of cash or gifts to dealers or their salespeople for efforts to promote their product. The manufacturer can give free souvenirs with the name of the company, such as pens, pencils, calendars, notepads, ashtrays.
4. Contests, lotteries, games. The firm organizes contests, lotteries, and games through which lucky and particularly diligent consumers, dealers, or salespeople who buy a lot of goods can win something - a cash prize, a travel package, or a product.
The competition requires consumers to submit something, such as poetry, anecdotes, drawings. A special jury evaluates the submitted material and announces the winner.
A sales competition is a competition held for a firm's dealers or sales staff to stimulate sales efforts.
Sales promotion program. With regard to a comprehensive incentive program, there are a number of additional decisions that must be made by the marketing planner.
1. Intensity of stimulation. A decision needs to be made about how much incentive to offer.
A certain minimum of stimulation is necessary for the success of an event. There is a threshold level of effort below which there will be no results at all. A very strong incentive will generate more sales, but at a declining rate of sales growth.
- 2. The terms of participation. Incentives can be offered to everyone or only to some special groups of people. So, bonuses can only be offered to those who donate box lids.
- 3. Means of disseminating information about the incentive program. You need to decide how to disseminate information about your incentive program, to spur interest in it. Discount coupons can be distributed through stores, by mail, or through advertising.
- 4. duration of the incentive program. If the duration of a promotional activity is too short, many consumers will not be able to take advantage of the benefits offered. If the event is too long, the proposal will lose its effect, pushing for immediate action.
- 5. Timing for sales promotion activities. It is necessary to choose the calendar dates for the implementation of promotional activities.
These terms will be guided by production, and the sales service, and the distribution service. In addition, it may be necessary to carry out previously unplanned activities, which will require the establishment of interaction in a very short time.
6. Budget for sales promotion. Estimates for sales promotion activities can be developed in two ways. You can select specific measures and calculate their cost. More often, however, appropriations are defined as a percentage of the total budget.
Preliminary testing of the sales promotion program. Wherever possible, all sales promotions used should be pre-tested to ensure they are appropriate and provide the necessary incentives.
Implementation of the sales promotion program. For each sales promotion activity, the firm should develop a separate plan covering both the preparatory period and the period active work. The preparatory period is the time for preparing activities.
Evaluation of the results of the sales promotion program. Evaluating the results of a sales promotion program is critical, but it is rarely given the attention it deserves. Several methods can be used. More often than others, they use the method of comparing sales indicators before, during and after the incentive program.
Let the company occupy 10% of the market before the campaign, and 20% during the program. Immediately after the end of the campaign, the market share fell to 5%, and after a while it rose to 15%.
At the end of the campaign, sales fell as consumers spent some time stockpiling. Stabilization at 15% indicates that the firm has acquired a certain number of new users of its product. If the market share did not change, this would mean that the incentive program did not produce a long-term result.
When additional information is needed, consumer surveys can be conducted to find out how many of them remember promotion campaigns, what they thought at the time of their implementation, how many took advantage of the benefits offered, how the campaign affected their subsequent buying behavior in terms of brand selection.
Sales promotion activities can be evaluated using experiments, during which the significance of the incentive, the duration of its action, are changed.
It is clear that sales promotion plays an important role in marketing the promotional mix as a whole. Its use requires a clear statement of objectives, the choice of suitable means, the development of a program of action, its preliminary testing, implementation and evaluation of the results achieved.
To stimulate means to set in motion. This is the task assigned to this means of communication.
In general, the term "stimulus" comes from the Latin word "stimulus" - influence. The word "stimulus" in ancient Rome was called a pointed stick, which drove the mules. Of course, in our time, no one drives buyers into stores with a stick and no one forces a person to make a purchase. However, knowing the psychological characteristics of human actions and the motives that drive them (and these are, as a rule, rational motives), it is possible to create such conditions when a person will gladly make exactly the purchase that manufacturers or retailers expect. If such conditions are acceptable to many buyers, the sale of a certain product is really quickly set in motion.
Sales promotion is short-term incentive measures aimed at increasing sales.
It is the episodic, short-term impact that is the main difference between sales promotion and other means of communication. However, sales promotion is not a solid means of increasing sales, like advertising, so it is often used in conjunction with it to enhance its effect.
The history of these concepts goes back to the 50s of the XX century. It is said that it was at this time that one of the leaders of Procter @ Gamble, making an estimate, calculated all the costs associated with advertising in the press, on television, etc., and summed up the final line, forgetting about the costs of the promotion, giving away free samples and other promotional activities. Therefore, he had to enter these figures below the line. Since then, advertising has traditionally been called ATL - above the line (above the line), and sales promotion - BTL - below the line (below the line). However, in some countries, sales promotion costs are part of the advertising budget.
In recent years, attention to sales promotion has been constantly growing. This is due to the following reasons:
There are a number of legal restrictions on the advertising of certain types of goods (drugs, tobacco products and alcoholic beverages, etc.), as well as on the use of comparative advertising;
The growth of competition requires the search for new forms of attracting the attention of consumers to the product;
Impulsive purchases (according to the results marketing research 70% of buying decisions are made directly on the trading floor)
Ability to evaluate the effectiveness of sales promotion measures.
Sales promotion is complex and is aimed at consumers of goods, resellers and the company's own staff. Depending on the named objects of stimulation, the goals of sales promotion are also distinguished (see Fig. 8.5).
The goals listed below are strategic, that is, aimed at the long term.
The tactical (current) goals of sales promotion include:
Accelerating the sale of goods that are not in demand,
Give regularity to the sale of non-seasonal goods,
The revival of trade
Countering competitors and the like.
Rice. 8.5. Sales promotion goals depending on the objects of promotion
Depending on the place of implementation and the focus of the event, general, selective (selective) and individual stimulation are distinguished (table 8.3).
Table 8.3
Types of Sales Promotion
|
stimulation |
Place of application |
peculiarities |
||
|
stimulation |
place of sale |
subject matter (company anniversary, store opening, etc.) |
general revival of trade |
|
|
selective stimulation |
a certain place that advantageous position compared to similar products (for example, at the beginning of a row or rack, in a certain place on the sales floor) |
usually carried out on the initiative trading network in relation to goods that are not in demand for various reasons (out-of-season items, obsolete items, obscure items, etc.) |
speed up "Slow" |
|
|
individual stimulation |
places of general display of goods |
carried out at the initiative of the manufacturer; the consumer learns about the event directly at the point of sale (From the promoter, thanks to special signs, advertisements, etc.); used, as a rule, when a new product appears or to distinguish a product from competitors |
acceleration certain products |
|
Sales promotion has its advantages and disadvantages.
To the benefits Sales promotion can include:
1) the ability to quickly influence consumer behavior;
2) guaranteed increase in sales of goods;
3) the possibility of evaluating the effectiveness of the activities carried out;
4) the sensitivity of all categories of consumers to the activities that are carried out;
5) the possibility of rapid preparation in a short time.
To disadvantages Sales promotions include:
1) does not contribute to the formation of a permanent circle of consumers of a certain brand, switching their attention from one product to another;
2) transfers the attention of consumers to the quality of the goods, its brand to the price of it;
3) contributes to the postponement of the purchase to the next promotion;
4) operates on a short-term basis;
5) sometimes requires significant costs for implementation.
Consumers are the object of special attention of manufacturers, so a lot of effort is spent on the part of producers of goods to encourage consumers not only to buy goods, but also to purchase as many goods as possible.
Sales promotion methods aimed at consumers are conditionally divided into two groups: price promotion methods and non-price promotion methods.
The price incentive method is based on the fact that the main factor that encourages the purchase is the price. Any person, regardless of the level of his income, is trying to save his own. The advantages of price incentives are the ability to:
1) quick implementation without prior preparation (this is very important when you need to quickly respond to competitors' actions or make price adjustments),
2) evaluation of the effectiveness of ongoing activities.
The disadvantage of this type of stimulation can be considered that it does not allow to form a circle of regular customers of the company, but transfers the buyer's attention from one product of another brand to another. Also, sometimes the sale of a product slows down as buyers wait for the next promotion.
Methods of price stimulation are carried out in various forms (Fig. 8.6).
Rice. 8.6. Methods and types of sales promotion aimed at consumers
Price discounts - one of the most common methods of stimulating consumers. It can be carried out both at the initiative of the trade network, and at the initiative of the manufacturer.
Price reduction at the initiative of the trading network is carried out:
During specialized exhibitions and fairs;
By regularly reducing prices for certain types of products, the list of which is formed daily (weekly). The conditions of the promotion and the list of promotional goods are published in specialized publications of the trading network (for example, in the newspaper of the Klass supermarket) under the headings "Product of the hour", "Product of the week" or directly on the trading floor. Since such promotions operate regularly (during the year), this makes it possible to increase the overall turnover and attract regular customers interested in constantly receiving certain savings;
By identifying a specific group of products that are subject to discounts for a certain period. In this case, the promotion is not valid regularly, but for a certain period. At the same time, the number of promotional goods is limited. As a rule, information about the conditions of the planned measures is distributed in the media, through external and direct mail advertising.
Price reduction at the initiative of the manufacturer is also carried out for the selected group of goods with appropriate advertising support. At the same time, the distribution network in which the goods are presented is provided with certain discounts.
There are three ways to directly discount the price
1) a simple price reduction (when the old price is indicated on the price tag, which is crossed out, and a new one is placed next to it - a reduced price)
2) percentage discount (when the packaging indicates, for example, "- 10%" or "- 20%")
3) a discount with the definition of its size in monetary terms (for example, "- 50 UAH").
The advantage of such methods is the ease of implementation: only two price tags are needed for the implementation of the event - with the old (crossed out) price and with the new one.
Special prices (or small wholesale sale). This is a type of incentive in which discounts do not apply to an individual product, but to a small batch of goods. The purpose of this type of incentive is to increase the volume of consumption of this product. The benefit for the consumer when buying is that by buying more of the product than he expected, he saves a certain amount of money, as well as his time, since he will have a certain stock of goods at home. This is especially true when the purchase concerns everyday goods (soap, dishwashing sponge, handkerchiefs, etc.).
In this case, goods sold in small wholesale are combined in one package made of polyethylene film. There are several types of this form of incentive:
1) a general reduction in the price of the entire batch (for example, 5 UAH from ten cans of canned food)
2) one commodity unit from the batch is sold free of charge (for example, every tenth can of condensed milk is free)
3) a general reduction in the price of packaging (for example, a package of 10 dishwashing sponges costs UAH 22.24, while a separate sponge is sold at a price of UAH 3.3).
To implement this activity, the following conditions must be met:
It is necessary to find a place on the trading floor, which is applicable for the sale of small consignments of goods;
The goods must also be sold at retail at regular prices.
United sale. Applies to goods that complement each other, but neither of which is a necessary component of the other. In this case, the price of the set is set below the sum of the prices of the goods. The implementation of this event is similar to sales promotion through special prices.
The advantage of this type of incentive is that it allows
Combine an already known product and a novelty product;
Combine the product is in demand and "slow" product;
Increase sales volumes in the presence of additional goods (watch - battery, camera - film).
Additional items are free. This form of incentive provides a means of offering a product;
By the piece (10 pieces 1 piece for free)
Percentage (+10% free)
In terms of weight (+ 200 g free, + 5 ml free).
This method of stimulation is quite effective, since psychologically the offer to receive 20% of the product for free affects the consumer with more than a 20% discount on the product, although the latter is more profitable.
The implementation of the method requires two types of additional costs:
Free provision of a certain amount of goods;
New product packaging.
Because these costs are significant, this method incentives are usually used by large firms.
Distribution of coupons (couponage). This type of incentive is that the consumer is offered a coupon that gives the right to receive a discount when buying a product.
The discount can be in the form of a certain amount of money, a percentage of the price of the product, or a reduction in the price of some other product in the terms of the purchase of the product specified in the coupon.
Coupons can be funded by both the manufacturer and the retailer. When financing coupons by the manufacturer, they can be redeemed at any point of sale where the promotion is valid. If the coupon is funded by a retailer, it can only be redeemed at certain retail outlets listed in the advertisement.
This form of stimulation is most effective if the product is just entering the market and it is necessary to encourage the consumer to try it, the sale of the product has decreased significantly and measures must be taken to restore demand for the product.
Price reduction with a delay in obtaining a discount.
These measures include:
1) simple reimbursement with a delay - the price reduction is not made at the time of purchase, but after the coupon is sent to the specified address. In this case, the discount is assumed in the form of a certain amount of money, which is returned by bank check. Each family is generally eligible for a one-time discount;
2) refunds in the presence of several proofs of purchase (cash-refund) - in this case, a more substantial refund is provided. It is mainly used to form a circle of regular customers of a certain brand. In this case, the coupons are placed on the package and must be cut out.
3) joint compensation with a delay. With this form, several products from different manufacturers are combined in one coupon.
In this case, the following options are possible:
1) the consumer is invited to choose one or more products that are presented in the coupon;
2) the consumer is invited to try all types of goods that are presented in the coupon, and only then can they get a big discount;
3) the consumer is invited to purchase various goods for use as gifts and receive a significant discount;
4) the consumer is offered to purchase two completely different goods sold in different outlets and receive a certain amount of money.
A kind of price reduction with a delay is a price reduction associated with a public benefit event. In this case, after presenting, for example, 10 proofs of purchase, the consumer receives UAH 10,000, while UAH 100 will be transferred to the AIDS relief fund.
The method of price reduction with a delay provides that the manufacturer of the product carries out this event, guarantees the return of a certain amount of money to the consumer who purchased this product. The peculiarity of this technique is that the consumer perceives the return of money as a reward for the purchase. Thus, the manufacturer is trying to achieve consumer loyalty for a particular brand.
The advantages of this method is the following:
1. ease of distribution and low cost of coupons;
2. the possibility of evaluating the effectiveness of the measures taken;
3. efficiency in the fight against competitors, since it requires a certain number of repeat purchases;
4. increase in turnover, since the condition for reimbursement is the purchases within a certain limited period.
Despite the noted advantages, this method is not yet used in Ukraine.
Offsetting It is used in the form of an exchange of an old model of goods for a new one with a small surcharge. Common when selling expensive goods (eg mobile phones, leather outerwear, etc.). The method is very attractive to the consumer, since he has the opportunity to get rid of the old product and get a new product with a small surcharge.
Methods of non-price incentives differ from the method discussed above in that the consumer, when (or after) purchasing a certain product, can receive additionally somewhat useful (some additional benefit) that is not directly related to the price of the product itself.
Non-price incentive methods include three groups (Fig. 8.7).
To the first group applies stimulation in kind. This type of incentive includes various awards and free samples.
There are the following types of awards:
Direct premium - the buyer receives it at the time of purchase of the goods.
It can be: in the product itself; attached to the product packaging; issued to the buyer at the checkout at the time of settlement.
Rice. 8.7. Ineffective incentive methods There are such types of direct bonuses.
Prize for children often represents a variety of toys, stickers, puzzles, which are often associated with a certain smell (for example, the World Cup) or are associated with popular cartoon characters. As a rule, they are in the packaging of the product or in the product itself (for example, a children's chocolate egg "Petrushka" with a plastic toy inside). Moreover, in order to increase sales, the manufacturer provides toys "with a continuation" (for example, in each chocolate egg "Girlfriend" there was a plastic representative of a squirrel family. According to the above figure, the children were asked to gather the whole family together, for which it was necessary to buy so many eggs until all the toys were full).
Useful premium - addressed to adult buyers and aimed at purchasing the product in which it is contained. Such an award must be original and useful. Such a bonus may be in the packaging of the product (eg, a keychain, a magnet in an Ahmad tea package) or may be attached to the packaging (eg, Sunsilk shampoo and hair cream).
Award, gives pleasure - is addressed to all categories of consumers and reflects the desire of sellers to create a new style of relationship with consumers, bringing them the joy of receiving gifts. At the same time, they can receive a gift at the checkout at the time of purchasing the goods (for example, when buying a "good of the time"), or they can receive it in exchange for the corresponding number of points that they once accrued to the discount card, depending on the amount of money spent.
Postponed premium - the buyer receives it by mail after sending proof of purchase to the address indicated.
Product packaging. Some Marketing Professionals separate view premiums consider original, convenient, attractive packaging that can be used in a certain way after the product has been removed from it.
Free samples - these are the so-called samplings and tastings.
Sampling (from English, sampling) is the free distribution of trial samples of goods among the target audience.
Tasting or testing - (from English, testing) - the opportunity to try the product for free, to feel for yourself the consumer qualities that the manufacturer claims.
Samples of goods are distributed in limited quantities, not masses of commercial value. At the same time, it seems that it is necessary to apply paint, it is not washed off, the inscription: "Free sample, not for sale."
It is believed that the number of such samples should exceed 7% of the sale price of the goods (at cost). If this rule cannot be applied to a certain group of goods (for example, to cars), they can be provided for a short period as a whole (mileage test).
Forms of distribution of free samples can be:
2) distribution at points of sale (for this, promoters or the manufacturer's own personnel are involved);
3) distribution through the print media (for example, Nivea face cream in the magazine "the only one").
Distributing free samples is very effective method incentives, because consumers have the opportunity to try the product without spending money. Thus, the risk associated with the fact that the product, the purchase of which a certain amount of money is spent, is not liked for some characteristics, is minimized.
When choosing this form of incentive, the manufacturer should remember that the product that is sold as a sample must have unique properties and impeccable quality in order to please the consumer from the first test and make him want to purchase this product, and subsequently become a regular buyer of the products of this company and recommend it to others.
Second group types of incentives related to non-price methods, is an active offer - a type of incentive that provides for the active participation of the consumer.
The active offer includes contests, lotteries and games.
Contests require consumers to participate in the competition for prizes based on the results of completing a certain task. At the same time, it is important that the victory in the competition is not due to a fluke, but thanks to the intellect, quick wit, observation, quick wit of the participants or their artistic abilities, sense of humor, and the like.
There are the following types of competitions:
1. contests initiated by resellers (e.g. window dressing contests)
2. competitions organized by the press (these competitions are held on historical, economic, technical topics in order to retain regular readers and attract new ones)
3. competitions organized by manufacturers.
Competitions organized by manufacturers are divided into types:
Competitions for children (for example, for the best essay, the best drawing on a given topic). In this case, the prizes are most often toys;
Technical competitions - held, as a rule, for specialists of professionals in their field (for example, a competition for the best cafe design project)
Family competitions - held for family members in the form of quizzes, crossword puzzles. In this case, participants must have proof of purchase. Most often, such competitions are organized by service companies and manufacturers of consumer goods. Prizes in such competitions are usually Appliances, travel vouchers, cinema tickets, cars, apartments, etc.;
Contests during mass entertainment events related to a certain event (for example, the ice cream festival, which was held by the Khladik Khladik cold storage facility).
Since the competition is expensive and time-consuming procedure, experts advise holding them no more than once a year.
Lotteries and games provide for the participation of consumers in the drawing of prizes. These are recreational activities that bring together people of different ages, different abilities, with different intellects. In this case, the result is obtained randomly. The gaming nature of the event causes excitement among the consumer, since at the end of the action many attractive prizes and several super prizes are promised. Therefore, the opportunity to win a prize is a strong incentive to purchase promotional goods.
The following types of gaming incentives are distinguished.
Lotteries - these are measures that provide for the random selection of winners. Often used by large shopping malls and firms that distribute goods by mail.
Games, based on the theory of probability (instant lotteries) - participants receive cards with the image of a certain number of any elements that are hidden under an opaque film that must be erased in order for the result to appear.
Lotto - an event that involves the need to combine several parts of one message (for example, an action that was held by trademark coffee "Jockey": "Warehouse map and get a ticket to Egypt together").
A well-planned and organized competition or lottery creates high consumer interest and generates interest even in products that were not in demand before.
To the third group non-price incentive refers service to which the provision belongs:
1) consumer credit;
2) free services related to transportation, installation, adjustment of equipment;
3) free maintenance services;
4) free repair services for a certain period;
5) the ability to return the product and get money for it if this product did not suit the consumer for some reason;
6) discount cards (used to form loyal customers of this outlet. They can be used together with a savings program - the larger the purchase amount, the greater the discount)
7) services for packaging and packaging of goods - are carried out at the request of buyers in volumes convenient for them.
Intermediary incentive methods
Resellers occupy an intermediate position between the producer and the consumer. Intermediaries can also be distributors who themselves contribute to the rapid sale of goods, and therefore are engaged in stimulating consumers. Therefore, the manufacturer, through incentives, tries to:
Persuade intermediaries to purchase a certain product for sale;
Become a permanent distributor of these products, using advertising tools for this;
Interested in buying large quantities of goods.
Price and non-price methods are also used to stimulate resellers (Figure 8.8).
Rice. 8.8. Reseller Incentive Methods
Methods of price incentives for resellers include:
1. discounts for the quantity of purchased goods (most often applied at the growth stage);
2. discounts for entering goods into catalogs (provided, as a rule, at all stages of the life cycle and range from 5 to 25% depending on the volume of the order;
4. providing coupons or loyalty cards that entitle you to financial benefits when you purchase a product.
Methods of non-price incentives for resellers include:
1. distribution of free product samples (an intermediary who will try the product himself and be satisfied with it will better promote it on the market);
2. providing gifts (free goods) to those intermediaries who purchase goods in large volumes (it is important that the gift be of significant value and usefulness for the intermediary);
3. distribution of souvenirs with company logos;
4. holding contests, lotteries and the like.
Methods of stimulating the company's own sales staff.
Stimulating your own sales staff is very important, since it is he who directly communicates with consumers and the further movement of goods depends on his active or passive actions, the formation of a circle of supporters of the goods of this company and, in general, regular visitors to this outlet.
Methods aimed at stimulating your own sales force are basically the same as methods for stimulating resellers. This is, first of all, price promotion(in the form of bonuses for the achieved results of work for a certain period), as well as methods of non-price incentives:
Gifts (free goods);
Reward for vouchers;
Accrual of bonus points, which can then be exchanged for a gift according to the catalog;
Awarding based on the results of competitions.
Speaking of stimulation, one should not forget about such a strong tool as moral stimulation:
Free professional development;
Opportunity for career growth upon achievement of certain indicators in work;
Assignment of the title "Best Seller";
Congratulations on your birthday, as well as other holidays and significant events in the life of the seller), etc.
Sales promotion (sales promotion) - management of communication and stimulation of buyers and resellers to create conditions for the sale of products or services, incentive measures to encourage the promotion of goods / services through the marketing channel and the purchase of goods / services by buyers.
Sales promotion is a complex for promoting the subject of marketing, which is a system incentive measures and techniques that are usually short-term and aimed at encouraging the purchase or sale of goods. This incentive is a complex marketing activities and trade management to push the product / service along the entire route of the distribution channel - from the manufacturer, through the distribution channels to the consumer - in order to accelerate the sale of goods.
Purpose of sales promotion- acceleration of the sale of goods, an immediate change in the behavior of the consumer and the intermediary in the trade channel. The essence of sales promotion is that an aura of preference is created for the product, and thus stimulation turns a potential consumer into a buyer, and an intermediary into a participant in the distribution channel, one way or another, interested in promoting the subject of marketing.
The task of sales promotion:
- short-term increase in sales volume;
- Smoothing temporary fluctuations in sales;
- increasing the number of new players in the sales channel (marketing channel);
- Encouragement and motivation of any action on the part of consumers or other entities (for example, resellers or their own sales staff).
- removal of the reasons for the inhibition of sales in the sales channel.
- The consumer is the most important part, and all marketing efforts are directed to him.
- Resellers (distributors, dealers, sales agents) are a natural intermediate link between the manufacturer and the consumer;
- Sales staff (purchase management, sales floor staff) - an intermediate link between the subject of marketing at the point of sale and the buyer;
- Reference groups (opinion leaders, brand ambassadors, etc.) are persons who influence the choice of goods, direct the choice, determine and shape the taste of the consumer, which has a more or less direct influence on him.
Sales promotion has two directions:
- Trade promotion (trade promotion)
- Consumer promotion (buyer stimulation)
Trade promotion - sales promotion of the trade commodity distribution network, marketing means of influencing the sales channel, stimulating the sale of goods through the channel. Includes both economic methods of influence and non-economic ones:
- work to inform wholesalers and retailers about the product,
- merchandising and ensuring presence in the distribution network and at points of sale;
- registration of points of sale and placement of POS-materials;
- building relationships with participants in the commodity-conducting channel;
- formation and stimulation of interest in promotion.
Consumer promotion - sales promotion in the distribution channel at the outlet level and aimed directly at customers. Cm.
