3.5.2 Price
3.5.4.3 Sales promotion Definitions
3.5.4.3 Sales promotion
• direct support of sales staff
The disadvantages Lancaster and Reynolds (2005:199) cite are as follows:
• price-discounting can cheapen brand image
• short-term advantages only
• difficultyin communicating brand message
• can cause problems with retailers who might not want to co-operate
Sales promotion to consumers and end-users
The simple reason consumers respond to the sales promotion efforts of marketers are that they offer rewards. These rewards vary considerably but are either cash savings or free gifts. In many cases the rewards are immediate,while in others they are delayed.
The most common types ofconsumer sales promotion tools available are explained below:
• Sampling
It can be defined as any method used to deliver an actual or trial-sized product to prospective consumers. The concept of a 'free sample' isvery easy for consumers to understand, thus, this form of sales promotion is widely used and considered to be the most effective in influencing trial purchase.The logic behind the free sample of a product is simple: consumers are offered an opportunity to try the product without any specific commitment to buy it. The marketer hopes that the consumer will be so impressed with the sample that he/she will purchase the product. Samples are offered and delivered to consumers-in several ways: direct mail, door-to- door, in or on the package of another product, in high-traffic locations (e.g. shopping malls, airports), in shops (by demonstrations) and in newspapers and magazines (e.g. as fragrances on tear-out strips). For e.g. Virgin Mobile gave their promoters the latest cellular phones to use over the weekend before launching their cellular phone packages on offer.
Koekemoer, (2004:314) acknowledges that sampling is favourable under the following circumstances:
o When the new or improved brand is either demonstrably superior to or has distinct relative advantages over competitive brands.
o When the new product concept is so innovative that it is difficult to convey its uniqueness by means of advertising alone.
o When the marketer has an adequate promotional budget
• Couponing
According to Lamb et al (2005:473) a coupon is a certificate that entitles consumers to an immediate price reduction when they buy the product. Coupons are a good way to encourage product trial and repurchase.They are likely to increase the amount ofa product bought.
The"coupon specifies three things: the specific brand and package size that must be
purchased, the value of the coupon and the expiration date of the coupon. Coupons are offered by marketers for a variety of reasons and in a variety of ways. The general objective is to induce purchase.
The extensive use of coupons suggests that they are effective. There are different types of coupons: point-of-purchase coupons, mail-and-media-delivered coupons and in- and on-pack coupons. Most coupons are distributed through print media (newspapers and magazines).
• Premiums
According to Copley (2004:195) a premium is an extra item offered ata low price or free. It can be effective at increasing sales. Premiums can attract brand switchers and are used with current users to increase repeat purchases. The three most common types of premiums are:
in-, on- and near-pack premiums, free-in-the-mail premiums and self-liquidating premiums.
For e.g.customers and/or prospective customers are offered premiums to induce orencourage them to enter into new cellular phone contracts, renew their contracts or switch service providers.
• Price-offs
This promotion entails a reduction in the brand's regular price. This type of promotion benefits both consumers and marketers. It's useful for marketers since by rewarding present brand users they can maintain brand loyalty and consumers can be induced to purchase larger quantities.
• Bonus packs
With a bonus pack, marketers give consumers an extra quantity of a product without an increase in the price for the regular size.
• Refunds and rebates
This is a cash discount or reimbursement given to consumers upon submission of proof of purchase. Marketers of fast moving consumer goods typically provide refunds, whereas marketers of consumable durables provide rebates. Refunds and rebates offer delayed rewards.
• Tie-in promotions
This refers to a simultaneous promotion of two or more brands in a single campaign where promotional resources are pooled.
• Loyaltylreward programmes
Lamb et al (2005:475) state that the objective of loyalty programmes is to build long-term mutually beneficial relationships between a company and their key customers.
This is an incentive-based promotion aimed at increasing long-term repeat-purchase behaviour. For e.g. cellular phone service providers offer their customers, free SMS'sand free peak and off-peak airtime minutes.
As part of its exciting new programme to reward its more than 15.5 million loyal customers, Vodacom launched the most exciting television game show ever to be screened in South Africa called Yebo Millionaires. Itwas aired on SABC1 from October 2005 to April 2006.
"Yebo Millionaires is exclusive to Vodacom customers and is open to contract, prepaid and top-up customers.This exhilarating loyalty programme will reward Vodacom customers with cash prizes in excess of R1 million every week ."
(http://www.vodafone.com/article with thumbnaillO,3038,CATEGORY 10%3020202%...)