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What is Sales Promotion?
Sales promotion is a marketing strategy where organizations employ an attractive temporary campaign to increase demand/sales for their products. It forms part of the promotional mix where businesses use a short-term customer-oriented approach. No matter how successful an organization is at some point, it will encounter moments when it needs to boost its sales.
Also, the need to stimulate demand may arise. This is where sales promotion becomes functional. It may occur at the beginning of a company’s business journey to establish a customer base. The campaign may also occur sometimes down the line when sales decrease.
Companies that use sales promotion techniques know their audience, emphasize urgency, and are consistent. One of the popular sales promotion events is black Friday sales, a seasonal sale that occurs annually. Sales promotion benefits include increasing customer acquisition by providing free trials, discounts, free shipping, flash sales, and more.
Moreover, it can allow a company to introduce new products, sell-out overstock, increase last-minute revenue, and reward existing customers. On the other hand, while sale promotion successfully increases sales, it comes at an expense. The main two risks include devaluing a brand/company. Also, it may make it complicated for organizations to sell products back at the original price.
Characteristics of sales promotion
- Value- companies that reflect high value works better than low-value ones. However, the customer’s perception of the value is what is important.
- Attractiveness- is the degree to which consumers perceive the sales promotion technique as desirable. Therefore influence them to consider purchasing the products or service.
- The primary purpose of sales promotion is to induce customers.
- Sale promotion is irregular and non-recurring used during specific circumstances, such as a profit fall.
- It is a supplementary effort to advertising.
- Sales promotion includes all activities implemented by a business to attract a buyer at the selling point.
Objectives of sales promotion
- Stop and shop- a business carrying out sales promotions intending to attract customers who have no intention of purchasing. Therefore the activity would encourage them to enter the store. The promotion approach may not directly hint at purchase but free samples.
- Shop and purchase- once a company persuades customers to look at the items under sales promotion. The company’s representation may convince the customer to purchase the product.
- Buy bigger- the promotion activity aims to convince buyers to purchase in larger quantities,
- Re-purchase- the final objective is to encourage buyers to return to their stores. They want to achieve this by instilling loyalty among the clients through previous purchases.
Different types of Sales Promotion
There are many different types of sales promotions. Although all the approaches are appropriate for businesses. Each business implements a type of sales promotion that works best to increase sales and connect with its target market.
Organizations may hold flash sales which are extreme short sales that provide extreme discounts for customers for a limited time. These sales foster a sense of urgency and necessity among its customers. Many retail stores adopt this strategy to sell more products. Therefore get rid of surplus inventory turning a negative into a positive within hours. Companies run successful flash sales by determining their goal of flash sales, keeping the sale timely and straightforward. Also, they choose a target market and tailor the flash sale to attract that group.
Adding discounts to products or services is possibly the most popular sales promotion technique. Customers love to grab a bargain. Therefore it makes strategic sense for organizations to offer discounts now and then. Companies that effectively use discounts make sure their products are attractive, consider their bottom line, and do not implement the technique often.
Companies may implement free shipping to reduce the significant portion of customers who abandon purchasing products because of delivery charges. Furthermore, free shipping gives customers a sense of security that they won’t lose out if they decide to send the product back.
Competitions and challenges
Businesses hold competitions and challenges often on social media to improve customer engagement by enabling followers to compete for products. This technique also results in a significant amount of free publicity if the challenge entails sharing the brand on a customer’s account.
Demos is one of the most prevalent sales promotion campaigns and one of the reliable techniques to increase customer base. It can be a win-win for both a business and potential customers. A company gets the chance to show the market their products, and customers try them before they buy without any risk. This method increases customer satisfaction because a few end up pleasantly surprised.
These sales promotion provides first-time buyers discounts to welcome them as new clients. The new clients are more likely to purchase services and products at a discount. Moreover, because the offer applies once, an organization does not lose a vast amount of money.
BOGO (buy one, get one free) promotions
Organizations often use BOGO to raise awareness of their services and products. Customers who purchase can gift the extra product to a friend or family. Therefore assist businesses in increasing their customer base. However, some data criticize this method for fast food because of its unfavorable outcomes.
Instead of purchasing individual items, product bundles offer a discount to customers who purchase a product collection. This technique is popular among businesses in different industries. They can increase their average order sales, revenue, and values. Also, companies decrease inventory waste alongside saving finances on distribution.
Coupons and vouchers
A company may use coupons and vouchers to reward the customers for brand loyalty which stimulates future purchases.
Businesses use donation as an excellent way to build credibility and goodwill within the target market. They carry out this sales promotion approach by donating a part of each sale to a charitable institution over a period
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