1. 13 Sales Promotion Chapter Afjal Hossain Department of Marketing
Assistant Professor
Department of Marketing
Patuakhali Science & Technology University
Kenneth E. Clow & Donald Baack Integrated Advertising, Promotion & Marketing Communications – 2nd ed.

2. Why Consumer promotion?
Sales Promotion
Also refers to consumer promotion.
Are the incentives aimed at a firm’s customers.
This type of promotions are directed toward individuals or firms that use the product and do not resell it to another business.
Why Consumer promotion?
Stimulate purchase
Introduce as a trial
Create new users
Increase repurchase from occasional customers
Reward loyal customers
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

3. Promotions that Work Types/ Forms of Consumer Promotions Coupons
Unique, Desirable Offering or Premise
They make you believe you can win!
Simple to Enter / Participate
Coupons
Premiums
Contests & Sweepstakes
Refunds & Rebates
Free samples/ Sampling
Bonus Packs
Price-offs
Specialties
Price Reductions
Types/ Forms of Consumer Promotions
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

4. Types of Consumer Promotions ---
Coupons
price reduction offer to a consumer for achieving another thing.
It may be percentage off the retail price. Three types of coupons are:
Instant redemption coupons:
This type of coupons are given out along with free samples of a product to encourage consumers to try a new brand.
Bonus-back coupons:
This type of coupons are given inside packages to encourage repeat purchase.
Scanner-delivered coupons:
Firms issue coupons at cash register by triggering an item being scanned. The item being scanned is normally a competitor’s product. It is used to brand switching.
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

5. Types of Consumer Promotions ---
Coupons: Problems
Reduced revenues: Using coupon it is to reduce price of the product in case of the loyal customers in the next purchase. So, total revenue is reduced.
Mass-cutting: This problems occurs only for a fraudulent retail outlet/ illegal coupon ring.
Counterfeiting: Coupons are copied & send back to the manufacturers. Newspaper generated black & white coupons are easiest to counterfeit.
Misredemptions: It is of misrepresenting the coupon for a wrong size cane. Coupon for 250 gm cane rather than 500 gm cane.
Coupons: Tactics to Improve Coupons Effectiveness
The Face value of the coupon: Higher value
Distribution method: Free standing inserts (FSI)
Attractiveness
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

6. Types of Consumer Promotions ---
Premiums
prizes, gifts/ other special offers consumer receive while purchasing products
In this case consumers pay full price of the product. Four types of premiums are:
Free-in-th premiums
In or on-package premiums
Store or manufacturer premiums
Self-liquidating premiums
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

7. Types of Consumer Promotions ---
Premiums: Four types of premiums
Free-in-th premiums
Gifts, individuals receive for purchasing goods. To receive the gift, the customer must mail in a proof or purchase to the manufacturer, who then mails the gift back to the consumer. Sometimes, more than one purchase is required to receive the gift.
In or on-package premiums
small gifts such as toys in cereal boxes. Sometimes, the gift is disguised or packaged so the consumer must buy the product to find out which premium it contains. Ex: Package of blades with the purchase of razor.
Store or manufacturer premiums
Gifts given by either the retail store or manufacturer when the consumers purchase a product. Ex: Fast-food restaurants offer children a toy with the purchase of child’s meal.
Self-liquidating premium
Consumers purchase when the manufacturers bear the shipping or handling costs just paying for the products price.
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

8. Types of Consumer Promotions ---
Premiums: Problems
Time Factor
The offers would be for a small time otherwise it will face a huge loss.
Cost
Higher cost premiums create more sales but cost more to provide.
Premiums: Building successful Premium Programs
Match the premium to the target market
Carefully select the premiums (avoid fads, try for exclusivity)
Pick a premium that reinforces the firm’s product and image
Integrate the premium with other IMC tools (especially advertising & POP displays)
Don’t expect premiums to increase short-term profits
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

9. Types of Consumer Promotions ---
Contests & Sweepstakes
Contests
Sweepstakes
Purchase is required to enter
No purchase is required to enter
Consumers/ Participants to perform some type of activity
Participants need not to perform any activity
The winner is selected based on who performs best or provides the most correct answers
The chance of winning a sweepstakes are based on a probability factor
Can’t be restriction for the purchase of the products
Can be restricted for the customers to one entry per visit to the store or some other location
Consumer goods related
Sports related
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

10. Types of Consumer Promotions ---
Contests & Sweepstakes: Problems
Costs
to provide prize, entry forms, legal statements, supportive advertising etc.
Consumer Indifference
State lotteries, internet gambling create individual difference.
Clutter
Many companies can offer at a given time
Contests & Sweepstakes: Creating successful C & S
Finding the right prize
Undertake an advantage of a special event
sports contest or celebration of any renowned person
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

11. Types of Consumer Promotions ---
Refunds & Rebates
cash returns offered to consumers for the purchase of a product
Consumers pay full price for the product but can mail in some type of proof of purchase and then the manufacturer refunds a portion of the purchase price.
Refunds
Rebates
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

12. Types of Consumer Promotions ---
Difference between Refunds & Rebates
Refunds
Rebates
Cash returns on “soft goods”
Cash returns on “hard goods”
Soft goods are – food or clothing
Hard goods are – ticket items i.e. automobiles
Refunds are of small amount of money
Rebates are of large amount of money
Refund on a food item is Tk. 50
Rebate on a car is Tk. 2,000
Refund is always on products
Rebates is for both products & services
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

13. Types of Consumer Promotions ---
Refunds & Rebates: Problems
Costs
mailing & record keeping cost involved.
Lost revenue
total revenue is decreased.
Diminished Effectiveness
no new purchase is evolved.
Refunds & Rebates: Creating effective RR
Visibility
Perceived newness
An impact
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

14. Types of Consumer Promotions ---
Sampling
encourage consumers to try new product
Sampling is the delivery of actual product to consumers for their use or consumption. Samples are provided free of charge. Often, companies provide samples of products to potential clients. Sampling can be used in service sector i.e. Saloon or Dentist. Seven types of sampling:
In-store distribution
Direct sampling
Response sampling
Cross-ruff sampling
Media sampling
Professional sampling
Selective sampling
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

15. Types of Consumer Promotions ---
Sampling: Seven types of sampling
In-store sampling
when food product companies have personnel, cooking the food and passing it out to individuals in the store
Direct sampling
samples are mailed or delivered door to door to consumers.
Response sampling
samples are made available to individuals or businesses responding to a media offer on television, on the internet or from a magazine etc.
Cross-ruff sampling
samples of one product on another.
Media sampling
samples are included in the media outlet.
Professional sampling
samples are delivered by professionals, doctors provide free samples to patients.
Selective sampling
samples are distributed at a site i.e. state fair, parade, hospital, restaurant, sporting event etc.
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

16. Types of Consumer Promotions ---
Sampling: Problems
Cost
Samples are mailed, adding to the expense of the program.
Sampling: Effective use of samples
It introduces a new product or a new version/ an existing product to a new target market or a prospect.
Willing to switch brands if the trial use of the product was a positive experience.
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

17. Types of Consumer Promotions ---
Bonus Packs
encourage to buy existing product with an extra unit
when an additional extra number of items is placed in a special product package then it is called bonus packs. Ex: Buys 4 pens for the price of 3 pens in a bonus pack.
Bonus Packs: Problems
When the bonus is small consumers often believes the price of the product has not truly changed.
When the bonus is large, consumers tend to believes that the price was first increased up to compensate for the additional quantity.
The size of the bonus catches the consumer’s attention, it may not convey the desired message.
Bonus packs are costly because, additional amounts of product sell for the same or a similar price.
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

18. Types of Consumer Promotions ---
Bonus Packs: Effective use of Bonus Packs
A retailer can build a good relationship with a manufacturer that uses a bonus pack to increase brand switching.
Consumers like bonus packs because they get additional product at the same price.
Reduce brand switching at a minimal cost for existing product.
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

19. Types of Consumer Promotions ---
Price-offs
encourage an display sales more not the actual product
A price-off is a temporary reduction in the price of a product to the consumer. It is not on actual item but on a POP display, sign or shelf. It stimulates
Sales of an existing product.
Work well in the B2B area.
Price-offs: Problems
Too many price-off offers can create a detrimental impact on the firm’s image.
It devastates for profit margins
Price-offs: Effective use of price-offs
It has an appeal of a monetary savings to consumers
The reward is immediate
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –

20. Types of Consumer Promotions ---
Specialties
Items given free to consumers and other stakeholders to help keep a brand’s name top-of-mind.
These are normally low cost items, i.e. calendars, rulers, coffee mugs, T-shirts, pens etc.
Basically non-profit organizations use specialties for opening new facilities.
Price Reductions
A featured price that is lower than regular price.
Ex: Buy one get one free, 30 more for same price etc.
Sometimes the retailers sacrifices some of its profits to clear the stock.
Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall –