Sales Promotion

• What are the types of sales promotion?

  • Point of sales advertising
  • Free gifts
  • Loyalty schemes
  • Sponsorship
  • Discounts
  • Competitions
  • BOGOF (Buy One Get One Free)
• What are the pros and cons of point of sales advertising?

  • PROS: relatively cheap, increased customer attention, can be combined with other techniques (eg: discounts)
  • CONS: difficult to convince retailers to give your brand that amount of space, has to be kept exceptionally clean and tidy- taking up time and effort
• What are the pros and cons of free gifts?

  • PROS: encourages customers to buy more since they get a free product with their purchase, increases customer retention if they enjoy the product and if it's something the customer values
  • CONS: they are free and therefore additional costs for the business, if the gift isn't valued by the customer it is unlikely to encourage them to purchase the product
• What the pros and cons of loyalty schemes?

  • PROS: effective in retaining customers as they receive offers or discounts if customers purchase a certain number of products, can develop high levels of customer loyalty
  • CONS: these schemes suit products that people buy regularly but are offered within crowded markets where customers have many options of which to buy, difficult to create a scheme that stands out
• What are the pros and cons of sponsorship?

  • PROS: raises brand awareness, improves market presence
  • CONS: can be expensive, doesn't engage customers in the same way as other methods of promotion
• What are pros and cons of discounts?

  • PROS: makes the price more attractive by offering a reduction of the price usually to a short period of time, mostly suited to attracting new customers though may also encourage repeat in purchase
  • CONS: as soon as discount is over customers may switch to different competitors, short-term method
• What are the pros and cons of competitions?

  • PROS: more likely to encourage an impulsive purchase, can develop brand loyalty
  • CONS: may be ineffective if consumers aren't persuaded by the final prize, expensive
• What are pros and cons of BOGOF?

  • PROS: makes price more attractive, shifts excess stock, can encourage customers to buy more than they need (more revenue)
  • CONS: half of the revenue is being made and therefore may be unable to cover costs
• What is the difference between sales promotion and advertisement?

  • advertisement relates more to getting customers to know about the business and draw them to explore it
  • sales promotion are mostly used to get the customers to buy the products and to increase retention