Understanding Consumer Sales Promotions Samples Coupons Premiums And Contests

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Consumer sales promotions represent a significant marketing strategy used by companies to encourage product trials, increase awareness, and drive immediate purchases. These promotions take various forms, including free samples, coupons, premiums, contests, and rebates. This article examines these promotional strategies, their implementation, and their effectiveness in the marketplace.

Types of Consumer Sales Promotions

Consumer sales promotions encompass various incentives designed to encourage immediate purchase or trial of products. According to marketing literature, these include samples, coupons, premiums, contests, and rebates. Each serves distinct purposes within a company's marketing strategy.

Samples represent one of the most direct promotional tools, allowing consumers to try a small amount of a product before purchasing. This strategy is particularly effective for building awareness and encouraging trial. Common examples include small conditioner samples packaged with shampoo or food samples offered in retail grocery stores. While sampling can be an expensive promotional strategy, it is often highly effective, especially for food products, where consumers can immediately experience the product quality.

Coupons provide consumers with immediate price reductions on items. When used with samples in retail grocery stores, they enhance the promotional impact. The manufacturer later reimburses the retailer for the coupon value, and the retailer typically receives a handling fee for processing the coupon. During economic downturns, consumers tend to increase coupon usage and seek special bargains such as double coupons and buy-one-get-one-free (BOGO) offers. They may also shift toward purchasing more store brands during challenging economic periods.

Premiums offer consumers something either for free or for a small shipping and handling charge with proof of purchase. A classic example is the toy included in cereal boxes, which motivates consumers to purchase the product. In some cases, consumers may need to mail in multiple proofs of purchase to receive a premium. The primary objective of premiums is to motivate repeat purchases. It is worth noting that when consumers pay shipping and handling charges for premiums, they are essentially covering part or all of the premium's cost.

Contests and sweepstakes attract consumer participation through the chance to win prizes. Examples include the Publisher's Clearing House Sweepstakes and the Monopoly Game at McDonald's. These promotions not only encourage entry but also aim to drive additional purchases, as participants may be inclined to buy magazines or more food when entering.

Table: Examples of Sales Promotions

The following table outlines various types of sales promotions targeted at consumers versus businesses:

Push versus Pull Strategies

Companies employ different promotional strategies to get products to consumers. A push strategy involves promoting products to businesses (middlemen) such as wholesalers and retailers, who then push the product through the distribution channel to final consumers. Manufacturers may support this strategy by setting up displays in retail outlets or providing incentives like price discounts to retailers.

Conversely, a pull strategy targets final consumers directly, pulling them into stores or creating demand that encourages retailers to stock the product. When a company sends coupons to consumers, the goal is for consumers to take these coupons to stores and purchase the product. Manufacturers often use television advertising and newspaper coupon inserts to generate consumer demand, which in turn motivates wholesalers and retailers to stock the product.

Many manufacturers employ both push and pull strategies simultaneously, promoting products to both final consumers and trade partners including retailers and wholesalers.

Online Sales Promotions

With the growth of e-commerce, companies have developed online sales promotions that include free items, free shipping, coupons, and sweepstakes. Online merchants such as Shoe Station and Zappos have successfully offered free shipping and free return shipping to encourage online shopping. Some firms have found that their online sales promotions generate better response rates than traditional promotional methods.

Objectives and Effectiveness of Sales Promotions

Sales promotions serve several key objectives in marketing. They aim to get customers to take action quickly, typically resulting in immediate purchases. These promotions increase product awareness, help introduce new products, and often generate interest in the organizations that run them. The effectiveness of different promotional strategies can vary based on product type, target audience, and market conditions.

For example, sampling is particularly effective for food products where immediate sensory experience can influence purchasing decisions. Coupons tend to perform well during economic downturns when consumers are more price-sensitive. Premiums and contests are generally effective for building brand loyalty and encouraging repeat purchases.

Considerations for Consumers

When participating in consumer sales promotions, consumers should be aware of certain aspects. With premiums, while they may be offered "free," consumers often pay shipping and handling charges that effectively cover the premium's cost. With coupons, consumers should understand that retailers receive reimbursement from manufacturers plus a handling fee for processing these discounts.

Contests and sweepstakes typically require no purchase to enter, though the sponsoring organization hopes participants will make additional purchases when entering. Online promotions may include free shipping incentives that encourage consumers to complete online purchases they might otherwise abandon.

Conclusion

Consumer sales promotions represent diverse strategies companies use to encourage product trials, increase awareness, and drive immediate purchases. From samples that allow product trial to coupons that provide immediate discounts, these promotional tools serve distinct purposes in the marketing mix. Understanding how these promotions work, including their implementation and objectives, helps both marketers design effective campaigns and consumers make informed decisions about participating in these offers.

Sources

1. Consumer Sales Promotions - WSU Open Text
2. Consumer Sales Promotions - SAIT Marketing Textbook