Types Of Promotion

Promotion is used to support advertising and encourage new or existing consumers to buy the product. It  is used in short term to give a boost to sales, but it is not used over long periods of time. An example of this might be when a new chocolate bar has been introduced onto the market and is being advertised on television.In the shops where the chocolate bars are to be sold, free samples may be given out to encourage the customers to try the new chocolate bar and, if they like it, to become regular buyers.
There are several different types of promotion that can be used by businesses.

• Price Reductions:

Examples include reduced prices in shops and money off coupons to be used when a product is next purchased. Money off coupons are sometimes found on the bottom of leaflets, in newspapers or on the packet of the product itself, for example, $1.00 off you next packet. This encourages the consumer to try the product and hopefully become a regular customer.

• Gifts:                                                           

Sometimes small gifts are placed in the packaging of a product of encourage the consumer to buy it. This is often used with products like breakfast cereals and the gift are usually aimed at children. Sometimes coupons are put on the back of packets which have to be cut out and collected. When a specific number have been gathered they can be exchanged for a gift, Such as a book. If the item on offer is more expensive, the coupons may be exchanged for the item but  small additional charge may also have to be paid. Collecting coupons requires several packets of the product to be purchased before the gift can be claimed and so several packets of the product will be sold. The aim is that the customer may continue buying the product even after the promotion has ended.

•   Competition:

The packaging of a product may include an entry form which allows the customer to enter a competition. The prize is often an expensive item, such as a car. This again obviously encourages the consumer to buy the product.

• Point of sale Display and Demonstration:

Point of sale is the place where the product is being-usually a shop. In the shop, there may be a special display of the product. With some products it can be an advantage to show how they should be used  and therefore a encouraging customers to buy.

• After Sales Services:

With expensive products, like cars or computers, providing an after sales service can be a way of encouraging the customer to buy. They can be reassured that, if the product goes wrong in the first few weeks or months after they have bought it, they will be able to take it black and get it repaired with no additional charge to themselves. This may make the customers buy form a shop that offers an after ales service rather than from somewhere that does not.

• Free Samples:

This is most commonly used with products like food, shampoo and cleaning products. A free sample can be handed out in the shop to encourage the customer to try the product and hopefully buy it. Free samples can be delivered to people's houses-although this would not be to every person's house, just the neighborhoods that they think will buy the product. Free samples can also be given away with other products. For example, new washing machine often contains a free sample of washing powder.
The Advantages of Promotion:

• It can promote sales at times in the year when sales are traditionally low (off season purchases) 

•  It encourages new customers to try an existing product.

• It encourages consumers to try a new product.

•  It encourages existing customers to buy a product often or in greater quantities.

•  It encourages customers to buy a product instead of a competing brand.  

• Which type of promotion should be used?

When deciding which type of promotion (advertising and promotional methods) will be most suitable use for a particular product, the following points need to be considered.

• The stage of the product life cycle that has been reached: which stages of the life cycle require different methods of promotion? If the product is new and has just been launched, the advertising may be more informative, but if  the product is well established and is at maturity then the advertising may be persuasive. 
• The nature of the product itself: If the product is a producer good, the type of promotion that would be used when promoting the product to other producers will be quite different to the methods used with consumer goods. For example, money off coupons would not be suitable, but discounts when goods are purchased in bulk would be appropriate.Businesses would not be influenced by collecting money off coupons but they will buy in large quantities and will be influenced by a discount. A product sold to other businesses, for example a machine to wrap perfume itself, which will be bought by consumers. The advertising for the perfume will be persuasive.
• The advertising budget: if the business cannot afford a very high budget, this will limit the places where the business can advertise. If the budget is small, television advertising will not be possible. The number of times adverts appear in a magazine could be higher if the budget was larger. With only a small promotion budget, a business will need to plan very carefully where the money will be spent.
• The nature of the target market: whether it is local, national or international and its size- a local market will require different media to a national one or an international one.