Sales promotion is one of the major types or categories of promotional activities in marketing. It involves the use of media and non-media marketing communications for a specified and limited period to increase awareness and generate interest about a brand, product or idea, improve its attractiveness, entice potential customers to make a purchase or respond to a call-to-action, and stimulate market demand.
Nonetheless, there are different types examples of sales promotion. Take note that these examples also correspond to specific sales promotion tactics or activities included in a promotional strategy or the promotion component of a marketing plan.
Promotional Strategy: Nine Major Examples of Sales Promotion
1. Product Samples
Handling product samples to potential customers or distributing such to a specified geographic target market free of cost is one of the major examples of sales promotion. The purpose of doing so is to let potential customers try a product before committing to a purchase, thus acquainting them in the process.
Usually, this sales promotion activity is effective for high-quality goods or services. Some examples include free tastes of food products in supermarkets, one-month trial subscription of online-enabled services such as Netflix or Apple Music, tester perfumes or cosmetics at department stores, and sample medicines handed out by medical representatives to doctors.
Some companies and stores sell products attached with freebies. This is often called the razor and blade business model. As the name implies, an example would be the selling of blades with a free razor. The goal of this sales promotion tactic is to make the major product attractive potential consumers while also increasing the sales of a complementary product.
In other cases, providing freebies can help the introduction of either a complementary or related product to the same target market through inclusion to a sellable and established product. Other examples of sales promotion through freebies are the selling of gaming consoles with free game titles, smartphones with additional accessories, shampoo with a sample of the corresponding conditioner, and providing after-sales services, among others.
3. Loss Leader Marketing
Another example of sales promotion is loss leader marketing that involves selling a product below its market cost to stimulate the sales of more profitable products. It is similar to freebies in terms of purpose, but its implementation is very different. A product sold at a loss is intended to lead the subsequent sales of other products.
Prime example would be supermarkets selling staple products such as vegetables to draw customers into the stores and increase the likelihood of selling other more profitable products. Another example is free Google services and products that allow the consumption of profit-generating services and products, particularly as ad-based web applications.
4. Point of Purchase Display
Another way companies or storeowners draw customers into their stores is through point of purchase display or visual merchandising. The goal of this activity is to make the stores attractive and interesting while showcasing the products and disseminating other marketing messaging such as other sales promotions.
Showrooms for automotive vehicles or real estate properties are an example of sales promotion through point of purchase display. Electronic stores such as the concept stores owned or licensed by Apple let potential customers try the display products such as the iPhone or the MacBook. The arrangement and placement of products within a store is also another example.
5. Product Bundling
There are products sold in bundles. The primary goal of product bundling is to promote and sell different products as a set and tell potential customers that they all work together as one. In other cases, product bundling helps in selling complementary products or less attractive items by partnering them with products that are in demand. Bundling can also be integrated in a subscription-based revenue model.
Fast food restaurants such as Burger King and McDonald’s are notable for using this type of sales promotion. Their burger meals are often sold alongside fries or chips and soft drinks. In the telecommunication industry, providers sell plans with voice and text service, data service, value-added-service, and in some cases, mobile devices. Automobiles are also sold together with a comprehensive insurance plan.
6. Contests and Prizes
Contests and prizes collectively constitute another notable example of sales promotion. Companies would launch a particular contest with mechanics that involve purchasing a particular product or reaching a specific amount of purchases. The purpose of such is to increase the attractiveness of the product.
During its end-of-year promotion, Starbucks and similar food and beverage restaurants would giveaway free planners granted that customers would reach a certain number or amount of purchases. Department stores and supermarkets would also launch raffles and giveaway tactics. A customer reaching a specific amount of purchase is entitled to either a raffle entry or a freebie. The inclusion of toys in meals from fast food restaurants is another example.
7. Seasonal Discounts
Businesses and stores would offer seasonal discounts on selected products for several reasons. The obvious one is to attract potential customers. Doing so also employs a mix of loss leader marketing and point of purchase display. For example, a department store offering discounts on shoes alone has the potential of selling other clothing items.
Another reason for providing seasonal discount is to take advantage of holiday hypes. During Christmas season in most Western countries, products are often sold at discounted prices to take advantage of the heightened buying frenzy in the market. Some businesses and stores also offer seasonal discounts to clear their inventories and make way for newer items.
Distributing coupons is another way businesses provide discounts. Essentially, a coupon is any document such as a stub or ticket that are redeemable for a price discount or rebate when purchasing a product. The purpose of coupons is the build sales lead and initiate first sales from a potential customer through price discounts. Note that it can also jumpstart sales for stores with seasonal sales performance.
Some physical stores offer their own branded discount coupons while others rely on third-party marketers and distributors. On the Internet or in digital marketing, coupons often take the form of a discount code that can be used in online stores or electronic commerce.
9. Loyalty Reward Program
A loyalty reward program is a tactic intended to build and maintain a relationship with the consumers and promote repeat sales in the process. This type of sales promotion typically asks consumers to collect points or credits, or reach a specific purchase amount for them to enjoy perks and privileges such as freebies and discounts.
Some example of loyalty reward program includes miles programs provided by airline companies, memberships to a chain of hotels or restaurants, points card offered by an apparel store or a single company owning several apparel stores or clothing brands. Other businesses implement this program through email marketing, particularly by maintaining a database of customers subscribed to their mailing list and rolling out marketing communications about special offers and discounts.