Quiz 12: Sales Promotions
NOO is a strong brand name with a strong brand image. Thus the consumer promotional techniques which will augment its sales revenue and increase market demand and store traffic can be bonus packs offer which is a way of providing excess amount at the current price per pack, offering coupons which will act as price discounts on products, adding premiums to products, various contests and sweepstakes through interactive games and performances, providing samples at organic restaurants and/or organic retail stores, price-offs with markdown prices and overlays and tie-ins with other companies like restaurants and grocery stores which serve and sell organic products respectively can all be combined in an organized way and thus offered to the consumers. The ideal trade promotion techniques which NOO can apply which will require the retailers to push its products at their stores and give prominent shelf space can be achieved through off-invoice allowances, cooperative merchandising agreement, premiums or bonus packs, co-operative advertising programs, trade shows and contests. If required providing the retailers with slotting fees can also help to push its products to the retailers' shelf space. The pricing of NOO's products is completely dependent on the kind of consumer and trade promotional techniques the management decides to participate in. The increased costs incurred by advertisements and promotions will be pushed towards the consumers leading the consumers to pay more than what they would have if there would not have been any promotional costs from the manufacturer's end. Also the manufacturer's profit margin is reduced due to the excessive promotional costs Intercompany tie-ins where NOO's products are showcased and pushed at restaurants serving organic food is a definite way to enhance brand recognition which has the potential of increasing consumer demand and thus sales. Attending trade shows create brand awareness and build relationships among various other trade show participants in the categories of food and beverage and/or ayurvedic and herbal and/or agricultural and forestry because NOO's products are certified organic products and has a niche market base. Networking is extremely important when it comes to practice of Integrated Marketing Communication program. The list of leading trade shows and their locations and other requisite information can be attained by in-depth market research. The "second generation" NOO has its own sets of advantages and disadvantages. The most important advantage is the strength of the brand name and image and the expectation related with it. However, with the death of PN, and the subsequent take-over of the company by his daughter has changed certain structure of the company's operations. To begin with, NOO has turned to manufacturing pure organic products and the company runs for profit instead for charity as was the concept initially. Secondly, a part of sales revenue is given as royalty to the different charitable organizations NOO is associated with. This connection emphasizes on the brand image of doing business for a cause. Moreover, with the advent of modern technology and Integrated Marketing Communications program, the company can undertake various consumer and trade promotional tools which attract interest, trial, market demand and eventually sales revenue.
Consumer sales promotion is a technique used in the broad and diverse IMC or Integrated Marketing Communications program and is intended towards stimulating market and consumer demand of products and improvement of product availability. This promotional method includes media and non-media marketing communication for a pre-determined and limited time frame and has the consumers as the direct target. The end users might be individual consumers or any businesses which consume the product themselves, instead of using it in the process of manufacturing or assembling of another product. This sort of sales promotion can be activated in form of coupons, premiums, sampling, contests and sweepstakes, refunds and rebates, bonus packs, price-offs, overlays and tie-ins methods and is an attempt towards providing additional value or incentives to consumers and business-to-business markets for stimulating product interest, trial and purchase in order to attract new consumers as well as to retain the present ones. The case in point reflects utilization of various consumer promotional techniques to attract teens and pre-teens to the cosmetic department of E.D. stores and eventually increasing store traffic by enticing this target market group. This target market group starts to develop well-defined tastes and preferences during these ages that in future turns to brand loyal consumer. E.D. stocks various leading and lesser known brands of cosmetics and uses those sales promotion techniques which are interesting enough to entice this age group to try out and eventually purchase its products. Any fun, funky, interactive and price saving technique which increases both the extrinsic and intrinsic value for this age group will create an interest about the brand in the group's mindset. Thus coupon distribution offering discounts on products, sampling involving free distribution of samples of the products, bonus packs and price-offs which eventually save the pocket money of this group and interactive contests and sweepstakes which offer both fun activities and great rewards on winning these, all combined together can serve as the perfect promotional mix for this age group. Overlays involve combining two or more consumer promotion techniques in a single campaign and tie-ins involve combining a consumer promotion with another product or company. For overlay technique , E.D. can combine coupons with contests and sweepstakes by distributing coupons for all the participants in a contest and/or sweepstake or combine samples with coupon distribution. The first combination not only will thrill the girls with the interactive games and activities but will also serve to give them discounts on products they wish to buy through the coupons. However, the prize of the contest and/or sweepstake has to be great enough to attract the girls' attention and yearning to participate. For tie-ins , E.D. can either provide a combo pack of a nail-polish with a lip gloss at a net discounted price or can tie up with another toiletry or face cleansing milk brand and provide its cosmetic samples with them.
Coupons are a consumer sales promotion technique intended towards stimulating market and consumer demand of products and improvement of product availability. This promotional method for a pre-determined and limited time frame is an attempt towards providing additional value or incentives to consumer and business-to-business markets for stimulating product interest, trial and purchase in order to attract new consumers as well as to retain the present ones. Coupons offer price reduction to consumers and might be stated as either a percentage or an absolute value off the retail price of products. The following table enumerates how four different coupon issuing companies differ in four aspects :