Student Corner - 248

SALES PROMOTION TOOLS

Another popular tool in sales promotion is coupon. Samples introduce new products or service or some innovative addition to the existing product like variation in flavor, in colour and even in packaging design. But Coupons as tools of sales promotion promise definite cash benefit to the customer in the way of guaranteed discount. Monetary advantage is a real force of attraction to the customers. Coupons thus tell the customers ‘your pay less with this coupon if taken to   the retailer for the same product or even for the new product.’  For the new product, coupons announce less risk to try the product unlike the way of samples where you are introduced to the product for trying it but with no monetary advantage. Discount before the purchase is gained by the customer, not after the purchase as is cash refund or cost reduction discount after the purchase.

Coupons also come with less risk in trying new products; trying a new product can result in positive or negative response from the customer; if it is positive, it is ok but if it is negative, you have already spent on the new product at the price announced; in other words, you have unnecessarily spent you feel in the trial of the new product; but with coupons with already declared discount, you spend less at the beginning itself. If your attempt to try the new product is positive, you have enjoyed the advantage of knowing the new product at a lesser cost; but if the result is negative, you feel you have spent some money without need on a new product and coupons have rescued you from buying the new product.

Marketing personnel, however, see some disadvantage in coupon as tool of sales promotion. Too many coupons, that is, coupon clutter leads to less redemption rate. Massive distribution of coupons in a way discourages the customers who tend to distrust commercial wisdom of the distribution of coupons. Moreover, customers see coupons as not price reduction but a temporary offer.

Manufacturers resort to coupons sometimes due to competitive market. In fact, market itself means competition and when the business apprehends some inordinate decline in sale, it has and it does wake up to meaningful response to the decline in sale. First and foremost, you have to retain the customers from moving off to the competitor. Here coupons come handy to communicate to the customer through coupons tending to persuade not to leave you. Businessmen know this kind of challenge too well to miss it.They act to upgrade their sales promotion because they know well that sales promotion is a sure way of sustainability.

Again, we will see some more tools of promotion in our next.