Student Corner - 249

SALE PROMOTION: CASH REFUND

Short –term incentives form sale promotion. The main objective is to make the customer buy your products or service immediately so that your business gets promoted, that is, remains stable enough. Another great benefit of sales promotion through short-term incentive is what is generally called stock clearance.

Stock clearance is a major business step; excess inventory, a burden on the company, is put to use and it helps supply chain move smoothly. Products less in demand must move out so that the place occupied by them can be given to new and fresh products. You cannot help it. You may not question much the change in the purchase pattern seen in the market; it is customer’s choice and customer is always right. Somehow, you must see to it --- there are ways to achieve this stupendous task--- that stock clearance does not take long time lest the benefits of stock clearance become crippled.

All short-term initiatives, called sale promotion tools, focus on improving sale of the products that appear to stay with you longer than they should. Sales promotion ultimately generates revenue for the company and revenue generation is the definite mark of progressive business. Cash Refund Offer is another tool of sales promotion. On a proof of purchase, you return some money back to the customer. You give cash back, some of it, to the customer. Actually as said earlier, it is consumer promotion that is, focusing on the customer. No customer means no business. Price reduction is obtained by the customer in one way or another in all sales promotion tools. With the money saved, the customer can try some other product, a new product of your company; that is, you give him some money by reducing price of a product and get back the money through customer’s purchase of some other product of your company. In short, you retain the customer and to that extent you are a successful entrepreneur. Of course the customer with the monetary advantage through price reduction can go in for more of the same product at a reduced price; it is encouraging patronage. You and your customer in one sense move closer to each other. That is patronage; you will not disappoint the customer and the customer in turn will not disappoint you.  You reduce the price for the customer and the customer does not move off to another business company. Mutual retention is the hallmark of good relation with the customer.

Some more tools of promotion we will discuss in our next.