Marketers in different companies use various sales promotions tools to boost sales that vary in their effectiveness to produce different sales responses. Some of the researchers believe that sales promotions are zero-sum games, especially in an Indian market, where brand loyalists outnumber price buyers by two hundred percent. A study revealed that promotional offers in India do not help in category expansion. Rather, sales promotions are effective for causing stockpiling, brand switching, and purchase acceleration.
Different strategies work for different customer segments and products or services. The mantra of successful companies is, therefore, to listen to the target audience and plan the strategy accordingly.
Promotional offers can be either consumer oriented or trade-oriented. When consumer promotions target end-users, trade promotions target channel partner intermediaries such as the wholesalers and retailers. One advantage of promotional offers by using discount marketing for your business is to steer customers toward purchasing certain products or to boost sales during a certain period. It is a great strategy for first-time buyers’ promotions, when you need to attract new customers for a new product or service. Instead of paying a full price, the opportunity to try it at a discounted price can quickly change the first-time buyer’s attitude toward the purchase, thus opening a door to creating long-term customers. According to a research at Claremont Graduate University, redeeming coupons and promotions makes people delighted and they stimulate shoppers to buy more to use that coupon. Not only that, but promotions also create a sense of urgency or a ‘buy now’ mindset among shoppers which in turn, boosts sales.
Promotional offers like discounts, coupons, bundling, sampling or gifts work to boost sales during the sale period like Diwali season. Do discounts work in bringing in new customers and increasing sales? Absolutely. Companies like Dominos and McDonalds use coupons as their promotional tool, encouraging people to buy new products or spend more. Software programs like Adobe Photoshop, Microsoft office 365 give free trial programs of up to a month so that the customer can know more about the product and then purchase. However, discount marketing is short-term and has a drawback if not done right. With competitions everywhere, an online shopper might abandon your site if he gets a better deal such as a temporary price reduction or a rebate elsewhere. On the other hand, a poorly planned discount strategy can reduce the sense of urgency needed to encourage shoppers. An inexpensive and quick fix for sagging sales, these customer-oriented sales promotions work perfectly well for small businesses.
Brand campaigns and advertisements involve the use of paid media. The purpose of traditional advertising on TV, newspaper, radio has been to launch a new product, brand re-positioning or drive sales using rational or emotional persuasion. Some of the popular and innovative campaigns of the past that have created the brand image are Vodafone (zoozoos and ‘Happy to help – pug’ campaigns) and Idea (What an idea, sirjee!). Effective brand campaigns such as Surf Excel’s dirt is good campaign has successfully built a strong brand image and has established long-term relationship and emotional connect with users till today. Companies like Zappos invest heavily in online marketing, and its stellar social media campaigns shouldn’t be missed! The super creative OOH campaigns of Zomato, Hotstar, Google Maps also deserve a mention in successful campaigns. Brand campaigns have become a cakewalk due to the comprehensive developments in the world of digital marketing. A digital presence of a brand, for example, helps in reaching your customer, maintaining CRM, viewing insights about your customers, and collecting data to create a marketing approach. Similarly, Airbnb’s digital marketing strategy relies primarily on user-generated images and videos on social media like Facebook, Instagram, and Twitter. Although expensive, their digital strategy has helped them build a strong brand name, vital for the brand’s survival and long-term growth. The agency Magna predicts that by the year 2020, ad spend will be split equally between digital spend and the rest of all the traditional media together.
A good brand campaign not only integrates the product or service USP seamlessly with the brand message but establishes a strong functional and emotional benefit for the end consumer. Whether it is a brand campaign or a promotional offer, generate interest with content and create demand around your product or service, and the dollars will follow.