Updated: Oct 3
Sales promotion programs mainly attract customers who are continually changing their favorite brands and looking for lower prices, higher values , or special rewards.
Programs promoting the sale of similar and homogeneous products and brands increase the short-term sales of such products and brands but do not affect customer loyalty and preference in the long run. In contrast, programs promoting the sale of different and heterogeneous products and brands increase the company's market share permanently and in the long run.
On the other hand, sales promotion programs encourage those who have never tried the company's products or services to buy and try the product, thereby increasing its market share. In addition to increasing market share, sales promotion programs encourage customers to buy early or buy more than they need. Usually, in such cases, the company's sales decrease sharply after sales promotion programs.
Sales promotion programs have several benefits for producers and consumers. Manufacturers with sales promotion programs: Adapt their production to short-term changes in demand and set the highest price for their product or service because they can offer great discounts to their buyers when needed. On the other hand, sales promotion programs encourage consumers to try out products and buy from new stores such as "Every day, Lower Prices" or "Discount Prices."
Retailers also increase sales of complementary products with the help of sales promotion programs (for example, discount sales of tea may also increase sugar or sugar sales and increase the number of visits to their store. Stores increase their customers 'awareness of the price of different products; on the other hand, manufacturers' sales also increase compared to the case where products were sold at approved prices. Design and implement specific promotions for different market segments, and service companies also use sales promotion programs, the purpose of which is to attract new customers and retain existing customers and increase their loyalty.
For example, we can mention the free sample. In this type of promotion method, a particular product or service is provided to customers for free and in different ways, such as door-to-door delivery, postage, distribution in the store, and pasting on other products. A clear example of this model can be found in Lancôme cosmetics' free samples in chain stores like Macy's. In this way, when a customer purchases more than $ 45 of Lancôme products, it is possible to receive a gift set of 10 items of cosmetics plus a free cosmetic bag. This set, if we usually want to buy it, we must pay $ 310 to buy these ten items in the original size. However, in this gift package, it is possible to receive the same ten cosmetic items in the test samples, which are smaller than the original samples. The purpose of this program is to acquaint customers with 11 other products of Lancôme Company.