Answer to Question 1
A number of sales promotion techniques are commonly used to target consumer markets:
Coupons, the oldest and most widely used form of promotion, entitle the buyer to a designated price reduction. They allow discounts to some while still selling the product at full-price to others, may induce brand switching, can stimulate repeat purchases, may lead to the purchase of more expensive brands within a line, and are controlled by the manufacturer.
Price-off deals offer discounts at the point-of-purchase through specially marked packages. The reduction is taken from the manufacturer's profits rather than the retailer's, is controlled by the manufacturer, compares the product favorably to that of competitors, is appreciated by consumers who want a straightforward deal, and often leads to multiple purchases as buyers stock up while a brand is on sale.
Premiums are items that are offered free, or at a reduced price, along with the purchase of a product or service. Free premiums are sometimes attached to or included within the packaging, mailed to the consumer who sends a proof-of-purchase, or simply given away. Self-liquidating premiums are items available to interested consumers at a reduced cost, usually by mailing in a form and proof-of-purchase. They work well with loyal consumers.
Advertising specialties are small but useful items with the brand name or slogan prominently displayed. They always involve a message and are given away for free, with no obligation to make a purchase.
Contests and sweepstakes draw attention to a brand like no other technique and are popular with consumers. Contests allow consumers to compete for prizes based on skill or ability. Sweepstakes require no particular skills but only luck, as winners are drawn at random via entry forms or scratch-off cards.
Sampling and trial offers are methods used by advertisers to get people to try their products and services. Sampling allows consumers to use a brand on a trial basis with little or no risk. It is often used with new products, and is very popular with consumers. Trial offers serve the same purposeto get consumers to try somethingbut are used for more expensive items or services.
Phone and gift cards offer an increasingly popular form of promotion. They involve free or for-purchase debit cards that award the holder with a pre-set amount to be spent or a certain number of phone minutes to be used.
Rebates are money-back offers that require the purchaser to mail in a form and proof-of-purchase, requesting money back from the manufacturer rather than the retailer. They are now used for high-end goods as well as to promote multiple purchases of lower-priced goods.
Frequency programs, also called continuity programs or loyalty card programs, reward consumers with discounts or free products or services based on their repeat purchases. They were pioneered by airline companies and are now used by many businesses and retailers.
Answer to Question 2
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