Promote sales in commerce
The strategy and methods of sales promotion stem from the sales and pricing policies of the enterprise. In order to successfully sell the goods, it is necessary not only to pack it well, but also to create attractive conditions for the purchase.
Each company is strategically focused on creating a sales promotion system.
Promotion of sales - a one-time incentive measures aimed at attracting the attention of customers to the goods (service) and persuading them to make purchases within the specified time by maneuvering prices and using other motivators. Trade organizations use the method of sales promotion to call for a strong and quick response from buyers. The impact of stimulus funds is usually short-term, they complement public relations, public relations, so they can not be used to form a sustainable preference for the product.
The starting point for choosing a sales promotion strategy is to determine its objectives. Of great importance is the choice of the subject and the type of incentive (Figure 6.5).
Fig. 6.5. The sequence of choosing sales promotion strategies and the relationship between them
Fig. 6.6. The algorithm for choosing the types of incentive strategies in the directions "solid - selective" and "price - non-price"
In Fig. 6.6 shows the algorithm for choosing the types of incentive strategies in the directions "solid - selective" and "price - non-price".
The incentive operations then win the consumer when they give an immediate (or with some delay) a gain or a saving.
Temporary reduction in the price of a product has its advantages and disadvantages. Many manufacturers, trade intermediaries resort only to this type of incentive, because, in their opinion, it is more profitable to meet the economically justified needs of the consumer than to respond to all new requests of the individual regarding the quality and variety of products.
The disadvantage of this type of incentive is that it does not lead to the creation of a circle of reliable, constant clientele, but forces the buyer to move from one brand of goods to another in accordance with the proposed reduction in prices. The advantage of this method is that it allows you to accurately estimate the cost of an operation in advance, quickly organize it in the simplest forms, as short as possible to shorten the timing of its operation in accordance with the intended goals. For a trading network, this type of sales promotion is an invaluable tool that can be used without any preliminary preparation in those cases when an immediate reaction to the actions of competitors or adjusting to a chain policy is required.
Price reduction can be undertaken either by the manufacturer, who wants to increase sales or attract new customers, or a trading enterprise. It can also be the result of a mutual agreement between the two parties: the producer provides a discount to the trading network, and that transfers it partially, completely or even in large amounts to the consumer.
Sale at reduced prices is especially effective when the price plays a decisive role in the choice of the goods. At the same time, the consumer is addressed with the appropriate advertising and information messages in order to induce him to purchase at a particular outlet.
The size of the price reduction should be sufficiently appreciable that they can be used to build advertising messages; stimulating demand, in order to compensate for the drop in profit associated with the decline in prices; quite attractive, to force the consumer to make a purchase.
All types of sales promotion focused on the selling price of the product can be divided into three large groups: direct price reduction, the distribution of coupons giving the right to buy at a discount, and a reduction in prices with a deferred discount.
Discounts are deductions from the price of the goods that the seller is going to in favor of the buyer, who either refuses to perform any marketing function by the seller, or performs it himself.
With all the diversity of the discount system for market participants, the following types should be distinguished.
1. Discounts for a large volume of purchases - a measure to reduce the selling price. As a rule, these are wholesale discounts, which are formed taking into account the percentage reduction in the nominal price.
2. Seasonal discounts suggest a price reduction guaranteed to buyers if they purchase seasonal demand products outside the time of the year for which these goods are intended.
3. Discounts for accelerated payment - A measure of reducing the standard sell-off chain, which is guaranteed if payment is made earlier than the deadline set by the parties.
4. Discounts for permanent or prestigious buyers - a promotional measure designed to reduce the standard selling price in cases where the goods of this firm are purchased for a long time or by prestigious customers.
5. Credits are discounts from current prices, which are accounted for as payment for purchased lots of goods in cases where the buyer actively participates in advertising campaigns, or in order to stimulate market participants.
6. Discounts for the promotion of new product sales - decrease in the standard selling price guaranteed to resellers, if they take new products for sale, the promotion of which requires increased costs for advertising and services of sales agents.
7. Discounts for complex purchases of goods - decrease in the standard selling price, which is guaranteed to the buyer if he purchases the goods with other complementary products of this company.
8. Discount for the rejection of competitors' goods - the additional benefit provided to the buyer in the form of planned or tactical discounts in case of signing an exclusive contract for the purchase of goods from only one supplier.
Discounts for the amount of goods purchased are established in the event that the buyer takes care of the storage of goods, reduces the cost of its transportation or sale, or achieves the simultaneous performance of these functions.
There are two types of discounts for the amount of goods purchased: cumulative and non-cumulative discounts.
Cumulative discounts are provided to a buyer who repeatedly purchases goods for a certain period of time, usually a year. The amount of such a discount increases with the increase in the total number of purchased goods. Cumulative discounts are designed to encourage repeat purchases by the same buyer, which, thanks to discounts, reduces the cost of purchasing additional items. Such discounts are aimed at attracting regular customers and their retention, i.e. to stabilize demand.
Non-cumulative discounts are provided for single orders. They encourage the buyer to purchase the goods in large lots, but do not direct it directly to purchases from the same firm after making one sale. Non-cumulative discounts are used to force the buyer to refuse to purchase a small batch of goods, since the processing of small orders is costly for the seller. Usually discounts for quantity represent a price reduction. They can be set in percentage or in the form of a certain amount both from the cost of the order, and depending on the number of units purchased. To avoid price discrimination of buyers, you need to offer discounts for the quantity to all of them without exception.
Seasonal discounts encourage buyers to purchase goods earlier than there is a demand for it. If they are used by the manufacturer, then their use leads to the storage function of other distribution channel members. Seasonal discounts also equalize sales during the year. The assortment of the enterprise, constructed taking into account seasonality, can look, as in Fig. 6.7. Seasonal discounts are provided along the chain to other members of the distribution channel.
The following organizations and their coalitions initiate sales promotion in commerce: retail, producers of goods and services, jointly manufacturers and trade, several participants not connected to each other in a vertical marketing chain (network activities).
At the initiative of the trade network during the holding of specialized exhibitions and fairs, many trade intermediaries
Fig. 6.7. Assortment seasonality
give customers discounts. Throughout the year there are periods when numerous shops are notified by radio, through the press or through outdoor advertising about the sale at a low price of a number of selected goods or their pre-determined quantity. Retailers offer their customers & quot; selected products & quot; week, month. At the same time, associated products of daily demand and long-term storage products are combined, which allows to increase the total turnover and create a permanent clientele that will be guided by sales incentives used regularly.
At the producer's initiative , a direct reduction in prices is accompanied by the provision of discounts on the trading network.
If the price of a product of any manufacturer is higher than the cost of competing products, then its reduction is viewed as a correct planning and management decision. However, the offer of sale at reduced prices should be limited in time and provide an opportunity to demonstrate the superiority of this product over competitor products. An impeccably promoted promotion can immediately lead to an increase in sales, immediately after the end of which there will be a sharp decrease in this indicator. Therefore, the consequences of price reduction should be carefully analyzed.
There are three ways to provide a direct discount:
1) Discount in percent - on the package the percentage discount amount (for example, 5 or 10%) is displayed or two prices are indicated: old (crossed out) and new (discounted);
2) a discount indicating its size in monetary terms (for example, minus 500 rubles.);
3) the indication of a new price without specifying the size of the discount.
Sometimes it is necessary to explain the reason for price changes: issue
new product, anniversary, seasonal event, holiday, etc.
Special prices or small wholesale. In this case, the price reduction does not apply to a single product, but to its small lot. The offer of the special price is aimed not at shifting sales over time, but at increasing consumption by each family. The benefit for the consumer is that he is offered a more substantial price reduction, as it extends to a batch of goods, which is especially effective for cheap products.
Products sold in small quantities are combined in one package, which, as a rule, is indicated that the product is a participant in the action. Such goods, as a rule, are located in the trading floor in places close to the aisle. Usually it is here that the most lively sale is due to the good designation of the product and its convenient placement for the buyer.
The manufacturer has several ways of implementing a special price offer:
• reduction in the price of the whole batch (100 rubles from 10 cans of coffee);
• One unit of a product from N is free (when you buy 10 cans one is free);
• a general reduction in the price of packaging (a new price for packaging soap from 10 packs).
Combined sale is applied to complementary goods, none of which is an obligatory component of the other. The price of the set is set lower than the price of the goods included in it, sold separately.
With a combined sale of several types of products from the same manufacturer, a significant discount. This type of sale allows you to combine already proven products with a new one, thereby facilitating the task of introducing a new product to the market. It also makes it possible to combine goods, the sale of which is difficult, with the products of high turnover, which ultimately leads to an increase in the sales of the organization's products.
Offsetting an old good when buying a new one is mainly used when selling expensive equipment and equipment that do not have a high degree of turnover. This form of incentive is very attractive to the consumer, as there is a price reduction (the consumer receives a new product at a discount), which is accompanied by the provision of services (delivering the consumer from an unnecessary thing).
There are two options:
• The accepted goods are not subject to resale - it goes to the landfill;
• This product is resold subsequently to another customer.
Additional quantity of the product is free. It takes into account the fact that the psychological impact on the consumer is much greater if he is offered 25% more goods than when using a 25% discount.
The methods of such a proposal:
• by the piece (200 + 20 pcs.);
• in percent (+15%);
• in weight terms (+200 g).
When using this method, the manufacturer bears two types of additional costs: free provision of a certain quantity of goods, new packaging for it. These costs are quite high, so this method is usually used by large firms.
Coupons occupies an intermediate position between a direct reduction in prices and a decrease in prices with a delay in receiving a discount. The incentive promotion is that the consumer is offered a coupon giving the right to receive a discount from the price of the goods. A buyer who has a coupon is given a discount that can be a certain amount of money, a percentage of the price of the product or a reduction in the price of any other product, provided that the goods indicated in the coupon are purchased. In the United States per person, there are up to 800 coupons per year.
It is recommended to use couplings in the following cases:
• in the phase of release of a new product to the market, when it is necessary to induce consumers to test it;
• at the time of re-release of the product on the market, when its sale is experiencing stagnation and it is necessary to expand the circle of buyers.
Below are the most common ways to distribute coupons.
1. Mailing list. The organization should have a file of potential customers, at the addresses from which coupons and advertisements are sent.
2. Read more. Coupons are dropped into the mailbox or distributed in places where potential buyers are crowded.
3. Through the press (including specialized magazines).
4. Through the packaging of the goods. The coupon is placed on it to attract new customers or is put into packaging to win regular customers.
5. Distribute coupons directly in the store at the entrance.
Much attention is paid to marketers such an incentive, as reimbursement with a delay .
Simple reimbursement with a delay means that the price reduction occurs not at the time of purchase, but after some time if the customer sends his coupon giving him the right to a discount at the address indicated on it. In this case, the discount is assumed only in the form of a certain amount of money returned by a bank check. Each family, as a rule, has the right to receive a one-time discount.
Reimbursement upon presentation of proof of purchase - the most widely used form of price reduction with deferred discounts, when a refund in the form of a certain amount of money is paid on condition that several proofs of the purchase are presented. It is used mainly to create a circle of regular consumers of goods of any brand. Coupons are placed on the package and must be cut out.
The advantages of this method:
• ease of distribution and cheapness of coupons;
• Simplicity of checking the results of an action to promote sales;
• Attractiveness for buyers, as compensation is usually larger than with other types of reimbursement with a delay;
• Effective in dealing with competitors, as it requires a large number of repeat purchases.
Disadvantages of this method:
• It takes a long time, because it requires a large number of repeat purchases;
• Strict control over the presence of goods in the network before the end of the event and its withdrawal from circulation after the end.
Combined compensation with a delay involves combining several products of equal producers within a single share through the use of the following methods.
1. Chain of coupons. Several goods are combined in one coupon, distributed through the press. The consumer purchases goods at the store of his choice, pastes proof of purchase for a coupon published in the press, and receives a refund with a deferment to a larger amount.
2. Quality test. In this case, the coupon is in the form of a booklet consisting of several pages containing samples of pre-selected goods that are offered in stores at a discount. The total amount of the discount reaches a certain marginal cost. The consumer will receive this amount by bank check, having tested all the samples offered to him.
3. Gift. The consumer can purchase various items for use as a gift and at the same time receive a significant discount.
Accounting coupons (cross coupons) is a refund with a deferred amount of money in the event that the purchase of two very different goods not sold at one outlet is made.
Price reduction combined with a socially useful measure is used to increase interest in reducing prices with a delay in payment of a discount and improving the image of the trademark. For example, by presenting 10 purchase documents, the customer receives a discount of 1000 rubles. and at the same time 100 rubles. will be transferred to the fund for disabled people.
Sales activity of the company is aimed at arranging the flow of goods to the final consumer. The priority goal is the transformation of the probable demand for the goods of the enterprise into a real one, which is carried out within the established period through the creation of an effective marketing policy.
1. Operational and marketing activities are based on marketing research, which means the creation of a reliable market data base for improving the competitiveness of the company through timely management decisions on the manufacture of the finished product, its successful promotion from the manufacturer to the consumer, taking into account the formation of positive public opinion in various target audiences.
2. Commercial relations are a complete set of economic, organizational, legal and social relations between market participants in order to exchange goods for money.
3. Sales marketing is an integral set of forms and methods for managing the process of selling products as a result of the transformation of goods into money, taking into account the satisfaction of customers' requests and obtaining the intended profit.
4. The initial price of the product and the variations in prices are set to bring them in line with the changing market conditions and opportunities of the enterprise. Due to careful preparation of the price policy, which allows to take into account the aggregate costs and the state of demand in the market to the maximum extent, it becomes possible to create reasonable commercial prices, mark-ups, discounts, and prepare profitable investments.
5. The use of differential pricing with the help of a discount system allows to increase the quantity of the goods sold, to confirm its consumer and economic value, to ensure the fulfillment of the sales plan of the sales enterprise, to maximize profits.
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