Topic 15 - Promotion Flashcards
Trade Credit - Into
Manufacturers offer retailers credit to pay for goods at a later date.
Advantages:
- No cash is required to stock products
- Can purchase goods and then pay for them once they are sold
Disadvantages:
- Could lead to bad debt
Point of Sale Materials - Into
Free posters and display materials are given to retailers to display products to customers.
Advantages:
- Enhances the look of retail store
- Attracts customers to the product display
Disadvantages:
- Retailers may need to dispose of bulky display materials at the end of the promotion
Sale or Return - Into
Manufacturers give retailers the option to return goods that do not sell.
Advantages:
- Retailers can try new products without being left with unsold inventory
- Improves cashflow
Disadvantages:
- Products may be returned in poor condition
Dealer Loaders - Into
Discounts used to encourage retailers to stock up on a product.
Advantages:
- Retailers can save on the unit cost of products, increasing profits
- Savings can be passed onto customers, increasing sales
Disadvantages:
- Retailers may overstock and be unable to sell
- Products might go out of date or fashion
Staff Training - Into
Manufacturers can offer retail staff free training to give them the skills and knowledge to sell the product.
Advantages:
- Staff become experts in the product
- Quality and motivation of staff are improved
Disadvantages:
- Loss of productivity
- Increased costs
Special Offers - Out of
Short term promotions on selected items.
Advantages:
- Encourages customers to try new products
Disadvantages:
- Customers may buy more than what they need, increasing waste
Free Gifts - Out of
Used to temp customers to buy a product again or for the first time.
Advantages:
- Can encourage repeat purchases
Disadvantages:
- Difficult to find a gift that appeals to all target markets
Vouchers and Coupons - Out of
Give customers money off future purchases.
Advantages:
- Can encourage repeat purchases
- Attracts customers
Disadvantages:
- May reduce profits
- Some customers may only spend up to the value of the money off vouchers
Loyalty Schemes - Out of
Customers can collect points by making purchases, which can then be exchanged for discounts or free vouchers.
Advantages:
- Information about customer preferences and buying habits can be gathered
- Promotions can be targeted based on customer preferences
Disadvantages:
- Customers can be wary if they feel the loyalty scheme will be difficult to set up or opt out of
- Time consuming and expensive to implement
Interest-Free Credit - Out of
Retailers offer customers credit to pay at a later date.
Advantages:
- Customers can purchase and pay later when they can afford to
Disadvantages:
- Could lead to bad debt
Free Trials - Out of
New products are given away as a sample.
Advantages:
- Customers can try the products before they purchase
- Word of mouth can spread
Disadvantages:
- Some customers will only use the free trial
- Customers may use free trial multiple times
Competitions - Out of
Competitions encourage customers to buy in order to take part.
Advantages:
- Can encourage repeat custom
- Can create hype and excitement
Disadvantages:
- Prizes can be expensive
- High marketing costs
- Packaging may have to e redesigned
Press Conference
Media are invited to a business presentation where they are given information or news.
Advantages:
- Can read a wide audience
- Can retain control of what is reported
- Media can ask the business questions directly
Disadvantages:
- Could be put on the spot
- Could make the situation worse if unprepared
Press Release
Media are provided with a written account of the business’s activities or events.
Advantages:
- Can counteract bad publicity
- Can send out messages without being questioned
Disadvantages:
- Time consuming
Donations to Charity
Can be used as a good PR event.
Advantages:
- Promotes CSR aims of the business
- Can gain a good reputation
Disadvantages:
- Some shareholders may prefer money is invested back into the business
