Commonly Used Sales Promotion Activities

Let's explore the key types of sales promotion activities. These activities help businesses attract customers, boost sales, and create interest in their products or services.

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1. Rebate

Explanation:

• A rebate is when the seller offers a product at a special lower price for a limited time.
• The main aim is to clear excess inventory or attract more customers.
• Unlike a regular discount (taken off at the time of purchase), rebates may sometimes require buyers to claim the money back after making the purchase. However, in many cases today, the reduced price is given at the point of sale.

Important Points:

• Temporary price reduction.
• Can be used to clear old stock.

Examples:

1. A car manufacturer offers a ₹10,000 rebate for buyers who purchase a car before the end of the month.
2. An electronics store gives a ₹1,500 rebate on old-model laptops to make space for newer ones.
3. A washing machine company provides a ₹2,000 cash-back on purchases made during a festive season.

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2. Discount

Explanation:

• Discount is a direct reduction in the listed price of a product.
• It is a common way to attract buyers and beat competition.
• Discounts are given at the time of purchase.

Important Points:

• Direct price reduction.
• Can be used during off-seasons or festivals.

Examples:

1. A shoe company announces “Up to 50% Off” on all footwear during the Great Indian Sale.
2. A retailer showcases “Buy Now: Flat 30% Off on All Winter Wear” at the start of summer.
3. A shirt marketer offers “50+40% Discount” to clear stock before new designs arrive.

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3. Refunds

Explanation:

• A refund is when a part of the price is paid back to the customer after the purchase.
• Usually, the customer provides proof of purchase, such as returning empty packets, wrappers, or submitting purchase slips.
• Common in food and day-to-day consumer products.

Important Points:

• Partial money-back after purchase.
• Increases repeat buying (as customers have to collect wrappers, foils, etc.).

Examples:

1. Toothpaste company: “Return 5 empty tubes and get ₹20 back!”
2. Chips company: “Send 10 empty wrappers and get a ₹50 refund cheque.”
3. Coffee brand: “Return 6 empty jars to get ₹100 instant cashback at the store.”

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4. Product Combinations

Explanation:

• In a product combination offer, a company provides another item as a gift with the purchase of some product.
• These offers add value for the customer and encourage buying.

Important Points:

• Increases perceived value.
• Encourages larger or multiple purchases.

Examples:

1. “Buy a bag of wheat flour (atta) and get ½ kg of rice free.”
2. “Get a 128 KB memory card free with any digital camera.”
3. “Buy a 25-inch TV and get a vacuum cleaner free.”

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5. Quantity Gift

Explanation:

• Quantity gift means customers get extra quantity of the product for the same price.
• Common in toiletry and packaged food categories.
• Popular slogans include “Buy 2 Get 1 Free” or “20% Extra.”

Important Points:

• More product for same price.
• Attracts value-conscious buyers.

Examples:

1. “Shaving cream: 40% extra free in every pack.”
2. “Buy two shirts—Get one free.”
3. “Book 2 nights at the hotel, get an extra night for just ₹500.”

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6. Instant Draws and Assigned Gift

Explanation:

• Here, the customer gets a chance to instantly win a gift by participating in a draw, scratch card, or a similar activity on the spot.

Important Points:

• Creates excitement and encourages impulse buying.
• Gifts are usually given instantly or decided immediately.

Examples:

1. “Scratch a card with every TV purchase—win a fridge, car, or computer instantly.”
2. “Burst a cracker after shopping—win a T-shirt, water bottle, or lucky voucher.”
3. “Open a mystery box after buying—win guaranteed gifts.”

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7. Lucky Draw

Explanation:

• Customers get a coupon or a code to enter a lucky draw when they make a purchase.
• Actual winners are announced later.

Important Points:

• Encourages higher value of purchase.
• Build anticipation and excitement.

Examples:

1. “Buy our bathing soap—stand a chance to win a gold coin in a lucky draw.”
2. “Purchase petrol worth ₹500—get a lucky draw coupon for free petrol or a scooter.”
3. “Buy innerwear, fill out a coupon, and win a car.”

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8. Usable Benefit

Explanation:

• Customer gets a benefit which can be used later, such as coupons or vouchers for other products or services.
• Value is often equal to the purchase amount or a significant portion of it.

Important Points:

• Motivates customers to come back.
• Increases overall sales through cross-promotion.

Examples:

1. “Shop for ₹3,000—get a holiday package worth ₹3,000 free.”
2. “On shopping ₹1,000 or more, get a discount voucher for accessories.”
3. “Buy two pairs of jeans, get a VIP movie ticket free.”

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9. Full Finance at 0%

Explanation:

• Companies offer financing schemes where customers can buy on instalments with no interest charged (0% finance).
• However, there might be processing fees or hidden charges, so customers must check the fine print.

Important Points:

• Makes high-value products affordable.
• Attracts buyers who may not have cash in hand.

Examples:

1. “Buy a refrigerator: 24 easy monthly instalments at 0% interest.”
2. “Purchase a new bike: Pay ₹8,000 now, post-dated cheques for the rest.”
3. “Smart TV available with 0% EMI for 12 months.”

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10. Sampling

Explanation:

• Free samples of a product are given to customers, especially when a new brand is launched.
• The aim is to let customers try the product and decide if they like it.

Important Points:

• Helps customers experience product quality.
• Lowers the risk for first-time users.

Examples:

1. Free toothpaste samples distributed at schools.
2. Sampling booths for new chips or snacks in malls.
3. Small sachets of shampoo provided with magazines.

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11. Contests

Explanation:

• Customers are invited to participate in a contest that may involve answering questions, quizzes, or demonstrating skills.
• Winners receive prizes.

Important Points:

• Increases customer engagement.
• Boosts brand recall and product awareness.

Examples:

1. Quiz on product knowledge with every shopping bill—correct entry wins a gift.
2. Complete a slogan for the company’s new drink, best slogan wins a bike.
3. Answer a question about the company on their website and stand a chance to win movie tickets.

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Summary in a table

Here’s a clear summary table for all 11 types of sales promotion techniques mentioned:

No.	Type of Promotion	Explanation (Short)	Important Points	Examples
1	Rebate	Temporary reduction in price; buyers may claim cashback after purchase.	• Temporary price cut • Helps clear old stock	• ₹10,000 rebate on cars before month-end • ₹1,500 rebate on old laptops • ₹2,000 cashback on washing machines
2	Discount	Direct reduction in the listed price at the time of purchase.	• Immediate price cut • Common in off-season or festival sales	• “Up to 50% Off” on shoes • “Flat 30% Off on Winter Wear” • “50+40% Discount” on shirts
3	Refunds	Part of the price is returned after purchase upon proof.	• Partial money-back • Encourages repeat buying	• ₹20 refund for 5 empty toothpaste tubes • ₹50 cheque for 10 wrappers • ₹100 cashback for 6 coffee jars
4	Product Combination	Free item with another purchase.	• Adds value • Promotes larger/multiple purchases	• Buy atta, get rice free • Camera with free memory card • TV with free vacuum cleaner
5	Quantity Gift	Extra quantity of same product for same price.	• More for same cost • Attracts value-conscious buyers	• “40% Extra Free” shaving cream • “Buy 2 Get 1 Free” shirts • “Book 2 nights, get 1 night half-price”
6	Instant Draws / Assigned Gift	Instant reward through scratch card or random draw.	• Creates excitement • Encourages impulse buying	• Scratch card with TV purchase • “Burst a cracker” lucky gift • Mystery box surprise gift
7	Lucky Draw	Customer enters draw after purchase; winners declared later.	• Builds anticipation • Encourages higher spending	• Win gold coin with soap • Petrol lucky draw for scooter • Win a car via entry coupon
8	Usable Benefit	Customer gets vouchers or coupons usable later.	• Encourages repeat visit • Boosts cross-promotion	• ₹3,000 holiday on ₹3,000 shopping • Voucher for accessories • Free movie ticket with jeans
9	Full Finance at 0%	Customers buy on instalments without paying interest.	• Makes products affordable • Attracts credit buyers	• 0% EMI for refrigerator • Pay ₹8,000 now, rest later for bike • 12-month EMI on smart TV
10	Sampling	Free samples given to let customers try product.	• Builds awareness • Reduces risk for first-time users	• Free toothpaste at schools • Snacks sampling in malls • Shampoo sachets in magazines
11	Contests	Customers compete in quizzes or activities for prizes.	• Engages customers • Increases brand recall	• Quiz with purchase • Slogan-writing competition • Online product question contest

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Scenario Based Questions

1. Scenario: A detergent company offers “Buy 2, Get 1 Free” on its 1 kg packs during the festive season.

   • Question: Which sales promotion technique is the company using? How does it benefit the customer?
   • Answer: The company is using the quantity gift method. The customer gets more product for the same price, which increases value.

2. Scenario: A customer buys a laptop and receives a scratch card, winning a free external hard drive instantly.

   • Question: What type of sales promotion was used here? Why is this effective?
   • Answer: Instant Draws and Assigned Gift were used. This type of offer creates excitement and motivates quick buying decisions.

3. Scenario: A customer collects 10 empty packs of a snack and sends them to the company, receiving ₹100 cashback.

   • Question: Identify the sales promotion technique and describe its advantage for the company.
   • Answer: Refunds. This encourages repeat purchases and ensures customer loyalty.

4. Scenario: An electronics store offers a washing machine on “12 months EMI with 0% interest” but charges a small processing fee.

   • Question: What should the customer check before agreeing, and what is this promotion called?
   • Answer: The customer should check for any hidden charges like processing fees. This promotion is called full finance at 0%.

5. Scenario: A new brand of tea gives out free sample sachets at a busy train station.

   • Question: Which sales promotion method is being used, and what is its likely effect?
   • Answer: Sampling is used. It allows people to try the new tea risk-free, increasing the chance of future purchases.

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