Analysis of pros and cons of discount promotions

Discount promotional discounts called, is the special sales in the most direct but low-level marketing tactics. It is the manufacturer of products by reducing the normal price, the direct economic benefits for consumers, thereby promoting the consumer to buy a sales promotion. For such promotions are often double-edged sword, good for the business use to create interest and awareness, enhance sales force; mishandled, often easy to discount their products into after the sale of hard-line dilemma.
First, four forms of discount promotions

1, direct discount

Certain goods or services through direct price discounts, such as: Jiuzhe offers, special sales, promotions are a direct discount, consumers can know how much cheaper the goods. Direct way to discount a strong lead to more consumer attention and appeal, and encourage consumers to make a purchase decision, consumers increase the quantity purchased, or change the time of purchase (advance purchase) or to increase purchase frequency. Typically, the discount rate should be at least 10% -30% can affect the consumer. Can trigger a price war between brands, resulting in more sales, less profit.

For brand recognition, brand products and high purchasing frequency, consumers concerned about high consumer products, direct marketing discount effect is especially prominent. The face of product homogeneity so high, the direct effect of discount promotions for some of those well-known brands also lethal, but not very high brand awareness for those products, even to a higher discount, it is difficult to achieve good sales effect.

2, quantity discounts

For those who buy a product or service a large number of consumers a price discount. Generally in accordance with the number of how many consumers were given different price discounts, purchase The more the greater the discount. The number of consumers may provide a discount to buy a product to a certain number or amount, to give some discounts may also require consumers to buy certain kinds of products has reached a certain number or amount, according to a certain amount of the total purchase discounts.

Quantity discount is intended to encourage consumers to purchase bulk purchase or concentration, so often used to buy high frequency of large correlation between the products of daily consumer goods.

3, additional gifts

When consumers purchase a certain number or amount of the product, according to a certain percentage of companies giving similar products or to request additional or related products. "Buy one get one free" is the most common form of additional gift, the money consumers spend a product can be two products, the equivalent discount on their real or discount promotion.

This method can not only effectively stimulate consumers to buy, and can help accelerate the promoters sales targets. Commonly used in the lower unit price, packaging is simple, fast frequency of daily consumer goods.

4, dosage does not increase

Dosage does not increase and additional gifts are very similar, except that the way to the finished products before the products will be packed in gift packaging, in order to increase the amount not to sell to customers the same price to buy more products .

This approach can also stimulate consumers to buy good, especially for consumer brand names; If you are unfamiliar brands or new products, acceptance of this approach would lower some of the.

Second, the advantages of discount promotions

1, significant promotional effect

Consumers buy goods prices are often the main determinant of the time, especially for those products with high brand recognition. Therefore, the impact of discounts to consumers the largest and most effective marketing method. As the promotional discount effect is obvious, manufacturers often use this as a sudden response to market conditions, product promotions against rivals to deal with expired products or off season products, reduce inventory, speed up the recovery of its investment promotion and so on with the business, sometimes the sales staff to achieve sales goals of the emergency measures.

2, promotions and easy to operate

Companies according to different regions, different times, in allowing the promotion budget, the design of different discount rates. This promotion methods work less, are easy to control costs and risks.

3, the simplest and most effective means of competition

To counter the competitive brands product sales growth, new products to market against competitors or new policy, etc., in a timely manner with discounts to stimulate consumers to buy the product, reduce the customer's interest in competing products, and through the promotion of a large number of consumers to purchase or advance purchase, to gain market share against competitors.

4, helping to train and retain existing consumers

Activities can have some direct discount advertising effect, shaping the image of high quality low-cost products, have been used to attract customers to repeat purchase the product, to form a stable of existing consumer groups.

E, deeply welcomed by customers and the promoters

Discount promotions to attract the retail end of the pedestrian flow, to stimulate the sales of products and other products. Promoters can also be sold through discount sales of goods as quickly as possible, and because of the increasing flow of people, to stimulate other non-discount sales, accelerating sales targets.

Third, the limitations of discount promotions
1, blindly discount the fundamental problem can not be sold

Discount promotional products can increase the short sales and increase market share, but sales can not solve the fundamental problem makers, but also misled the company's correct understanding of the market is not conducive to the adjustment of product structure. Sales managers will indulge in this way the illusion of immediate sales, not thinking about solutions, even for such promotions dependence.

2, loss of profits is difficult to make up for discounts

Discount promotion if the profit margins within the control of the implementation of good, if manufacturers are competing to be caused by uncontrolled discount to business sales sink deeper and deeper, causing the loss is difficult to discount pack. For example: Assume a 20% product margin by 9.5 fold of the discount, then at least a 33% increase in sales to recover the investment; if the discount is 9 fold, you need a 100% increase in sales; if off discount in accordance with 8.5, then need to increase sales by 300%. If discount is 8 fold, it can never be profitable. think about it, and now competition is so fierce, each cut-common occurrences, but must take a scale, "Costly hit big discount", this will not only hurt other brands, but also into their own sets.

3, will often discount products and brand damage

Consumers often think that the regular discount price of high quality will be lower than the competitive brand, would consider the original price is unreasonable, will be that manufacturers are reducing the grade and quality products, will reduce the status of the brand among consumers, will reduce their value and status of the brand, product prices will result in an invisible obstruction. If consumers or customers used to discount the prices of products, brand status in the minds of consumers is that after the grade and the image of the discount.

4, discount promotions are not conducive to building brand loyalty

As the discount price may attract some attention, particularly high consumers, such consumers who are accustomed to lots of discount products, not the number of brand loyalty. Once, the end product discount promotions, they may be immediately converted to the product discount brand promotion, where relatively low. However, a high degree of brand loyalty that consumers often feel as product discounts and product, brand grade in the fall, affecting their identity and image, rather than in the choice of brand products.

5, discount promotions easily lead to price war

4P in marketing, the regulation price is the market competition of the simplest and most effective means of competition, but high-amplitude, high frequency of discount promotions lead to inter-brand competition of prices unfavorable to the maintenance of the price of product image and a reasonable profit space.

4, discount promotions operating skills

1, choosing the right promotional opportunity. Discount drink promotions such as the option of the summer or holidays.

2, activity time to 2-3 weeks is appropriate. Consumers to consider buying a normal cycle, if too long, the price may be difficult to return to in situ.

3, the amount of discount should be accounted for 10-20% of the selling price was attractive.

4, discount promotional advertising simple, eye-catching, accurate, with lethal, do not use fancy form.

5, discount promotional products to select those high maturity, consumed in large quantities, purchase frequency is high, seasonal, close to the shelf-life, technology and packaged in a weak product.

1:00 Summary:

Master David Ogilvy Advertising 鈥?decades of experience: the current use of price-cutting promotions will continue to reduce the product's reputation in the eyes of consumers. Discount promotions to meet the appropriate advertising, personal selling and public information such as marketing, business development of the whole, we must discard the blind discount direct discount promotions, price cuts, "one-man show." Without the discount promotions, and other organic elements combine together to play out the sales power, even in the short period of time so that businesses see sales and profits, but it helps to achieve strategic effect is weak development of play, or even unreliable. Create Duarte 鈥?Nielsen measured consumer purchase of state law of Bev 鈥?Murphy would call it "is a dubious selling point of the curve."







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