Sales promotion is any initiative undertaken by an organization to promote an increase in sales, usage or trial of a product or service. Sales promotions are varied such as sampling, couponing, contest and sweepstake and on. The type of promotion vehicle that I want to talk about in this case is the premiums. A premium is an offer of an extra item of merchandise or service either free of at low price that is used as an incentive for purchase. Although there are two types of premium which are free premiums and self-liquidating premiums, but they have the same purpose is to increase sales and revenue.
Premiums are consumers most preferred types of promotions and have high impulse value and can provide consumers with extra incentives to purchase a product. Premiums can be used to create interest in a brand and goodwill that may enhance that brand’s image and they can be a way of generating trade interest and support. Besides all the benefits of the premiums, there are several cons that the corporations have to deal with: premiums can have high costs, there may be restrictions on the use of premiums, the redemption rates of mail in premiums are low and consumers may not perceive the premium offer as a value.
The yellow tags in Best Buy that written “$40 off on regular printer and $60 off on wireless printers with any desktop or laptop computers purchase” is the premium sale promotion’s vehicle of Hewlett Packard in the purpose of increasing their printer’s sale. Non-Franchise-Building: The tag is a non-franchise-building promotion because it accelerates the customer’s purchase decision process and generates an immediate sale. A customer may not want a printer or he already has one, but he has almost 50% off on the wireless printer while he is buying a computer, so why not?
Objective of this Sales Promotion: The main objective of this sales promotion is to increase sales, creates strong Hewlett Packard’ brand image in consumer’s mind and attracts different people to try new printer products that Hewlett Packard offers. The company’s target market is anyone who wants to experience the printing process and the need to get the print out. Hewlett Packard offers many different kinds and prices of printer products to satisfy different needs and wants. The customers now can do much more with Hewlett Packard’s printers than before and other competitors.
They can scan, copy, fax, and photo cropping within one machine. Hewlett Packard’s laser printers are also available for schools or businesses that print out thousand pages per month. Recently, Hewlett Packard has released new wireless technology for those who prefer convenient printing and dislike all the messy cables around their computers. Target Market: This promotion’s target market will be the people who are going to or buying a computer because they may want a new printer to go with their new computer.
Although, they already have a printer but they can have a better one with this good deal. The promotion also attracts competitor’s computer’s customers because some computer’s companies don’t make printer, or they make it but it is not a good system comparing to Hewlett Packard. In addition, people usually spend the most money on their computer hence they don’t have much left for their printer. Therefore, this will be a great tool to attach printer’s sale. Basically, the groups in this promotion’s target don’t have to be in a certain age or sex.
They don’t have to be similar in social class or style because they all have the same interests in printing technology and the same purposes are the printing convenience and the affordable price. In the yellow tag, it shows the instant discount, the sku numbers go with the package and the expiration date of the promotion. The yellow tag usually places next to the product’s price’s tag that is one of the ways to send the message out to the potential buyers. On the other hand, Blue Shirts are Best Buy’s employees, who are always there to tell consumers about the use, price, benefits and the promotion of the products.
They try to answer all the technical questions and help the buyers to select appropriate products that meet their needs and budgets. In addition, the manufacture hires representatives to present the promotion directly to the customers and educate the Blue Shirt about the company’s new products and promotions. Effectiveness: I think this promotion is very effective. It is not only increasing the sale of printer but also the attachments go along with it such as cartridge, paper, photo paper and USB cable.
Most profit in the printing system’s sale is not from the printers but the inks. The more they sell, the more profit is generated. Not only the manufacture increases their revenue but also the retailers. Retailers can attach other stuffs that relate to the printer, such as USB cable, wireless router or the cloth to clean it up. On the other hand, there are also some restrictions such as the promotion doesn’t work with all the printers; it’s compatible with limited model and time. The cost of the promotion is very high.
An example, the original price for a wireless printer is more than $100. Now you can save $60 per one with a computer purchase. That will be $60000 for 1000 units sold, and the discount number will be bigger because this promotion takes places in every single Best Buy stores in the nation. Overall, this promotion has been succeeded. I sold a lot of printers with this power tool. If it works with all printers model not just the one that has sku listing on the yellow tag, I think the company can generate more sales.