Promotion-Point-Of-Sale-Methods

Point of sale promotion methods

• Businesses also have a range of point of sale promotional methods they can use to persuade customers and raise awareness of their products

Point of sale methods

Price reductions

• Price reductions can include offers such as a percentage off the full price, money off when a certain amount is spent or flash sales, when certain items are reduced in price for a limited time

• Benefits of price reductions include:

  • They can persuade new customers to try out a product with less financial risk

  • Businesses commonly reduce prices on a seasonal basis to clear unsold inventory

    • E.g. January sales allow many retail businesses to sell old stock, while Black Friday creates interest in selected product ranges

• Drawbacks of price reductions include:

  • A lower level of revenue per item is generated

  • Frequent price reductions may mean that customers are less willing to pay full prices for products

  • Price reductions may need to be publicised using advertising, which can incur increased costs

Loss leaders

• A loss leader is where a business sells one or a small number of items at a loss in order to attract customers to a store

  • Supermarkets often sell everyday staple products like bananas, milk and eggs as loss leader items to entice customers to their ranges of branded products

• In doing so, the business hopes to sell other, full-priced products to customers during their visit, ensuring they make a profit

• Increasingly price-aware consumers shop around, making the most of loss leaders in different retail outlets

Competitions

• Offering customers the chance to win a valuable prize can be an effective way to attract attention to a business or product

  • E.g. UK newspaper Daily Mail is well-known for its regular competition to win a dream house

• Entry into prize draws is often linked to customer purchases, though many competitions allow anyone to enter, as it raises their profile

• Strict rules govern the way prize draws must be conducted, such as including terms and conditions

Free samples

• Providing small quantities of a product without charge to customers allows them to try it out before they buy

  • E.g. Free samples of perfume or cosmetics are often provided in magazines or in departments stores

• Supermarkets or delicatessens sometimes provide free samples of new food or drink brands, on behalf of manufacturers, for customers to taste before purchasing