I intend to use Price reduction, free offers and special offers.
The first type of sales promotion that I will use for my campaign is price reduction.
The main advantages of using price reduction are that it will attract more customers to purchase coca cola because of its cheaper price. As I have seen from previous companies using this method they have all said that customers are more likely to after value for money when it comes to two similar products and the number of sales have increased vastly. I hope that using this wit an extensive promotional campaign I will be able to achieve my objectives. Once my product has re established itself I will revert my price to its original price and resume my advertising and maintain interest in my product. The reason I have chosen to use this method of sales promotion for my product is because my product is well established an has been around for a very long time it will enable me to bring my product to everyone’s attention increase awareness of my target market and because I will be promoting an existing product which has been around for a long time it means that customers will know about the product and the company so I will be able to attract customers to purchase my product. It also allows me to achieve my objectives of making sufficient sales. The disadvantages of using this method is that by reducing the selling price you are reducing your own profit, Coca cola may lose sales in the short term but because of the business and its scale of production it will not have a big affect on the company in the long run. I believe that this is suitable for me because I already have such a large target market it will be fairly easy for me to promote my product and reach reasonable sales. If we calculate the amount this will cost me as a part of coca cola on an individual product basis it is a large loss but as coca cola generally deal with trade customers then they can bring the selling price down to shops not too low. This is done to reduce the amount of loss that is incurred by coca cola.
The second type of sales promotion that could be used for my campaign is free offer, the way I intend to use it is by offering a free toy with multipacks that are purchased. The advantages of using free offer as a form of sales promotion is that it can increase awareness of a brand and increase customer satisfaction. Another advantage of using free offer is that I can tie it in with my price reduction. The way I intend to do this is only using free offer with the larger products such as multipacks and big bottled drinks, the reason I am only offering this with higher cost goods is that I can limit the price reduction on average and use my bribe of a free toy alongside it.
Disadvantages of using this sales promotion is again similar to the disadvantages of my price reduction in terms of lost money but as this is only going to be a limited promotion then it will only be a short term disadvantage.
This may encourage new customers and existing customers to purchase my product, if I can successfully bond this with my price reduction. This is targeted at individual customers rather than my larger bulk purchasing clients, because it will not benefit the larger clients at all. I believe that this would be suitable and appropriate because if used properly can reap large rewards. This has been considered a risk by some businesses and is normally only adopted by larger companies.
The third and final type of sales promotion that I intend to use for my business is special offer. An example, of this is “buy two get one free”. The major advantages of using this type of sales promotion is that it can attract customers to purchase more than one of a product if the customer is saving money. This will help the company to increase sales and this will help to achieve their objectives. It is a good form of sales promotion to use when looking to increase the sales of a particular product so the company can gain more customers which means that customers can buy other products from a particular business.
The disadvantages of using this is that it will lose the business profit, but although the business will lose sales from the free drinks, sales will increase because to get the free drink the customer will have to purchase two bottles of drink. I believe it is suitable and can be the most effective method of all three if used properly as the offer urges the customers to purchase more to receive the discount. This is aimed primarily at individual customers because we are tempting them into purchasing more products, rather than wholesale customers.
