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Promotion (Out of the Pipeline (Retailers) (Special Offers (These are…
Promotion
Out of the Pipeline (Retailers)
Special Offers
These are offers such as Buy One Get One Free (BOGOF)
Advantages:
This can encourage customers to try new products, which they may then purchase again at normal price
Disadvantages:
Customers might feel pressured into buying more than they need, which may result in waste
Interest-free Credit
Retailers offer customers credit to pay for goods at a later date
Advantages:
Allows customers to purchase products and then pay for them when they can afford to
Disadvantages:
This could lead to bad debt if many customers are unable to pay by the agreed date
Loyalty Schemes
These allow customers to collect points by making purchases, which can then be exchanged for discounts or free products in the future
Advantages:
Information on customers habits and preferences can be gathered
Promotions can be targeted to reflect actual customers preferences
Disadvantages:
Customers can be wary if they feel the scheme will be difficult to set up or opt out of
These are time consuming and expensive to implement
Vouchers and Coupons
Usually given in newspapers/magazines to give customers money off future purchases
Advantages:
Customers feel they are getting better value for money, which attracts new customers
It can encourage repeat purchases
Disadvantages:
Discounts offered by money-off vouchers can reduce profits
Some customers will only spend up to the value of the money-off vouchers, limiting sales
Free Gifts
These are used to tempt customers to buy a product again or for the first time
Disadvantages:
It can be difficult to find a gift that appeals to all target markets
Advantages:
Gifts that require multiple tokens/stamps can encourage repeat purchases
Into the Pipeline (Manufacturers)
Trade Credit
Description
Manufacturers allow retailers to pay for items at another date
Disadvantage
This could lead to debt if retailers cannot pay for stock
Advantage
Retailers can pay with the money made selling the stock
Merchandising Materials
Description
Free posters and display materials are given to retailers
Disadvantage
Retailers are left to dispose of these come the end of the promotion
Advantage
This can enhance the look of a store
Bulk-Buying Discount
Description
Discounts encourage retailers to stock up on a product
Disadvantages
Retailers may overstock
Products may go out of date/fashion
Advantage
Retailers save on unit cost, meaning greater profits
Sale or Return
Description
Manufacturers buy back any unsold stock
Disadvantage
Products may be returned in poor condition, creating waste
Advantage
It allows retailers to try new products without being stuck with stock