Increasing category expansion and consumption
Sales promotions are likely to stimulate demand by creating new occasions for purchase or by increasing the consumption rate of consumers. In certain situation, the purchase of a product category gets accelerated. Sales promotions such as displays can create new purchase occasions by the reminding the customer that the displayed product is good for growing children (protein biscuits). Other products, for example noodles or potato chips purchased on promotion in multiple units, can increase the consumption rate, which is often the objective of many promotions.
One example can be of condensed milk, (Milkmaid). An attractive display of this brand is arranged and a free recipe book is given on purchase of 2 packs. This is quite likely to increase the rate of consumption of this product and consumers will be tempted to try different recipes.
In case of many high-involvement products, promotions can help consumers to realise that a certain product would serve as a good gift item (a silk sari, camera, a Cadbury pack, Ray-Ban sunglasses, etc). In some cases, there is a certain price limit beyond which the consumers will not buy a product. However, a price promotion offer lowers the price of the product below the customer’s price limit, and thus a purchase occasion is created. Many customers buy cars when available on promotion such as interest-free installments, which otherwise they are not in a position to buy on down payment. Of late, this is happening in case of almost all brands of computers.
Observations in the market place point to the likelihood that brand switching, repeat purchasing, purchase acceleration and consumption, all occur simultaneously. The net result, however, is that sales promotions work.
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