Many studies have focused on the effects of promotion on brand switching, purchase quantity, and stockpiling and have documented that promotion makes consumers switch brands and purchase earlier or more. Promotional schemes can actually stimulate consumption in addition to causing brand switching and stockpiling. Thus, for product categories with a varying consumption rate, it is critical to recognize the responsiveness of consumption to promotion in order to measure the effectiveness of promotion on sales more precisely. Throughout the world, consumer sales promotions are an integral part of the marketing mix for many consumer products.
Marketing managers use price-oriented promotions through TV advertisements such as coupons, rebates, and price discounts to increase sales and market share, entice trial, and encourage brand switching. In addition, consumers like promotions. They provide utilitarian benefits such as monetary savings, added value, increased quality, and convenience, as well as hedonic benefits such as entertainment, exploration, and self expression (Chandon, Laurent, and Wansink, 1997).Various kinds of tools used by advertisers to attract the consumers toward their products through television advertisements are:
· Discount or price off: In order to increase sale, many producers introduce price offer to customers. Under this, the product is offered at a price lower than the normal price. For e.g. dining off season (winter), ceiling Fans, Coolers and refrigerators may be offered at 20% or 30% off price.
· Price Packs: Price packs (also called cents-off deals) are offers to consumers of savings off the regular price of a product, flagged on the label or package. They can take the form of a reduced- price pack, which is single packages sold at a reduced price (such as two for the price of one) or banded pack, which is two related products banded together (such as a toothbrush and toothpaste). Price packs are very effective in stimulating short-term sales, even more than coupons.
· Premiums or Gift Offer: Premiums (or gifts) are merchandise offered at a relatively low cost or free as an incentive to purchase a particular product. For instance, a few of emami schemes included Emami pure skin cream free with Boroplus Advanced moisturizing lotion and ITC is offering Vivel di wills shampoo free with bathing soap.
· Packaged Premium: In this type of sales promotion marketers pack some gifts inside the product package. The gifts create desire to buy the product. One such scheme is launched by Lux Beauty Soap in which the lucky consumers could get a gold pendant inside the soap.
· Free in mail premium: In these types of sales promotion the customers do not get immediate benefit promotion the customers do not get immediate benefit at the time of making a purchase. Rather the customers are required to correspond with the marketer by sending, for e.g. a wrapper or some proof of purchase or multiple purchases to claim the benefit. For instance, a company making chocolate required the kids to send specially marked wrappers to claim gifts.
· Prizes (Contests, Sweepstakes, and Games): Prizes are offers of the chance to win cash, trips, or merchandise as a result of purchasing something. A contest calls for consumers to submit an entry – a jingle, estimate, suggestion - to be examined by a panel of judges who will select the best entries. A sweepstake calls for consumers to submit their names in a drawing. A game presents consumers with something every time they buy - bingo numbers, missing letters - which might or might not help them win a prize.
· Quantity Deals: Sometimes, sellers devise special package which gives extra quality of the product to the buyer at the same price. These deals came in the form of "Buy three, get one free" offer for beauty soaps like Nirma, Lux.