Sales Promotion Methods Directed to Consumer

The most effective and popular sales promotion methods directed to consumer are as follows:

Packaging and design. The packaging and design of a product is very important if it is to catch the customer's eye. It may have to compete with other product for shelf space, e.g. a supermarket may stock several types of a product but the one that catches the consumer's eye is likely to be the one put in the shopping basket. The key elements of packaging and design include colour, size, display and brand or trademark. A company uses packaging and labels or trademarks to separate its product from those of close rivals. This is sometimes called branding and brand names are a common form of promotion. The packaging of products has undergone a revolution in recent years. Soft drinks, for example are now sold in cans or plastic bottles rather than in large and heavy glass bottles.

Games and competitions. These are becoming commonplace in promoting sales of a product or service. Supermarkets, garages and travel agents often run competitions to increase sales. Newspapers have tried bingo games to increase their circulation. The prizes to be won are very attractive, e.g. 1 million, a 2-week holiday, or a car.

Games and contests are conducted only for a limited time, after which a new contest or game may be introduced. In one format, customers attempt to collect particular sets of game slips that qualify them for prizes. As game slips are distributed free with a purchase, the object is to encourage customers to purchase more frequently and more consistently in order to acquire more game slips and thus have a better chance of winning.

Pricing promotions. The idea behind a pricing promotion is to try and persuade consumers that they are getting value for money, e.g. 25 % extra free, special bonus pack, two for price of one, and 10 pence off. A seasonal sale to clear out stock from the previous season to make room for the new season's collection is a further example of pricing promotion.

Sampling. One means of launching a new product is to provide free samples of it to households. These samples can be delivered door or through a particular magazine. Hair products, washing powders/liquids and fabric softeners are often launched this way. The company hopes that once consumers have tried a small sachet sample of the product, they will go and buy the larger size bottle or packet at the shop.

Merchandising. This involves the layout of the shop, the placing of the item in the store, the use of colour and point-of-sale materials, or POS materials. It is often called the "silent salesman" or "selling through technique". The best or prime selling spots in a supermarket are the check-out areas, the shop perimeter and eye-level shelves. A child's attention is easily caught by the sweet at the check-out. Less popular products may be placed near the front of the store, with the popular items at the back. Customers may then pick up some of the less popular items on their way through the shop.

Some other very popular promotional methods directed to consumer are coupons, trading stamps, premiums, exhibitions and demonstrations, direct mail, personal appearances.

Sales Promotion Methods Directed to Dealers

Sales promotion methods directed to dealers include sales meetings, special training seminars and even factory visits provided for dealers and their salespeople. Because many products today are technical and complex, the knowledge of a dealer's salespeople can be the deciding factor in picking the sale for one brand over another.

Display allowances may be offered to dealers instead of or along with display materials. These are special monetary incentives for dealers to feature certain brands or to allot them more shelf space.

Also, in efforts to stimulate greater push by dealer salespeople, a manufacturer may offer special premiums, such as prizes, trading stamps, or push money. For example, it is common for a manufacturer, to pay a small commission for each item of that manufacturer's brand sold by a retail clerk. Automobile firms are the most frequent users of incentive programs; for example, they offer contests and free trips for their dealers' salespeople and even for the dealers themselves.

Exercises

Translate the following words and word combinations or find Russian equivalents.

1. range of activity

2. to encourage customers

3. promotion efforts

4. buy two and get one free

5. brand awareness

6. to increase shelf space

7. pricing promotion

8. point-of-sale materials

9. sales meeting

10. monetary incentive

Find English equivalents for the following Russian expressions.

1. кампания по организации и стимулированию сбыта

2. цели стимулирования сбыта

3. бесплатный образец

4. специальное предложение

5. повысить узнаваемость торговой марки

6. привлечь внимание потребителя

7. покупательская корзина

8. наиболее выгодное место для продаж

9. методы стимулирования сбыта

10. скидка (магазину) для компенсации расходов на организацию выставки товара

 

Translate the following sentences front Russian into English.

1. Газеты пробовали использовать лотерею «бинго» для повышения тиража.

2. Внимание ребенка легко привлекается конфетами около кассы.

3. Супермаркеты, гаражи и туристические агентства часто проводят конкурсы для повышения эффективности сбыта.

4. Стимулирование сбыта часто принимает форму побуждения, например «купи два и получи один бесплатно».

5. Средства стимулирования сбыта должны помочь дилерам действовать более эффективно.

Free Word-of-Mouth Marketing

(Маркетинг и повседневное общение людей)

Each year every person in the United States spends about $600 to cover the costs of huge amount that businesses spend on advertising. A family of four spends about $2400 each year. Whether or not we want to spend this much is irrelevant. That’s what it costs businesses in the USA each year. And, this does not include the additional billions of dollars spent each year on point of purchase displays, other merchandising, packaging and product placement fees. What do we get for our $600 each year? Millions of radio and TV commercials, billboards, and advertisements in newspapers and magazines — we are bombarded with thousands of advertising messages (some of them wasteful) every day.

So many advertising messages rush at us daily, we cut through all that type (which often we do not trust) to get the essence of the messages we need. Word-of-mouth (which usually we trust) allows us to sort it all out. By using the principles of word-of-mouth marketing, these businesses and, in turn, you and I, could be spending a whole lot less cash each year.

Unique among other promotion methods, word-of-mouth is the only known promotion method that is both the means of marketing and the end of marketing. It is not only a dynamic method to communicate with consumers. Also, it is the goal to which most organizations strive. Vigorous positive word-of-mouth is the quintessential sign of success in a competitive global marketplace.

Managing your successful word-of-mouth marketing program should start by using three simple steps. As you consistently apply these three steps, you can embellish them with additional activities as you have time and resources. These three steps apply universally to any enterprise, business, or organization. With these three powerful elements you will never be at a loss to know what should be doing to build positive word-of-mouth.

The three steps are:

1. FIND champion customers (and other loyal supporters),

2. INSPIRE these champions (opinion leaders), to spread your reputation,

3. THANK your champions when they bring you referrals.

 

DEFINING ECONOMICS

Economics is a science concerned with how people use available resources to satisfy their wants through the process of production and exchange.

There have been many definitions of economics in the past. The earliest definitions envisaged economics as the study of wealth and the older name for economics was "political economy". Later economics was defined as "the practical science of the production and distribution of wealth".

At the turn of the 19th century economists defined economics as a study of man's actions in the ordinary business of life. At that time economics focused on how men got their incomes and used them.

In more recent years, the subject of economics was defined more precise­ly as "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses".,

Today economics deals with data on income, employment, expenditure, prices, production, consumption, transportation and trade.

economics n - экономика (наука)

be concerned with - заниматься чём-л., касаться чего-л.

resources n - ресурсы

wants n - потребности

definition n - определение

envisage v - рассматривать

wealth n - богатство

define v - определять

distribution n - распределение

income n - доход

precisely adv - точно

relationship n - связь, отношение

scarce adj - дефицитный

alternative adj - альтернативный

expenditure n - расходы

consumption n - потребление

ECONOMICS AND ITS GREAT MAN

1. Economics is a social science concerned with how mankind organises itself to accommodate scarce resources to their wants through the process of production, substitution and exchange.

2. By the beginning of the eighteenth century economics had taken shape as an academic discipline, largely as a branch of political economy. It should be noted that the old name for economics was "political economy". Adam Smith was the founding father of modern economics as an academic discipline.

3. Adam Smith was born in 1723. For most of his life he was a professor of philosophy in Glasgow, Scotland. His first and only economics book, The Wealth of Nations, was not published until 1776, when he was 53.

4. Smith's purpose was to explain why some nations become wealthier than others. He was fascinated by the rise of industrialism in the England and Scotland of his time.

5. Over his lifetime Adam Smith's economic investigations ranged from the theory of trade to economic growth and an attempt to model the working of the economy. He believed that a free market would maximise the welfare of the population. It followed from his works that the role of government in the economy should be minimal. The government should provide defence, justice and public works. The only market intervention should be to prevent monopoly and to promote competition.

6. Smith argued that competitive business was not just a possible way but the best way to increase the wealth of a nation. He thought government restraints on competition did more harm than good.

7. Division of labour was seen by him as the source of society's capacity to increase its productivity. According to Adam Smith technical progress and free trade between nations were central to economic growth. If a country wished to improve its standard of living it had to export more than it imported.

BASICS OF ECONOMICS

The study of the choices people make in an effort to satisfy their wants and needs is called economics. Wants and needs refer to people's desires to consume certain goods and services. In economic terms, a good is a physical object that can be purchased. A record, a house, and a car are examples of a good. A service is an action or activity done for others for a fee. Lawyers, plumbers, teachers, and taxicab drivers perform services. The term product is often used to refer to both goods and services.

The people who wish to buy goods and services are called consumers and the goods that they buy are called consumer goods. The people who make the goods and provide services that satisfy consumers' wants and needs are called producers.

Economists generally classify as needs those goods or services that are necessary for survival. Food, clothing, and shelter are considered needs. Wants are those goods or services that people consume beyond what is needed for survival.

The need for making choices arises from the problem of scarcity. Scarcity exists because people's wants and needs are greater than the resources available to satisfy them. Thus people must choose how best to use their available resources to satisfy the greatest number of wants and needs.

A resource is anything that people use to make or obtain what they want or need. Resources that can be used to produce goods and services are called factors of production.

Economists usually divide these factors of production into three categories: (1) natural resources, (2) human resources, (3) capital resources. Today many economists have added technology and entrepreneurship to this list.

Natural Resources

Items provided by nature that can be used to produce goods and to provide services are called natural resources. Natural resources are found in/or on the earth or in the earth's atmosphere. Examples of natural resources on the earth are fertile land, vegetation, animals, and bodies of water. Minerals and petroleum are examples of natural resources that are found in the earth. Atmospheric resources include the sun, wind and rain. A natural resource is considered a factor of production only when it is used to produce goods and to provide services.

Human Resources

Anyone who works is considered a human resource. Any human effort that is exerted in production process is classified as a human resource. The effort can be either physical or intellectual. Assembly-line workers, ministers, professional sports figures, physicians, store clerks, and sanitation engineers are all human resources.

Capital Resources

The money and capital goods that are used to produce consumer products are called capital resources. Capital goods include the buildings, structures, machinery, and tools that are used in the production process. Department stores, factories, industrial machinery, dams, ports, wrenches, hammers, and surgical scalpels are all examples of capital goods.

Economists make an important distinction between capital goods and consumer goods. Capital goods are the manufactured resources that are used in producing finished products. Consumer goods are the finished products - the goods and services that consumers buy.

Some products can be either capital goods or consumer goods, depending on how they are used. A bicycle purchased for personal use is a consumer good. The same is not true when the bicycle is purchased by a New York messenger service. Because the messenger service will use the bicycle to make deliveries — to provide a service — the bicycle is considered a capital good.

Technology

The use of science to create new products or more efficient ways to produce products is called technology. Technology makes the other factors of production — natural, human, and capital resources — more productive. Technological advances in the computer industry, for example, have increased efficiency in the workplace.

Entrepreneurship

The risk-taking and organizational abilities involved in starting a new business or introducing a new product to consumers are called entrepreneurship. The goal of entrepreneurship is to create a new mix of the other factors of production and thereby create something of value. The entrepreneur is a person who attempts to start a new business or introduce a new product.

capital goods - основные средства, средства производства

capital resources - капитал компании, собственные фонды

consumer n - потребитель

consumer goods - потребительские товары, товары народного потребления

economics n - экономика, народное хозяйство

entrepreneur n - предприниматель

entrepreneurship n - предпринимательство

factor of production - движущая сила производства

fee n - вознаграждение, гонорар, for a fee - за плату

goods n - товар, товары

human resources - кадры, персонал, людские резервы

natural resources - природные богатства

need n - первостепенная необходимость, жизненная потребность

producer n – производитель

product n – продукт, продукция

production n – производство

purchase n - покупка, закупка, v – покупать, закупать

resource n – ресурсы, возможности

satisfy v - удовлетворять (кого-л.; чьи-л. требования, запросы)

scarcity n – нехватка, дефицит

service n – оказание услуг, обслуживание

survival n – выживание

technological advances – технический прогресс

technology n – техника, технические и прикладные науки

want n – необходимость, потребность, нужда

 

TYPES OF BUSINESSES