By the end of this chapter, you will be able to:
These skills will help you attract and satisfy customers, making your marketing efforts successful in the real trade world.
Compiled by: Julius Macharia
Sales promotion is a critical element of the marketing mix that directly influences consumer behavior and stimulates immediate purchase decisions. In the Kenyan business environment, where competition is intense across sectors such as retail, banking, and hospitality, effective sales promotion strategies can significantly enhance market penetration and brand loyalty. This chapter explores the various types of sales promotion techniques and focuses on the strategic use of free market samples to attract and retain customers. Understanding these promotional tools is essential for business management professionals aiming to optimize sales performance and customer engagement.
Sales promotions are short-term incentives that encourage customers to buy a product or traders to stock and sell it. They differ from advertising because they offer a reason to act now: a lower price, a free trial, a demonstration, a display in the shop or a reward for buying again. A business chooses the type of promotion that fits its product, its customers and its budget, and often combines two or more. This topic describes five types: discounts, free samples, product demonstrations, purchase materials and customer reward systems. The later topics of this chapter show how each is carried out.
A discount is a planned reduction in the normal selling price. It is widely used where customers compare prices closely, such as in retail shops and wholesale outlets. A discount can be a percentage off, a fixed amount off, or a price that falls as the quantity bought rises.
Example: A mini-supermarket sells a 2 kg packet of maize flour at Ksh 240 and offers 10% off for a weekend. The reduction is 240 × 10 ÷ 100 = Ksh 24, so the promotional price is 240 − 24 = Ksh 216. A customer who buys 5 packets pays 5 × 216 = Ksh 1,080 instead of 5 × 240 = Ksh 1,200, a saving of Ksh 120.
A well-timed discount speeds up stock turnover, reduces the cost of holding unsold goods and brings more customers into the shop. For example, a hotel that offers lower weekday room rates may fill rooms that would otherwise be empty, and the extra bookings may earn more than the price cut costs.
Frequent discounting reduces profit on each sale and teaches customers to wait for the next offer instead of paying the normal price. A business must also check that the discounted price still covers the cost of the goods and the expenses of selling them. A discount that leaves a loss on every unit sold increases sales but not profit.
A discount works best when it has a clear objective, such as clearing old stock or winning first-time buyers, and when the target customers are told about it clearly through shelf labels, posters or messages. It should also fit the brand: a business that sells on quality and service may protect its image by using small, occasional discounts.
A free sample is a small quantity of a product given to a prospective customer to try without paying. It is especially useful for products whose quality is judged by use, such as foods, soaps, lotions and cleaning products. Its aim is to turn curiosity into a first purchase.
The main purpose is to remove the customer's doubt about an unfamiliar product and to start a habit of buying it. For example, a distributor launching a new flavour of fruit juice may give out small sample cups to shoppers so that they can taste it before choosing a full bottle.
Samples can be handed out in or near shops, attached to another product the customer already buys, delivered with an order, or given at trade fairs and promotion days. The business chooses the method that reaches its target customers at the lowest cost.
Samples build awareness, let customers judge quality for themselves and encourage word-of-mouth recommendations. They are especially useful when a new product is launched or when a product enters a new area where it is not yet known.
Sampling costs money, because each sample is a product given away. It may also reach people who will never buy, and samples that are badly stored or handed out without records can be wasted or misused. The business should therefore measure how many sampled customers later buy.
Samples work well with other tools. A cosmetics retailer, for example, may include a sample sachet and a discount voucher for the full-size product in the same bag, giving the customer both a reason to try and a reason to buy.
A product demonstration is a live show of how a product works and what it does for the user, given to customers at the place of sale or at an event. It is suited to products that are new, technical or hard to explain in words, such as kitchen appliances, tools, farm equipment or cleaning machines. Customers see the result for themselves and can ask questions on the spot. The preparation and conduct of demonstrations are covered under Demonstration of market products.
A demonstration builds trust because customers see the product perform, and the demonstrator can answer objections immediately. It requires a trained person, a stock of the product and time, so it reaches fewer people than an advert and costs more per person reached. A demonstration that fails, for example because of a faulty machine, harms the sale, so the product is tested before the event.
Purchase materials, also called point of purchase materials, are the displays and printed items placed where customers choose and pay for goods, in order to attract attention and prompt a purchase. Because many buying decisions are made in the shop, these items speak to the customer at the moment of choice. Their preparation is covered under Preparation of point of purchase materials.
Materials work when they are clear, short and well placed. The message, the price and the offer period must be easy to read at a glance, the colours and logo must match the brand, and the item must not block movement in the shop. Out-of-date materials are removed as soon as an offer ends so that customers are not misled.
A customer reward system is a scheme that gives customers something of value in return for repeat purchases or for spending above a set amount. Its aim is to keep existing customers buying and to raise how much each one spends. It is usually cheaper to keep a customer than to win a new one, so many businesses build reward systems around their regular buyers. The design of such schemes is covered under Designing customer reward systems.
Reward systems provide a record of who buys what, which helps the business plan offers, and they build a habit of returning to the same shop. They cost money to run and may lose their effect if the reward is too hard to earn or if rules change without notice. The business must also keep customer details safe and use them only for the purpose the customer agreed to.
Create a free account to open more of this chapter.
Free: practical guides, quick cards, workplace scenarios and more.
Create a free accountThis chapter explored various types of sales promotion techniques that businesses use to boost product visibility and encourage purchases. It began by examining discounts-free samples, product demonstrations, purchase materials, and customer reward systems as key promotional tools. The provision of free market samples was discussed in detail, highlighting how it allows potential customers to experience products firsthand and influences buying decisions. The chapter then covered the importance and methods of demonstrating market products to effectively showcase their features and benefits. Preparation of point of purchase materials was explained as a strategic way to attract consumer attention at the sales location. Finally, the design of customer reward systems was addressed, emphasizing how these programs foster loyalty and repeat business by recognizing and incentivizing customer engagement. Together, these topics provide a comprehensive understanding of how to carry out effective sales promotions in various market settings.
At the start of this chapter we promised you would be able to:
Tick each one you can genuinely do.
So, are you there yet?
You're competent when you can confidently do 50% or more of what this chapter promised.
Sign in to record how you're doing.