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Qualifications Cambridge National Enterprise & Marketing Topic Area 4: Creating a marketing mix to support a product

4.4 Sales promotion techniques

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Which term describes a business paying towards an event, person or team in return for having its name promoted?
Sponsorship
Which term describes a promotion where customers enter for the chance to win a prize, often publicised on packaging or through advertising?
Competition
What is meant by 'buy one get one free (BOGOF)'?
A promotion where a customer gets a second item at no extra cost
What is meant by a 'loyalty scheme'?
A promotion that rewards regular customers each time they buy
What is meant by a 'product trial'?
Giving customers a free sample so they can try a product before buying
Which term describes an extra item that comes with a subscription or a larger purchase at no extra cost?
Free gift
What is meant by a sales promotion?
A short-term offer that encourages customers to buy
Which term describes small promotional stands and displays used in shops to encourage customers to buy extra items?
Point of sale advertising
Which of these is NOT a sales promotion technique?
Price skimming
A cafe reduces the price of every hot drink by 20 per cent for one week. Which sales promotion technique is this?
A discount
Why could a 25 per cent discount be a problem for a business selling luxury designer handbags?
It can damage the brand's premium image
Why might a new business run a competition to help launch one of its products?
It can improve awareness of the product and increase sales
What is a limitation for a business of using competitions as a sales promotion?
Prizes need to be very attractive and can be expensive
A sandwich shop runs a buy one get one free offer on its sandwiches for one day. What is a limitation of this technique?
It reduces the profit margin on the items sold
A supermarket places sweets, magazines and batteries next to its tills. Why is this point of sale advertising effective?
It attracts customers who are waiting in the queue
A skincare company gives a free sample with every online order. What is a limitation of using free gifts in this way?
Giving away and posting samples can be very expensive
What is a benefit to a business of running a loyalty scheme?
It encourages customers to return and gives buying data
A drinks company pays to sponsor a football club and its name appears on the players' shirts. What is a risk of this sponsorship?
Bad publicity involving the club can damage the brand
A new pizza takeaway offers 50 per cent off all pizzas during its first week of trading. Why is this a good use of a discount?
It brings in new customers to try the food
What is a limitation of using point of sale displays in a shop?
There is limited space around the till area
A sports drink company sponsors a local running club. Why is this likely to be an effective promotion?
It reaches people who are likely to buy sports drinks
A gym offers buy one get one free on the first month of membership. What is a limitation of this offer?
Some customers may take the free month and not join
A software company offers a free one-month trial that automatically charges customers at the end of the month. What is a limitation of this promotion?
Customers may be annoyed when the first payment is taken
Why might a business ask everyone who enters its competition to give an email address?
The entry details can be used to market to them in future