Observation

Majority of the candidates attempted this question but they could not explain the four promotional tools that can be used by the company. This made them loose marks.

Expected responses are.
(a)       Importance of sales promotions to Ozayi Limited

• The company can use sampling to introduce new products.
• The company’s productivity would be enhanced through the application of training schemes.
• The company could use gifts and awards offer on patronage to enhance impulse buying of the company’s product.
• It could enhance the image of the company’s product.
• It could stimulate high demand for the company’s product.
• It increases buyer’s awareness of the company’s products.
• It serves as a lead to the company’s sales representatives.
• It could motivate the sales force to exceed their sales targets.
• It encourages the marketing intermediaries to stock more of the company’s products.
• It strengthens the effect of advertising and personal selling activities of the company. 

Sales promotional tools to be used by the company include:

• Price off:  The Company can reduce its product prices to encourage customer patronage;
• Salesmen competition: These are incentives offered to salesmen who perform better than their colleagues;
• Free gifts: These are extra products given to customers when purchase is made to encourage them to buy in large quantities;
• Coupons: These are certificates that give buyers a stated savings on the purchases of the company’s products;
• Discounts:  The Company could use trade or cash discounts as incentives to marketing intermediaries to stock more of their products;
• Loyalty schemes:  It is used by companies to reward the customers according to how much they spend. Cash, vouchers or free goods can be used to compensate them;
• Merchandising incentives: The company uses incentives such as commission and fringe  benefit to motivate the sales force in improving their productivity towards the sales of the company’s product;
• Training Schemes: The company could send its staff and sales force to sales meetings, seminars and training courses to update their knowledge, skills and abilities so as to enhance productivity on the job;                  137
• Prizes: The company offers the chance to win cash, trips or goods as customers purchase something of value. The prizes are attached to the product packages;
• Patronage awards: The company uses cash or other awards as an incentive to customers for the regular use of a company’s product. The consumer must show evidence of product usage;
• Trade shows/ Trade fair/ Exhibition: The company could organize trade fairs / trade shows/ exhibitions with other companies to showcase and sell their products during the event.