Promotion is a marketing activity based on distribution. It is a marketing method where manufacturers use distribution channels and special tactics to boost product sales. Promotion covers a wide range, including promotional mixes, personal selling, advertising, brand promotion, and public activities. There are many types of manufacturer promotions, but broadly they can be divided into two parts:

I. Consumer-Centric Promotion Types

1. Vouchers or Discount Coupons: Definition: Vouchers are a reward mechanism used by manufacturers and retailers to encourage consumer purchases. For example, when a customer spends a certain amount, they receive a valuable certificate that can be used for future purchases. Operational Points: This valuable certificate can only be used in designated areas and for specified product categories. It often has strict restrictions on usage. Typically, it can only be used for products at regular prices, not for special offers. When using the voucher, any amount exceeding the voucher's value must be paid in cash by the customer; vouchers cannot be exchanged for cash, and any unused portion cannot be refunded in cash. Generally, these vouchers have relatively high face values, commonly 50, 100, 200, or 500 yuan. The purpose is to encourage consumers to make large purchases to stimulate consumption.

2. Bonus Packs: Definition: Bonus packs are a short-term price reduction tactic used by manufacturers. Operational Points: This involves providing customers with a certain quantity of free identical products. This promotion is very common in supermarkets, often referred to as "buy X get Y free."

3. Special Prices or Discounts: Definition: Special prices or discounts are a promotional tactic that directly reduces the existing price of a product. Operational Points: The discount rate varies; if the discount is too large or too small, customers may doubt the authenticity of the promotion. Additionally, such special price information usually specifies the discount period and location.

4. "Rebate" Promotions: Definition: Rebates to consumers are not redeemed at the time of purchase but require a certain process to complete. They are a reward and feedback mechanism for consumers who purchase products. Examples include "buy one get one free" or "win 5 yuan." Operational Points: Rebate markers are usually attached to or printed directly on the product packaging. For example, rebate markers for alcoholic beverages are typically placed on the bottle cap. After purchasing a product with a rebate marker, the consumer must mail the rebate label back to the manufacturer, who then sends a check for the rebate amount to the consumer.

5. Lottery Promotions: Definition: Consumers qualify for a lottery by purchasing manufacturer products, and their reward is determined by the draw. Currently, lottery sales are one of the most attractive promotional tactics because the prizes are often enticing, and many consumers are willing to try this risk-free purchase activity. Operational Points: Prizes should be attractive enough to consumers, and the tiered prize design should be reasonable. The winning rate should not be too low, otherwise consumers may feel it's fake. Currently, Chinese law stipulates that the single prize amount for lottery sales must not exceed 5,000 yuan. In addition, except for instant-win prizes, to enhance credibility, the organizer usually invites notary authorities to supervise the draw and publishes the results in local newspapers with large circulation.

6. Sampling: Definition: Sampling involves manufacturers distributing their flagship products to target consumers to attract attention to the product and brand, thereby expanding brand influence and influencing trial users' future purchases. This includes giving away small packages of new products and on-site distribution. Operational Points: Samples must be qualified products that have passed inspections by relevant national authorities. Furthermore, samples distributed with promotional leaflets must obtain permission from designated advertising authorities. For example, P&G has extensively distributed samples of "Pantene" shampoo in supermarkets to enhance consumer awareness of the product. This is suitable for promoting new products.

7. Live Demonstrations: Definition: Live demonstration promotions aim to help customers quickly understand product features and performance by demonstrating specific usage methods on-site, stimulating purchase intent. For example, some small appliance manufacturers often demonstrate the use of tools like steam irons, food processors, various cleaning tools, and health products in the main aisles of hypermarkets. Operational Points: The demonstration location should be carefully chosen to avoid obstructing the main aisle traffic while providing enough space for customers to stop and watch. Additionally, the safety and display effectiveness of demonstration props should be evaluated. The biggest advantage of live demonstrations is that they allow customers to experience the product firsthand, gain sensory understanding, and stimulate impulse purchases.

8. Contests: Definition: Manufacturers design Q&A knowledge about the company and products, and consumers answer questions at the promotion site to promote the company and products. Operational Points: Contest prizes are usually physical goods, but sometimes free travel is offered as a reward. Contest locations can vary; companies sometimes hold game-style programs on TV stations and distribute their products during the show to achieve promotional goals.

9. Gifts: Definition: Companies distribute products related to their brand at certain occasions to increase brand and product awareness. Operational Points: When choosing gift forms, attention should be paid to their "match" with the target audience. Also, the quality of gifts matters. For example, some companies try to distribute shopping bags printed with company and brand logos in stores to enhance consumer recognition. However, if the bags are of poor quality, it can leave a bad impression on consumers, making it seem like a trick rather than a promotion, which is meaningless.

II. Enterprise and Organization-Centric Promotions

In addition to advertising and personal selling, manufacturers also use sales promotion tools in transactions with intermediaries. These tools mainly include trade allowances and volume discounts.

10. Shopping Cards: Definition: Shopping cards are issued at a discount by retail hypermarkets and some enterprises and institutions. Every year, government agencies and enterprises traditionally give employees certain benefits. In recent years, this form of benefit has shifted from physical goods to shopping vouchers. Because these cards give employees a wide range of choices and reduce intermediate steps, lowering operational costs, they have become a mainstream promotional tool for retail hypermarkets targeting closed group buyers. Operational Points: Since it is a consumption card, it should be usable across different stores within the same retail system and should be convenient for settlement in the store. Otherwise, if using the card is too cumbersome, it can easily lead to disputes. Additionally, to avoid disputes, cooperation with enterprises and institutions should be guaranteed through signed contracts. Currently, the state has regulatory requirements for the use of shopping cards, so companies involved in such promotions should be cautious.

11. Volume Discounts: Definition: Volume discounts refer to manufacturers giving intermediaries or wholesalers giving retailers a certain amount of free identical products based on the quantity purchased. For example, buying ten cases gets one free. The purpose is to incentivize intermediaries to increase purchase volumes. Operational Points: The discount points and forms should be matched as closely as possible with the interests of these intermediaries. Also, the operational steps should be simplified as much as possible.

About the Author: Huang Jing, an expert in back-end system design for retail stores and a researcher on supplier-retailer relations. With over ten years of professional purchasing experience, from state-owned large retail enterprises to foreign hypermarkets, she has served as purchasing section chief, purchasing manager, purchasing director, and training director, giving her comprehensive experience in the modern retail industry. She has conducted in-depth research on supplier-retailer relations, especially on purchasing issues, negotiation issues, fee issues, contract issues, and various conflict resolution issues that suppliers care about.

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