An Inept Sales Promotion

Buy One Get One Free (BOGO) – Does it really boosts the Sales?

Gone are the days when customers use to easily lure away by the gimmicks of the marketing persons.  Today the customers are cleverer and demanding than ever before. They cannot be easily caught in the snare of the companies’ ideological gimmicks as they used to be in the past. I would love to share with you a real life and an interesting anecdote which is about a sales promotion program of a well established and renowned cigarette company.

A week ago, in the afternoon, I stopped by a Pan Shop near my place, to buy a packet of cigarettes. There was an unusual rush on that Pan shop at that time. As I reached up to the counter, I came to know that some cigarette company’s Sales Promotion was going on there and a team of four Sales persons of that company were promoting their renowned and well established cigarette brand which was probably due to its attractive repacking and they might have added some more features to it so as to differentiate it more effectively from its nearest rivals. All these Sales Persons were well dressed, all of them wearing formal black pant, formal white shirt, and a tie and neatly polished black shoes. They also had a van painted nicely and having a picture of a packet of their cigarette which they were promoting. One of the Sales team members was busy in hanging a dangler which was attractively designed and printed and some 30-40 Pens inside a very nice packing were pasted on it. The pen was also a renowned brand. I was surprised for a while why the dangler containing pens is there when they were promoting their cigarette brand. I anxiously enquired one of them what they exactly want to promote, a cigarette brand or a pen brand. Then he briefed me about their consumer scheme. “If you buy a Packet of our Cigarettes which will cost you Rs. 24/-, you will get this pen worth Rs. 15/- absolutely free.”  , Said the Sales Person. Undoubtedly, the offer was attractive enough to compel a consumer of other brands of cigarette to try their brand at least once, if not regularly, and this must be the intended objective of their sales promotion program, I guess. But I had never tried their brand before, and I resist changing my brand as I have been using my brand for last ten years. Still, I was eager to take advantage of their attractive consumer scheme. While I was just pondering that somehow I must take advantage of their attractive offer and that too without changing my regular brand, an idea came into my mind. I just asked the Pan Shop owner about the usual landing rate of a Packet of their Cigarette to him. He said he earns two rupees per packet as his profit margin in the usual course i.e. when there are no such schemes. It meant the landing price of a pack of their cigarette to him is Rs. 22/- in the usual course of time. So I ordered him a packet of their cigarette by giving Rs. 24/- for it and demanded him my free pen. He gave me both the items as per the consumer scheme. I then immediately offered the Pan Shop owner to buy back the packet of cigarettes for just Rs. 20/- which I just purchased from him for Rs. 24/-  i.e. at the rate which was below Rs. 2/- than its usual landing rate (Rs. 22/-) to him. Since the Cigarette brand which they were promoting was also a fast moving brand, he happily accepted my offer and returned my Rs. 20/- to me. All this happened in front of the promoting sales team. They immediately understood that I got the pen in just Rs. 4/- by returning their cigarette pack to the shop owner for Rs. 20/-. They started pondering and analyzing their consumer offer and anxiously indulged in the discussion about it. The dismay on their face was clearly visible. After my purchase, other customers, who were standing around the counter while this deal of mine was going on, had also repeated the same process and the company’s free gift – pens – were depleted within 15 minutes after my purchase and all their cigarette packets were kept intact on the counter. Their Sales Promotion scheme which was intended to compel a consumer to use their brand at least once for which they had offered them such an attractive free pen had completely fallen flat in front of their eyes and they hardly get any time to stop all this.

In a nutshell, it has become a convention nowadays to hang a board of BIG SALE outside a retail outlet throughout the year. Today almost every company, having similar products or products with little or no differentiation, is vying to come up with a consumer scheme which will attract maximum number of customers to them. In spite of wasting their precious time on figuring out such types of consumer schemes which are now well understood by the smart customers and consumers of today, it is the high time now for the companies to think about some other ways to boost their sales. Product differentiation & Continuous Innovation can be the possible answers to their problem. Products which provide full value of money to their consumers don’t really need consumer schemes like BOGO since they sold out on their own without any such futile efforts.

By Anand Hisaria

Email: anand.hisaria@rediffmail.com