Ink promotions, a necessary evil in retail?

Office World News, May/Jun 2003 by Munford, Jana

Promotions are inevitable in sales to attract new customers, move product, and build brand loyalty, manufacturers and dealers must promote. But are promotions necessary for inkjet supplies? Inkjet supplies are a competitive business and it seems that every retailer is looking for a piece of the pie in terms of margin revenue. Because of the high margins inkjet supplies provide, promotions have become a necessary evil for those retailers in hopes of increasing their ink sales.

The most popular type of promotion today is the special price promotion. This promotion normally discounts inks a certain percentage point off the regular selling price. Special price promotions rank second in terms of the most frequently run promotion while free product with purchase ranked number one. The free product with purchase promotion has become very popular among the office product superstores. This type of promotion normally offers some type of paper product with the purchase of an inkjet cartridge.

Special price promotions work well because little effort needs to be applied on the customer's part to enjoy the discounts. Over the past year special price promotions have more than doubled in efforts while free product offerings have decreased by eight percent.

If a dealer is looking to increase revenue for inkjet supplies then it is imperative to offer promotions. Once a decision is made to promote inkjet supplies the question is "What type of promotions work?" The purchase of an inkjet cartridge is a necessity and not a want. Therefore customers are willing to purchase ink cartridges more willingly when they receive a savings at the time of purchase. If retailers want to reap the benefits of the inkjet supplies margin pie then more promotional efforts need to be placed on offering special price promotions.

Jana Munford is the Business Unit Manager of the Printer Supplies Group for ARS, Inc., a leader in industry analysis. Munford can be reached at 858.551.0008 or via the Internet at www.ars1.com.