What is sales promotion? Current forms of sales promotion in Vietnam

What is sales promotion? Current forms of sales promotion in Vietnam (Internet image) 

1. What is sales promotion?

According to Clause 1, Article 88 of the Law on Commercial 2005, sales promotion means activities of commercial promotion conducted by traders to promote the purchase and sale of goods or the provision of services by offering certain benefits to customers.

2. Forms of sales promotion in Vietnam

Forms of sales promotion according to Article 92 of the Law on Commercial 2005 are as follows:

- Giving samples of goods or providing samples of services to customers for trial use free of charge.

- Gifting goods as gifts or providing free-of-charge services to customers.

- Selling goods or providing services at prices lower than goods sale prices or service provision charge rates previously applied during the period of sales promotion already registered or announced. In case of goods or services subject to the State management over their prices, the sales promotion in this form shall comply with regulations of the Government.

- Selling goods or providing services together with coupons that allow customers to enjoy one or several benefits.

- Selling goods or providing services together with prize-contest entrance tickets to customers, for purpose of selecting prize winners according to the rules and prizes already announced.

- Selling goods or providing services together with opportunities for customers to participate in games of chance, the participation in which comes after the purchase of goods or services and the winning of prizes depends on the luck of participants according to the rules and prizes already announced.

- Organizing programs for frequent customers whereby gifts are presented to customers on the basis of the quantities or values of goods purchased or services used by such customers and expressed in forms of customers’ cards, coupons acknowledging the purchase of goods or services, or other forms.

- Organizing cultural, artistic or entertainment programs or other events for customers for the purpose of sales promotion.

- Other forms of sales promotion if approved by the State management agency in charge of commerce.

3. Principles of sales promotion in Vietnam

Principles of sales promotion under Article 3 of Decree 81/2018/ND-CP are as follows:

- Sales promotion program must be implemented in a lawful, honest, public and transparent manner and must not harm legitimate rights and benefits of consumers, other traders, organizations or individuals.

- The trader doing sales promotion must enable the winners to receive prizes and take responsibility to handle complaints (if any) regarding the sales promotion program.

- The trader doing sales promotion must guarantee the quality of goods and services that are target of the sales promotion (hereinafter referred to as ‘promoted product”) and goods and services used for sales promotion (hereinafter referred to as ‘promotional product”).

- Sales promotion must ensure:

+ Customers are not required to give up, refuse or exchange goods and services of other traders or organizations;

+ The trader doing sales promotion must not directly make comparisons of their goods and services to those of other traders, organizations or individuals.

- The lottery results must not be used as a foundation to determine the prize winner or to present and reward bonuses in sale promotion program in the forms prescribed in Claus 5, 6 and 9 in Article 92 of the Law on Commercial 2005.

4. Promoted product and promotional product in Vietnam

Promoted product and promotional product under Article 5 of Decree 81/2018/ND-CP are as follows:

- Promoted products must not include

+ Wines;

+ Lottery;

+ Cigarettes;

+ Breast milk substitutes

+ Medicines for human use including those permitted for circulation as regulated by the Ministry of Health (except for the case in which sales promotion is dedicated to traders involved in drug trading),

+ Examination and treatment service of public medical facilities,

+ Education service provided by public educational facilities or public vocational training facilities,

+ Goods and services that have been banned from circulation in Vietnam

+ Other goods and services prohibited from sales promotion as required by laws.

- Promotional products must not include

+ Wines;

+ Lottery;

+ Cigarettes;

+ Curative medicines for human use including those permitted for circulation as regulated by the Ministry of Health (except for the case in which sales promotion is dedicated to traders involved in drug trading)

+ Goods and services that have been banned from circulation in Vietnam;

+ Other goods and services prohibited from sales promotion as required by laws.

- Money can also be used as promotional merchandise, except for sales promotion conducted in the forms prescribed in Article 8, 10 and 11 of Decree 81/2018/ND-CP.

Quoc Dat

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