You can put products on sale by entering special offer prices on the product via Product Manager > select product > Prices & Delivery tab which then shows them marked down on the product page.
Use template tags to display the way prices and savings (which uses the {{ product.savings_calc }} tag) are shown on the product page.
You can also enter the date range that the sale will run from and to in the Main Details tab in the fields "Run Special Offer promotion between"
To show a banner striped across the product with some promo text (which appears on the product category listing page), enter the text and colour of the stripe in the fields under Using a banner enabled product template? which is also in the Main Details tab.