Sales Promotion
An Empirical View of the Different Types of Consumer Promotions in India
Authors: Priya Jha-Dang and Abraham Koshy
Abstract The paper provides an empirical view of the range of promotions launched in the Indian market place from 1996 to 2003. The different promotions include free gift offers, price offs, extra product offers, exchange offers, buy-more-and-save offers, contests and sweepstakes. The most frequently launched promotion is the free gift offer followed by the sweepstake offer and extra product offer. Some differences in trends are found across FMCG, Consumer Durable and Service sectors. A detailed description of each type of promotion is provided in order to highlight the different incentives offered by such promotions.
An Empirical View of the Different Types of Consumer Promotions in India
Expenditure on sales promotion by various marketing companies in India is estimated to be Rs. 5,000 crore and is growing at a robust pace every year (Economic Times June 15, 2003). Companies in an attempt to drive sales offer various kinds of consumer promotions from price offs, extra product, freebies, scratch cards. In the year 2001, there were as many as 2,050 promotional schemes of all kinds in the Rs 80,000 crore FMCG industry. In the year 2000, the number stood at 1,954 schemes (Financial Express, 2000). There have been very few discussions in sales promotion literature about how different types of promotions may be classified. One dimension, which has been suggested to classify different promotions, is the price versus non-price nature of the promotion (Campbell and Diamond, 1992; Blattberg and Neslin, 1990). Price promotions are defined as ‘promotions such as coupons, cents off, refunds and rebates that temporarily reduce the cost of the goods or service’ (Cooke, 1983). These promotions focus on the reduced economic outlay required to obtain a good or service. Non price promotions are defined as ‘promotions such as giveaways or contests in which
Authors: Priya Jha-Dang and Abraham Koshy
Abstract The paper provides an empirical view of the range of promotions launched in the Indian market place from 1996 to 2003. The different promotions include free gift offers, price offs, extra product offers, exchange offers, buy-more-and-save offers, contests and sweepstakes. The most frequently launched promotion is the free gift offer followed by the sweepstake offer and extra product offer. Some differences in trends are found across FMCG, Consumer Durable and Service sectors. A detailed description of each type of promotion is provided in order to highlight the different incentives offered by such promotions.
An Empirical View of the Different Types of Consumer Promotions in India
Expenditure on sales promotion by various marketing companies in India is estimated to be Rs. 5,000 crore and is growing at a robust pace every year (Economic Times June 15, 2003). Companies in an attempt to drive sales offer various kinds of consumer promotions from price offs, extra product, freebies, scratch cards. In the year 2001, there were as many as 2,050 promotional schemes of all kinds in the Rs 80,000 crore FMCG industry. In the year 2000, the number stood at 1,954 schemes (Financial Express, 2000). There have been very few discussions in sales promotion literature about how different types of promotions may be classified. One dimension, which has been suggested to classify different promotions, is the price versus non-price nature of the promotion (Campbell and Diamond, 1992; Blattberg and Neslin, 1990). Price promotions are defined as ‘promotions such as coupons, cents off, refunds and rebates that temporarily reduce the cost of the goods or service’ (Cooke, 1983). These promotions focus on the reduced economic outlay required to obtain a good or service. Non price promotions are defined as ‘promotions such as giveaways or contests in which
References: Blattberg R. and Scott A. Neslin (1990), Sales Promotion: Concepts, Methods, and Strategies. Englewood Cliffs, NJ: Prentice Hall. Blattberg R.C, Briesch R. and Fox E.J. (1995), “How Promotions Work,” Marketing Science, Vol. 14, G122-132. Campbell, L. and Diamond, W. D. (1990), “Framing and Sales Promotion: the Characteristics of a Good Deal,” Journal of Consumer Marketing, Vol. 7, pp.25-31 Cooke, Ernest F., “What is Sales Promotion?” paper presented at Sales Promotion Workshop, Babson College, May 23, 1983. Diamond W. D. (1992) “Just what is a ‘Dollar’s Worth? Consumer Reactions to Price Discounts vs. Extra Product Promotions, ” Journal of Retailing, Vol. 68, pp. 254-270. Diamond W.D., and Sanyal A., (1990), “The Effect of Framing on Choice of Supermarket Coupons,’’ Advances in Consumer Research, Vol. 17, pp. 494-500 Diamond W.D., and Campbell, L. (1989) “The Framing of Sales Promotions: Effects on Reference Price Change,” Advances in Consumer Research, Vol. 16, pp. 241-247. Simonson, I., Carmon Z. and O 'Curry S. (1994) “Experimental Evidence on the Negative Effect of Product Features and Sales Promotion on Brand Choice,” Marketing Science, Vol. 13 (1), pp. 23-41. Smith M.F. and Sinha I. (2000), “ The Impact of Price and Extra Product Promotions on Store Preference,” International Journal of Retail and Distribution Management,” Vol. 28, pp. 83-92.