out-of-the-pipeline promotions

Question 1

what are the 8 out-of-the-pipeline promotions

Answer 1

-special vouchers
-free gifts
-vouchers and coupons
-loyalty schemes
-interest free credit
-free trials/sample packs
-competitions
-trade shows and events

Question 2

describe special offers

Answer 2

this can include BOGOF and other short-term promotions on selected items

Question 3

adv and disadv of special offers

Answer 3

adv
-this can encourage customers to try new products, which they may then purchase again at a normal price

dis
-customers might feel pressured into buying more than they need, which may result in waste

Question 4

describe free gifts

Answer 4

used to tempt customers to buy a product again or for the the first time (eg. a free toy in children’s cereal)

Question 5

adv and disadv of free gifts

Answer 5

adv
-gifts that require multiple tokens/stamps can encourage repeat purchases

dis
-it can be difficult to find a gift that appeals to all target markets (eg a free toy that suits boys and girls)

Question 6

describe vouchers and coupons

Answer 6

usually given in newspapers/magazines to give customers money off future purchases

Question 7

adv and disadv of vouchers and coupons

Answer 7

adv
-customers feel they are getting better value for money, which attracts new customers
-it can encourage repeat purchases

disadv
-discounts offered by money-off vouchers can reduce profits
-some customers will only spend up to the value of the money-off voucher, limiting sales

Question 8

describe loyalty schemes

Answer 8

Allow customers to collect points by making purchases, which can then be exchanged for discounts or free products in the future, e.g. Tesco Clubcard.

Question 9

adv and disadv of loyalty schemes

Answer 9

adv
-Information on customer habits and preferences can be gathered.
-Promotions can be targeted to reflect actual customer preferences.

disadv
-Customers can be wary if they feel the scheme will be difficult to set up or opt out of.
-These are time consuming and expensive to implement.

Question 10

describe interest-free credit

Answer 10

Retailers offer customers credit to
pay for goods at a later date.

Question 11

adv and disadv of interest-free credit

Answer 11

adv
-Allows customers to purchase products and then pay for them when they can afford to.

dis
-This could lead to bad debt if many customers are unable to pay by the agreed date.

Question 12

describe free trials/sample packs

Answer 12

Services like Netflix and Audible offer a free trial for a month. New products are often given away as a sample, e.g. perfume in a magazine.

Question 13

adv and disadv of free trials/sample packs

Answer 13

adv
-Customers can try the product and if they like it, will purchase at full price.
-Word of mouth can spread from customers enjoying free trials or samples.

disadv
-Some customers only use the free trial, which will cost the business with no return.
-It is possible for customers to use a free trial multiple times.

Question 14

describe competitions

Answer 14

Businesses can use competitions to encourage customers to buy in order to take part, for example the popular McDonald’s Monopoly.

Question 15

adv and disadv of competitions

Answer 15

adv
-Can encourage repeat custom as customers try to win or collect more tokens.
-Can create hype and excitement around a product, which can lead to new custom.

disadv
-Prizes can cost substantial amounts of money.
-The associated marketing costs of the competitions can be high and often packaging has to be redesigned.

Question 16

describe trade shows and events

Answer 16

Attending industry trade shows or events such as the Royal Highland Show to give out samples and engage with the public.

Question 17

adv and disadv of trade shows and events

Answer 17

adv
-Feedback from customers can be gained.
-Giving out merchandise can spread word/images of the brand.

disadv
-Some shows have very high rates for a stall.
-Large quantities of free goods have to be given away for maximum impact