Promotion - Out-of-the-Pipeline Flashcards
What is Out-of-the-pipeline?
Out-of-the-pipeline sales promotions are offered by the retailers to encourage customer to purchase products from them.
What are methods of Out-of-the-pipeline?
- Special offers
- Free gifts
- Vouchers and coupons
- Loyalty schemes
- Interest-free credit
- Free trials/sample packs
- Competitions
- Trade shows and events
What are special offers?
This can include Buy One Get One Free (BOGOF) and other short-term promotions on selected items.
What are the advantages of special offers?
- This can encourage customers to try new products, which they may then purchase again at normal price.
What are the disadvantages of special offers?
- Customers might feel pressured into buying more than they need, which may result in waste.
What are free gifts?
Used to tempt customers to buy a product again or for the first time.
Example: A free toy in a children’s cereal.
What are the advantages of free gifts?
- Gifts that required multiple tokens/stamps can encourage repeat purchases.
What are the disadvantages of free gifts?
- It can be difficult to find a gift that appeals to all target markets.
Example: a free gift that suits boys and girls.
What are vouchers and coupons?
Usually given in newspapers/magazines to give customers money off future purchases.
What are the advantages of vouchers and coupons?
- Customers feel they are getting better value for money, which attracts new customers.
- It can encourage repeat purchases.
What are the disadvantages of vouchers and coupons?
- Discounts offered by money-off vouchers can reduce profits.
- Some customers will only spend up to the value of the money-off vouchers, limiting sales.
What are loyalty schemes?
Allows customers to collect points by making purchases, which can then be exchanged for discounts or free products in the future.
Example: Tesco Clubcard.
What are the advantages of loyalty schemes?
- Information on customer habits and preferences can be gathered.
- Promotions can be targeted to reflect actual customer preferences.
What are the disadvantages of loyalty schemes?
- 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.
What is interest-free credit?
Retailers offer customer credit to pay for good at a later date.
What are the advantages of interest-free credit?
- Allows customers to purchase products and then pay for them when they can afford to.
What are the disadvantages of interest free-credit?
- This could lead to bad debt it many customers are unable to pay by the agreed date.
What are free trials/sample packs?
- Services like Netflix and Audible offer a free trial for a month. New products are often given aways as a sample.
Example: Perfume in a magazine.
What are the advantages of free trials/sample packs?
- Customers can try the product and if they like it, will purchase as full price.
- Word of mouth can spread from customers enjoying free trials and samples.
What are the disadvantages of free trials/sample packs?
- 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.
What is competitions?
Businesses can use competitions to encourage customers to buy in order to take part.
Example: Mcdonald’s Monopoly.
What are the advantages of competitions?
- 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.
What are the disadvantages of competitions?
- Prizes can cost substantial amounts of money.
- The associated marketing cost of the competitors can be high and often packaging has to be redesigned.
What is trade shows and events?
Attending industry trade shows or events such as the Royal Highland Show to give out samples and engage with the public.
