Promotion- out of the pipeline

Question 1

What are the 8 out of the pipeline methods of promotion?

Answer 1

Special offers
Free gifts
Vouchers and coupons
Loyalty schemes
Interest free credit
Free trials/sample packs
Competitions
Trade shows and events

Question 2

What are special offers?

Answer 2

This can include Buy One Get One Free (BOGOF) and other short-term promotions on selected items.

Question 3

What are the advantages of special offers?

Answer 3

This can encourage customers to try new products, which they may then purchase again at normal price.

Question 4

What are the disadvantages of special offers?

Answer 4

Customers might feel pressured into buying more than they need, which may result in waste.

Question 5

What are free gifts?

Answer 5

Used to tempt customers to buy a products again or for the first time e.g. a free toy in children’s cereal.

Question 6

What are the advantages of free gifts?

Answer 6

Gifts that require multiple tokens/stamps can encourage repeat purchases.

Question 7

What are the disadvantages of free gifts?

Answer 7

It can be difficult to find a gift that appeals to all target markets e.g. a free toy that suits boys and girls.

Question 8

What are vouchers and coupons?

Answer 8

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

Question 9

What are the advantages of vouchers and coupons?

Answer 9

Customers feel they are getting better value for money, which attracts new customers.

It can encourage repeat purchases.

Question 10

What are the disadvantages of vouchers and coupons?

Answer 10

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 11

What are loyalty schemes?

Answer 11

Allows 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 12

What are the advantages of loyalty schemes?

Answer 12

Information on customer habits and preferences can be gathered.

Promotions can be targeted to reflect actual customer preferences.

Question 13

What are the disadvantages of loyalty schemes?

Answer 13

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 14

What is interest free credit?

Answer 14

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

Question 15

What are the advantages of interest free credit?

Answer 15

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

Question 16

What are the disadvantages of interest free credit?

Answer 16

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

Question 17

What are free trials/sample packs?

Answer 17

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 18

What are the advantages of free trials/sample packs?

Answer 18

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.

Question 19

What are the disadvantages of free trials/sample packs?

Answer 19

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 20

What are competitions?

Answer 20

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

Question 21

What are the advantages of competitions?

Answer 21

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.

Question 22

What are the disadvantages of competitions?

Answer 22

Prizes can cost substantial amounts of money.

The associated marketing costs of the competitions can be high and often packaging has to be redesigned.