The Marketing Book 5th Edition

Table 18.1 Major forms of consumer promotions

Promotion Key user sectors Notes Examples

Discount pricing
and sales

FMCG firms,

retailers

Additional volume must compensate for lost

revenue. Can spark price wars. Generally a

defensive move

January sales. Retailer campaigns such as

‘Asda Price’. Amazon offers a 40% discount

on a customer’s ‘First Anniversary’

Money-off coupons FMCG grocery
retailers

Redemption rates determine costs. Requires

retailer co-operation. Allows some

differential pricing

Mattel Inc.’s 1988 toy marketing campaign

involved 582 million coupons

Refunds FMCG consumer
durables

Avoids problems of reference price changes.

Non-redemptions reduce costs compared to

discounts

To boost UK sales of its Windows XP

operating system, Microsoft offered a £50

cashback deal during the first quarter of

2002

Samples Foods, toiletries Expensive. Encourages trial. Effectiveness
hard to measure. Can generate market
research

Agree shampoo became No. 1 in the US

market within 6 months by using 31 million

samples

Payment terms Consumer
durables, retailers

Reduces real cost rather than price. Useful

for seasonal demand smoothing

Interest-free credit offers. In 2001 brands

including Compaq, Microsoft and Mitsubishi

used ‘Buy now, pay later’ promotions

Multipacks and
multibuys

Packaged goods,

retailers

Best for small, high purchase frequency items Kodak used a 3-for-2 offer on its Ultra film

during 2001 to help boost its share of the

crucial winter/festive season market

Special features Consumer
durables

Often packaged as a ‘special’ or ‘limited’

edition

The Citroen Xsara West Coast special

edition was a major success, offering over

£1000 of extras including air conditioning

and metallic paint plus a reduced price

Quantity increases Packaged foods,
canned drinks

Relies on ability to customize packaging

processes

Canned beers feature regular 500 ml for the

price of 400 ml

In-pack premiums Packaged goods Items placed in foodstuffs needs care
regarding food safety

During 2000 Kelloggs put Sesame Street

beanie toys into 25 million cereal boxes

In-mail premiums Packaged goods Usually relies on handling houses for
redemption

Stonegate Egg’s offer of Chicken Runmovie

tickets, T-shirts and egg cups helped to sell

5.2 million extra eggs during 2000