The Marketing Book 5th Edition

PRODUCT

SWITCHER

NON

USER

RIVAL

LOYAL

BRAND

SWITCHER

OWN

LOYAL

HI LO

HI LO

WHOOPS!

RETAIN AND

ENCOURAGE

EXISTING

USERS

CONVERT

POSSIBLE

USERS

GENERATE

NEW USERS

Strategic benefits

Persuasion costs

Sales promotion 471

1 Conversion. Promotions are effective as trial
incentives, because they reduce perceived risk
and can attract non-users through additional
benefits rather than relying on the attraction
of an unfamiliar product. Consumers who are
satisfied with a promoted brand have an
increased probability of repeat purchases in
future. This is particularly true of previous
non-users (Rothschild and Gaidis, 1981).
Neilsen Promotion Services found that 55 per
cent of consumers who enter competitions
will select a brand because of a competition,
and that 95 per cent of those will repurchase
in future.
2 Retention. Providing delayed or cumulative
benefits can help to encourage repeat
purchases. ‘Collect and save’ schemes or
‘money off next purchase’ coupons can help to
retain promotion-sensitive brand switchers.
3 Acceleration. McDonald’s reached a point where
awareness levels were becoming difficult to
improve through advertising, resulting in
declining business potential from new
customers. They have therefore switched an
increasing proportion of a billion dollar

communications budget into promotions aimed

at getting more business from existing

customers. The ‘Happy Meal’ promotions

provide sets of novelties for children to

collect, changed at regular intervals to

accelerate visit frequency.

Figure 18.5 The roles of promotion in converting consumers

Communicating through sales promotions

Like advertising, promotions seek to connect

with the customer to generate awareness,

inform, entertain, and generally persuade the

customer to change their attitudes and behav-

iour in the brand’s favour. Communicating

effectively requires the marketer to develop the

right message, select an appropriate medium

and accurately target the campaign. When it

comes to targeting, promotions are more flex-

ible than advertising, which essentially pre-

sents one message at a time to the entire

audience (a ‘shotgun’ approach). By offering a

choice of competition prizes, merchandise or