Promotion practices

Both retailers and producers use consumer-oriented promotion techniques. These practices range from coupons , premiums and deals to prizes, lucky draws, contests and sweepstakes. The most common promotion methods are the following:

1. Buy one and get one or more free

   • Open [the package] for a prize

   • More product for the same price

   • Discount coupons or token money coupons

2. Premiums

   • Collecting labels or packages for prizes

   • Numbered tickets for lucky draw

   • VIP discount card for purchases reaching a certain value

   • Prize winning contests

   • Live radio broadcast of contests

   • First-comer prize on live radio broadcast consulting on product attributes and usage

   • Event- related price reduction or discount

3. Free samples slip

   • On-site trials or demonstration

   • Mail-back for lucky draw

   • Turn in the old for a new one

   • Membership privileges

4. Free products against advertisement slip

   • Quantity discount

   • Life time warranty

   • Payment by instalments

   • Consumer credit

   • Shortage of one and compensation for ten ^[1]

5. Self-penalty for under-delivered quality ^[2]

   • Trail use on marginal cost

   • 100 per cent refund if not satisfied

The above list is not intended to be exhaustive. Obviously, these practices reflect the level of intensity in consumer market competition. When employing promotion techniques, either those listed above or others, it is important to develop appropriate consumer insights which are extremely critical in a market that is large in territory, diverse in consumer preferences across regions and rapid in its pace of change. Some research results have indicated that consumers are pragmatic in their attitudes toward promotion exercises. Buy one and get one free, price reduction or discount, discount coupons and premiums seem to be favoured by consumers.

However, marketers need to be very careful when designing promotion strategies and extreme situations should to be taken into consideration. The practice of free product offers against advertisement slips from newspapers has caused chaos in some instances when unexpected numbers of people besieged the site to claim free products that could not be offered . The guarantee of 100 per cent refund for unsatisfied consumers needs to be carefully thought out to prevent exploitation of the guarantee. Amway has run into situations where false consumers came to claim a refund with discarded or reclaimed empty bottles.

^[1] In China, some discredited factories do not deliver their promised products in terms of number or weight. To build consumer confidence, factories claim that they will compensate customers with ten times the amount of the shortage found.

^[2] A similar practice where manufacturers assure customers that if the quality falls short of what is promised, they will penalize themselves to varying degrees.