High stakes promotions- Article case study

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  • 1. Business Standard- The Strategist 24th June 2013 Rohit Nautiyal

2. PROMOTION Activities performed by the companies that involves discriminating information about product, product line, brand or company. Past- 10% of marketers budget Present- 35-45% 3. Typically consumer sales promotions include discounts, contests, lucky draws, quantity gifts, financing at low interests, surprise gifts. Sometimes marketers have tried combination of these activities to lure customers into making instant purchase decisions. 4. The project at Noida extension, a new township coming up near Delhi, next to the already developed Noida-Ghaziabad border. While opening bookings for the township, the realty firms GAURSONS & SAVIOUR BUILDERS decided to gove away 60 Hyundai i10 Cars as a part of lucky draw. To give a fair chance to those who make bookings, a draw is conducted at the end of every 10th booking. (APRIL TO JUNE) Company claims that more than 400 bookings are done with 23 cars gifted to the customers so far. 5. Hungry Kya- Daily combos Treat of the week- Happy Meal Torque Auto- Skoda dealer promised a free Fabia hatchback to customers who bought Sedan. (700 bookings- 5 days!!) 6. For every pack of Marie biscuits, free glass bowl was given. This led to significant increase in sales. 7. CONCLUSION In sum, sales promotions may look like the first option to take when you need to perk up sales but research has proven it is a strategy fraught with danger. First, when you offer deals and discounts too often you may end up alienating the loyal customer. She will think there's something wrong with the brand. Worse, you may induce shoppers to wait for the next deal - bad news for your round-the-year business. The bottom line is simple: Like so many other potentially addictive behaviours, sales promotions can be healthy only in moderation.