I grew-up in a family where shopping is a competitive sport. When I was younger, we lived in the U.S. and almost all our weekends were spent inside shopping malls where my female relatives would spend hours upon hours shopping. As the car would approach the mall, my grandmother would excitedly open the car door even as the car was still moving. As soon as the car would stop, she would jump out hurriedly even though the mall was still closed. We would agree to meet at a certain time, but they would inevitably ask for an extension of their shopping time. When we would finally get home after a whole day of shopping, they would whip out their finds and show them off one by one. They would try to outdo each other over who got the best bargains, deals, price offs, or giveaways with their respective purchases. Often many of the goods purchased would remain in shopping bags unused or given away as gifts or forgotten altogether.
Not all shoppers are like my relatives. However, it cannot be denied that most consumers love deals and promotions. Whether it’s a buy one take one, a 20% discount, a free gift, or a chance to win a prize in a raffle, consumers often enjoy participating in sales promotions. This is also a favorite tool of marketers to induce trial for a new product, to promote brand switching, to encourage repeat purchases, to stimulate more purchases, and to create excitement.
As a result of the proliferation of sales promotions, consumers have come to expect these as a regular occurrence. They have been spoiled for deals and expect to be rewarded for their patronage and loyalty through various sales promotions.
This article will look at the 6 consumer benefits of sales promotions that may account for the enduring popularity of this marketing tool.
1) Savings Benefit
This is the most obvious consumer benefit from sales promotions. It can provide perceptions of monetary savings by lowering the unit price of the promoted product, by offering more of the same product for free, or by providing refunds or rebates for purchase of products. Both the size of the price reduction and the deviation from a reference price can create perceptions of monetary savings and can reduce the pain of paying. The Savings Benefit often motivates the economical shopper. These shoppers may be on a tight budget and will actively look for deals that will allow them to enjoy extra savings. This benefit is also critical during bad times when price sensitivity increases due to lower discretionary incomes.
2) Quality Benefit
By reducing the price of the product, or by offering a smaller package size, sales promotions can relax budget constraints and enable consumers to upgrade to a better product. Like the savings benefit, the quality benefit boils down to increasing value for money but, unlike the former, it usually involves spending more money.
For example, my friends and I took a trip to Europe as we were enticed by an airline promotion in which business class tickets were offered at 50% off. While we would typically purchase economy tickets, the promotion encouraged us to upgrade to a better product.
3) Convenience Benefit
Sales promotions can improve shopping efficiency by reducing search costs. This is done by helping consumers find the product they want or by reminding them of a product that they need to buy. Advertising frequently purchased products with even a slight price off will often remind consumers that they are running low on this product or that they need to stock-up on this product. When I am in a grocery store and I chance upon my brand that happens to be on promo, I will automatically purchase it. I stock-up on it even though I may not need it just yet. It provides shopping efficiency and ease of decision-making. For example, my brand of toilet paper often features an incentive to buy in bulk by bundling an extra roll with the big packs.
4) Value Expression
Some consumers respond to sales promotions to meet personal or moral values such as being a “smart shopper" or a "good homemaker". For this type of customer, value encompasses the gratification earned from fulfilling one’s duty. Other consumers respond to sales promotions to express and enhance their sense of themselves as savvy shoppers, and earn social recognition or affiliation.
My female relatives exemplify this type of shopper. By finding excellent deals, they enhance their self-image of being savvy shoppers. This also allows them to earn social recognition from their peers as others look on admiringly at their shopping conquests.
Because sales promotions are constantly changing, and because they attract consumers’ attention, they can fulfill intrinsic needs for exploration, variety and information. I have friends who are always searching for new products, services, and experiences. They will often try a new restaurant, sample a new product, or even switch brands in response to a promotion. This benefit satisfies their need to experience and explore new products and services, which they would not have otherwise tried had there not been a promotion.
Many sales promotions such as raffles, contests, and free gifts are intrinsically fun to watch and to participate in. The prospect of winning or the thrill of reaching a spend threshold to earn a free gift brings the element of play or competition, which is a strong driving force for purchasing.
Some examples of sales promotions that produce entertainment value for both onlookers and participants include supermarket games such as spinning a roulet for a chance to win a prize or grabbing as much groceries as you can in 60 seconds. I have seen mild-mannered contestants transform into a world-class shopping athlete in these types of contests.
For as long as there are bargain hunters, deal seekers, and thrill seekers, promotions will continue to endure as one of the most popular marketing tools.
On Your Mark, Get Set, Shop!
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About the Author
Frances Yu is the former Chief Retail Strategist of Mansmith and Fielders, Inc. For more information, please email firstname.lastname@example.org.