Analysis of Consumer Response to Gift Promotions
Growth of consumerism has emerged as a worldwide observable fact. Business firms too have risen and realized that nothing sells if there is no demand by the consumers. Consumer sovereignty exist that states “Consumer is the King”. This research paper is an analysis of non monetary promotion and its types, consumer response to non monetary promotion and consumer expectations towards non monetary promotions. “One of the purposes of a consumer promotion is to elicit a direct impact on the purchase behaviour of the firm’s customers” (Kotler, 1998; Blattberg and Neslin, 1990). “Successful promotions reflect brand image and objectives” (Kendrick, 1998). Gift offers and promotion can result in better brand image but only if they relate to the brand. Gift promotions are used to influence attitudes and purchase intentions of potential consumers either to maintain or increase purchase intentions. “Offering a gift that fits with the product and using high equity brands is a wise strategy to positively influence purchase intentions” (Montaner; de Chernatony; Buil, 2011). It is an effective way to increase sales by encouraging new consumers to buy different brands or by motivating loyal consumers to buy more. But it is not necessary that gift promotions always achieve their objectives of increasing sales. “Free gift with purchase” offers appear to be overwhelming the market place. Whether they are in the cosmetic industry, in duty-free catalogs or in everyday supermarket shelves, marketers convince consumers to buy their product through the offer of a free gift with purchase.
“Non-Monetary promotions are defined as promotions such as giveaways (freebees) or contests in which value is temporarily added to the product at full price” (Cooke, 1983). They are used to create brand equity because of their positive effect on brand knowledge structure. “ Non- Monetary promotion may help to reinforce brand equity” (Palazon and Delgado, 2005; Montaner and Pina, 2008). “With Non-Monetary promotions the incentive is not directly experienced through a lower purchase price making it more difficult that these types of promotion influence consumers’ internal reference prices (Campbell and Diamond, 1990). “Non-Monetary promotion can differentiate brand and help communicate distinctive brand attributes, contributing to the improved brand equity” (Papatla and Krishnamurthi, 1996; Mela et al. , 1998; Chu and Keh, 2006). Thus, Non-Monetary promotions like- free gifts, free samples, sweepstakes etc. are gaining popularity giving negative effects of frequent discounts.
TYPES OF NON-MONETARY PROMOTIONS
• Gift Offers
“A gift or premium is a product or service offered free, or at a relatively low price, in return for the purchase of one or many products or services” (d’Astous and Landreville, 2003).
“A free gift is one for which the giver is not trying to get something in return or one that does not cost the giver. It offers the consumer an incentive to purchase in the form of free product or service” (Jha-Dang; Koshy, 2004). Example- On purchasing a car, the consumer is offered a complementary product like music system or accessories. The consumer may also be offered a free service such as extended 3 year warranty or free insurance. Sometime, it happens that “the product offered as a free gift constitutes an upgrade to the original purchase” (Jha-Dang; Koshy, 2004). Example- In case of laptop purchase, the consumer is offered a free Internet device or 16 GB pen drive. Here the free products appear to be ‘use complements’ to the original product. At other times “the free product can be a related product or product used in similar context” (Jha-Dang; Koshy, 2004). Example- For kitchen product, the free product is items used in kitchen such as plastic containers,...