a) The Company would like to gain visibility and the cost effective manner is to freely distribute give away items like pens or key chains with their name and logo branding. The advantage is consumers love anything received free and use the item till it last. As long as pen or key chain is being used the consumer will constantly be reminded about the brand and there will be additional free publicity with the audience who will come in contact with the free gift receiver.
b) Even channel partners appreciates give away gifts as they can keep their regular consumers happy by distributing it or to impress new customers by starting their relationships with a free gift. Depending on the quantities received the channel partner controls the distribution and in rare cases even runs his own scheme where the buyer need to qualify for the free gift by either buying more numbers or a fixed value.
c) When the channel partner knows the local terrain and are even market savvy then they even cross promote the product to increase their market penetration for the same or other products in their basket to get the maximum mileage. Few trade partners are so money motivated that they will even try to sell the free products to make a killing. The gift items which carries a market value tend to be sold at wholesale market thus defeating the purpose of the gifting. Brands which have suffered their market operating prices take extra care while giving their products at a lower price when volumes are large.
d) Some smart Companies purposely run the gifting scheme so as not to change their price list but still allow discounting to take place at the market level for achieving strategic purpose. For example to increase their market share or local supremacy.
e) At the same time we have very lazy Companies (thinking for these Companies is very painful so they take easy path!) where sales department prefers operating on cash discounts month after month instead of leveraging that cash discount by offering different schemes from time to time to increase their return on investment.
f) The various gifting schemes can be run at either the consumer or trade or even at distributor level depending on the end objective. Smart operators fill up the shelves of retailers before the competition and season starts as once the trader has bought the material he is committed to finish that stock before he can even consider investing in other available options.
g) When the products are more or less similar at that time a attractive offer to non buyers can help in increased trials and thereby creating set of new users who become regular buyers.
h) Free offers helps in activation process as that is the proof of the pudding that you are acquiring new customers.
i) Bundling of items to increase sales at the consumer level helps in liquidating excess stocks and even preempting entry of new competitive brands by blocking the entry points even at the trade points.
j) If your product is similar and very difficult to differentiate then gifting is a good way to ensure that you achieve your numbers by influencing the consumers with attractive offers.
k) Trade partners many times fall for attractive schemes as they want the gift item and thereby indirectly committing to push and liquidate the stocks by new trials.
l) The best way to increase the consumption at consumer level is to influence him to buy bigger size item or more numbers and simultaneously dump more stocks of products at retail level where consumers are open to buying similar products and brand plays a smaller role.
m) Price is easy to match but when you come with various schemes as a smart marketer then the trade and competitor find it difficult to match your range of armories.
n) Apart from the differentiation of the product even your gifting strategy can play a big role in increasing your market share.
o) Smart brand look for connection with their products when identifying the right gift to increase brand recall and to connect with their target audience. (kajal with purse mirror as gift).
p) You just need an open mind with very clear objective to devise a totally new gifting game plan to increase your market share in a particular area to gain local supremacy. Depending on the success of the scheme you can fine tune it to roll out state wise, region or even nationally.