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
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
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