Friday, March 16, 2007

Want Free GIFTS?

Everything you did right last year, seems to be stuttering away to glorious ignominy this year; competition’s biting painfully hard; sales are stabbing away; consumers aren’t even giving a third glance; the heat seems to be getting too hot... If you’re at your wit’s end, relax, we’ve got the mother of all solutions – give away your product... for FREE!

My six year old walked into a departmental store and went up to the gentleman at the counter and asked him, “Which one of these packets have the free gifts inside them? Please show me.” My jaw dropped as I watched him shop along piling things onto the shopping cart on the basis of which car, or Power Ranger toy or Superman projector they had inside them. Soon I realized I had four untouched packets of Kellogg’s Chocos, and many Sunfeast biscuits and Horlicks bottles. Once the “free gift” was taken out of them, they were abandoned by my little one, leaving me the headache of finishing them off. My first reaction to this shopping escapade was, “He is watching too much TV, and too many advertisements.” However, later I realized a simple truth: if there is one word that attracts people the world over, it’s the word ‘FREE’! This word has the capacity to stop you dead on your tracks. After all, everybody – from six year olds to sixty year olds – loves a free gift! Who could have understood this concept better than marketers who have been using this bait for years to lure unsuspecting customers into buying their products!

If all soaps can clean, if all detergents can remove dirt, if all creams could nourish the skin, if all hair oils make your hair black and shiny, then which one does one buy – probably the one with a free gift inside it. No wonder then that from cars to TVs to breakfast cereals, all are using some freebie or the other to outdo their competitors. The best part is that most of the time, they are successful as these gimmicks do work. When Pepsi was being launched in India, it came out with advertisements that invited the reader to try out the product. The headline ran like this, “Come on Bangalore! Taste the magic today!” All one had to do was tear out the advertisement, take it to any soft drink shop and exchange it for a bottle of Pepsi – for FREE! Retailers ran out of stock by the afternoon. This was an offer, which made everyone happy – the consumers, the retailers (who now were more willing to stack this new product) and of course, the company! In one go, they had created instant awareness about their brand. That day, all that Bangalore was talking about was, “Did you get your Pepsi bottle?”

Time your moves well

Sales promotion has arguably become the most important marketing tool today. It is like a short term tactile weapon available to businesses. The biggest benefit of sales promotion is that it can be conceived and implemented in a matter of days and the results can be seen in a matter of weeks, thus making it a very quick and effective technique. The immense speed with which sales promotions can be devised, organized and implemented, make the game of marketing very thrilling and exciting. In India, the best time to experience this thrill is during the festive season starting from October to January. It’s that time of the year when India goes on a buying spree, like there’s no tomorrow. As we light crackers and celebrate our Diwalis and Dussehras, corporations are busy crackling the market with fervent activity, offers and promotions. Last year, all white-good manufacturers fought the promotion war with great fervour. Samsung came out with its “Pehla Kamaal, Doosra Dhamaal” offer, where it lured customers with “assured gifts” on any purchase from its product range. This was the “Pehla Kamaal!” And a bumper prize, that is, your second chance to win a gift was the “Doosra Dhamaal!” Its competitor LG too came up with a similar offer called “Mangal Hi Mangal!” It too promised “assured gifts” on every purchase of LG products. On similar lines, you had Whirlpool with its “Take a chance or buy Whirlpool” scheme. Sansui called its offer “Ek Pataka, Double Dhamaka.” Haier too joined the frey with its “Lucky Luckier Luckiest” offer. ALL of them basically promised the same thing – just the names were different. It’s worth the effort, for according to Mr. Arvind Uppal, MD, Whirlpool India, 25% of their annual sales occur during September and October. No retailer wants to miss out on this golden opportunity when everybody is in a shopping mood! A freebie here or there always does the trick. In fact LG’s “Mangal Hi Mangal” offer was such a super success that the company recorded sales worth Rs.2,500 crores during the festive season. It was worth earmarking Rs.100 crores as the marketing budget for the season for LG. Samsung had achieved the same success a few years back with its “Phod Ke Dekho” and “Phir Se Phod Ke Dekho” campaigns.

“Phod Ke Dekho” was an offer that came packaged inside a coconut, which contained two silver coins; and the third coin had the surprise gift written on it, which could be a Samsung air conditioner or refrigerator or TV etc. The company made more than Rs.250 crores by just spending Rs. 15-20 crores! The same success story continued with their “Phir Se Phod Ke Dekho” campaign. All the action and excitement was once again packed inside a coconut. The company this time around expected to generate sales worth Rs.350 crores between October and November. And to think that it spent Rs.20 crores only.

According to market research, 16% more chocolates are sold between October and December, 20% more cars are sold and 30% more consumer durables are sold during this time. So if you want your sales promos to be successful, then timing them correctly would be very important. In India, October to December seem to be just the right months for these activities.

Aim properly

Another key factor in devising a successful sales promotion is deciding who to target the promotions towards. Horlicks has its biggest market in West Bengal, and the one sport this nation-state is crazy about is football. So Horlicks devised an offer clubbing Bengal and football. Consumers were required to predict the results of 8 football matches, where the winners would get cash prizes. Special 450 gm Horlicks bottles were designed with labels. The consumers were required to attach a label from these bottles and send it with their answers. The campaign was well planned and well executed, however not many entries were received and neither did the sales of Horlicks significantly increase. The company had made a small error. The people most interested in Horlicks were young, while men aged 15-40 – the target audience of the promotional campaign – were not the main consumers of the product, nor were they the key purchasers (mostly mothers buy this product). When it comes to children, nothing works better than cartoon character freebies; and companies are using this magic mantra like never before. Frito Lay started giving Pokemon freebies in its snack packs and saw a 100 % plus growth. Kwality Walls used Scooby Doo and its ice-cream sales shot up from 48% (in 2002) to 52.3% (in 2003); so much so that the FMCG giant Hindustan Lever used Pokemon give-aways to sell its Kissan ketchup. In fact, children come with such immense pester power that Red label thought it a good idea to give away Tom and Jerry toys with its tea pack. Mother and child both would be happy. Moral of the story – when in doubt, always use ‘cartoon power’; it never fails!

Go for gold!

When Marylin Monroe crooned, “Diamonds are a girl’s best friend,” marketers listened intently. For years, gold has been considered as a “golden” investment opportunity in India. “Gold for free” is something totally irresistible. A lot of marketers are using this bait to attract customers. Tanishq launched a very successful promotion called “Get gold free with diamonds,” where, on every purchase of diamond jewellery worth Rs.5,000 or more, you were entitled to a 22 carat one gram gold coin. The idea of “free gold” was such a hit that marketers started putting it in soaps and creams too, to give a boost to sales. So Lux came out with its Lux gold star offer where one could find a 22 carat gold coin in their soap bar. Those lucky ones who did were entitled to an additional 30 grams of gold! Fair and Lovely lured the lovely ladies with its “Dream Diamond Offer!”

If you were lucky, you could win a diamond pendant; not just this, the first 24 winners were eligible for another grand prize – a diamond set worth Rs. 1 lakh! The schemes worked like magic. Horlicks too had tried the gold-trick in the 80s. The aluminium seals in certain Horlicks jars carried a message “You have won a gold necklace” or “You have won a pair of gold earrings!” There were 20 necklaces and 250 gold earrings to be won. The result? Their sale increased by 20% during the two and half month period of the gold rush promotion!

Make them interesting

Sales promotions should be planned creatively. If they are in the form of mundane price discounts, they are not so effective. The more innovative they are, the more buff they create among the consumers, which in turn excites them to actually go shopping for the product/brand. A good offer ensures that customers remain interested and enthusiastic about your brand. With so many choices available, customers might just shift to another brand out of sheer boredom, and not because your product is bad. Sales promotions help break monotony!

Interesting names of offers – like “Pepsi’s Toss Ka Boss,” “Coke’s Aish Cash” – excite the customer and get him involved with the product. “Britannia Khao, World Cup Jao” was another promo, which sounded so catchy. and well worded that – according to research – it was the most recalled promotional activity.

Everybody is giving free gifts, but the one who does it most innovatively wins. Like Hyundai, which came out with its “Hyundai Pe Hyundai” offer where, with every purchase of Hyundai products, one got a ‘hot card’. This was not the regular scratch card, but a card which needed to be illuminated to reveal the gifts being offered. When BMW wanted to reinforce its brand value, it did a unique thing. It hired a series of race tracks around the country. The people could indulge in pigeon shooting, a non-alcoholic lunch, as well as the opportunity to circuit drive the complete BMW range. They created a lot of buzz.

Commercial property agents are everyday flooded with inspiration about new commercial developments. This particular estate agent thought of an innovative way to get the agents to visit his site. One fine morning some of the property agents received a single left hunter Wellington boot. The next day an advertisement appeared in the leading papers, listing all the agents (who had received the shoe) by name. The ad invited them to collect the matching boot on the site. A lot of them did drop by. This is a fact, customers love offers. In fact, 80% of them admit to trying a brand if it rides on the back of an offer. No wonder in 2005, 18% of overall ad space was garnered by sales promotions. So, if you want to keep the customers coming, remember to tell them first – what’s for free!

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