by Sales Promotion refers to short term marketing efforts used to increase the demand for a product or service. It includes various incentives such as discounts, coupons, free samples, cashback offers, contests, and special deals. The main objective of sales promotion is to encourage customers to make quick purchasing decisions. It is commonly used to boost sales during a limited period, introduce new products, or clear excess stock. Sales promotion supports other promotional tools like advertising and personal selling. It creates interest and excitement among customers. Companies often use it during festivals or competitive situations. It is a flexible and effective tool that helps in increasing sales, attracting new customers, and improving overall market performance.
Needs of Sales Promotion:
1. Increase Sales in Short Period
Sales promotion is needed to increase sales quickly. It provides incentives like discounts and offers that attract customers. This encourages immediate purchase decisions. Businesses use it during low demand periods to boost sales. It helps in achieving short term sales targets. Quick increase in sales improves cash flow. Sales promotion creates urgency among customers. This need is important for maintaining business stability.
2. Introduce New Products
Sales promotion helps in introducing new products to the market. Customers may hesitate to try new products. Offers like free samples and discounts encourage trial. It creates awareness and interest among customers. This helps in gaining acceptance of the product. Successful introduction leads to long term sales. Sales promotion reduces the risk of product failure. It supports product launch effectively.
3. Clear Excess Stock
Companies use sales promotion to clear unsold or excess stock. Slow moving products can be sold through discounts and special offers. It helps in reducing inventory costs. Clearing stock creates space for new products. It also prevents losses due to outdated goods. This need is important for efficient inventory management. Sales promotion ensures smooth business operations.
4. Face Competition
Sales promotion is needed to deal with competition in the market. Companies use offers to attract customers from competitors. It helps in maintaining market position. Businesses can respond to competitor strategies effectively. Sales promotion creates a competitive advantage. It helps in retaining customers. This need is important in markets with many alternatives.
5. Attract New Customers
Sales promotion helps in attracting new customers. Offers and incentives encourage people to try the product. It increases customer base. New customers may become regular buyers. It helps in expanding the market. Businesses can reach different segments through promotion. This need supports business growth and development.
6. Increase Customer Loyalty
Sales promotion helps in building customer loyalty. Special offers and rewards make customers feel valued. It encourages repeat purchases. Loyal customers prefer the same brand regularly. This increases long term sales. Loyalty programs and discounts strengthen relationships. This need is important for retaining customers and ensuring business success.
Types of Sales Promotion:
Consumer-Oriented Sales Promotion:
1. Samples (Sampling)
Samples are free amounts of a product distributed to encourage trial. Distribution methods include door-to-door, in-store, by mail, inserted in packages, or online (digital samples, coupons for free product). Sampling is most effective for new products, product improvements, or when consumer trial is low. It reduces perceived risk—customers experience benefits before purchase. Food, cosmetics, and household products commonly use sampling. Advantages include high conversion rates (customers who try often buy) and word-of-mouth generation. Disadvantages include high cost (product given free), logistical complexity, and risk of attracting non-target bargain hunters. Sampling works best when product superiority is demonstrable in one use. For example, a new shampoo sample convinces users to switch from current brand after experiencing softer hair.
2. Coupons
Coupons offer price reductions on specific products, typically printed in newspapers, magazines, direct mail, digital formats (email, app), or attached to packages (cross-ruff, instant coupons). They stimulate trial among price-sensitive customers, encourage larger pack purchases, or defend against competitor promotions. Coupons delay price reduction until purchase, unlike instant discounts. Advantages include targeting specific segments (coupons distributed through selective media), measurable response tracking (redemption rates), and brand switching encouragement. Disadvantages include low redemption rates (typically 1-3% for mass distribution), fraud risks (counterfeit or expired coupons), and conditioning customers to buy only on deal. Digital coupons improve targeting and reduce fraud. For example, a cereal brand distributes ₹10-off coupons to non-buyers via app to encourage brand switching.
3. Premiums (Gifts)
Premiums are free items or reduced-price merchandise offered as incentives for product purchase. In-pack premiums (inside package), on-pack premiums (attached to package), or mail-in premiums (proof-of-purchase required). Premiums encourage larger purchases, build loyalty, or differentiate from competitors. Examples include toys in kids’ meal packs, collectible glasses with soft drinks, and free makeup kit with perfume purchase. Advantages include creating excitement, collectibility driving repeat purchases, and perceived added value without reducing price. Disadvantages include cost (premium plus handling), risk of attracting only premium-seekers not product-loyal customers, and logistical complexity. Effective premiums relate to the product (shampoo with comb) or appeal to target audience (adults prefer useful items like kitchenware). For example, a detergent brand offers free measuring cup attached to box, adding convenience value.
4. Contests and Sweepstakes
Contests require consumers to demonstrate skill (essay, recipe, design, video) to win prizes; sweepstakes require only entry, with winners chosen randomly. Both generate excitement, brand engagement, and data collection (entry forms capture customer information). Contests encourage deeper brand interaction (participants research product to create entries). Sweepstakes attract larger volume with lower engagement. Advantages include low cost per contact (prizes only to few, many enter), viral potential (sharing entries), and valuable customer database building. Disadvantages include legal restrictions (lottery laws require no purchase necessary), low conversion to actual purchase, and attracting prize-seekers not genuine prospects. For example, a spice brand runs recipe contest—winner gets kitchen appliance; all entrants receive coupon. The brand gains recipe ideas, customer insights, and engagement without price discounting.
5. Rebates (Cash Refunds)
Rebates offer cash back after purchase, requiring consumer to mail proof-of-purchase, receipt, and rebate form. Unlike instant discounts, rebates delay perceived price reduction and have low redemption rates (often 5-30% due to effort requirement). Manufacturers favor rebates because many consumers never claim, making effective cost lower than face value. Rebates encourage trial of higher-priced products, larger pack sizes, or new items. Disadvantages include consumer frustration (complex forms, long wait for refund), retailer resistance (rebates bypass store, offering no benefit to retailer), and negative brand perception if rebate process is difficult. Digital rebates (online claim submission, direct bank transfer) improve experience. For example, a power tool brand offers ₹500 rebate on ₹3,000 drill; only 30% claim, so effective cost is ₹150 per sale, not ₹500.
6. Loyalty Programs
Loyalty programs reward repeat purchases through points, tiers, or exclusive benefits. Customers accumulate points from purchases, redeem for discounts, free products, or experiences. Examples include airline frequent-flyer miles, coffee shop punch cards, credit card reward points, and tiered programs (silver, gold, platinum). Advantages include increasing share-of-wallet (customers consolidate purchases to one brand), building switching costs, collecting valuable purchase data, and identifying high-value customers for special treatment. Disadvantages include high administration costs (tracking systems, rewards fulfillment), copycat competition (everyone has a program, reducing differentiation), and rewarding already-loyal customers (giving away margin without gaining new buyers). Effective programs offer aspirational rewards (experiences, exclusive access) not easily copied. For example, Starbucks Rewards offers free birthday drink, mobile ordering, and personalized offers.
7. Bonus Packs (Value Packs)
Bonus packs offer extra product quantity at the regular price—”20% more free,” “buy one get one free” (BOGO), or multi-packs (three for price of two). The effective unit price decreases without reducing the selling price, which maintains perceived quality. Bonus packs encourage larger purchases, pantry loading (consumers stock up), and trial of larger sizes. Advantages include lower cost than price reduction (no change to shelf price or register systems), avoiding price war escalation, and trade acceptance (retailers earn same margin per unit sold). Disadvantages include consumption acceleration (buyers use more rather than saving money), storage issues for bulky products, and reduced purchase frequency (stocking up delays next purchase). For example, a shampoo brand offers 400ml at 250ml price—effective 37.5% discount but shelf price unchanged. Consumers perceive value without brand cheapening.
8. Trade-in Allowances
Trade-ins offer credit toward new product purchase when returning old product, common in automobiles, electronics, and appliances. The customer receives convenience (disposal of old item) and perceived savings; the seller gains used inventory for refurbishment resale or recycling. Trade-ins overcome switching barriers—customers hesitate to replace functioning products; trade-in justifies upgrade. Advantages include accelerating replacement cycles, capturing competitive customers (trade-in competitor’s product), and environmental positioning (responsible disposal). Disadvantages include complex valuation (condition assessment), handling costs (inspection, storage, refurbishment), and potential customer dissatisfaction (low trade-in value perception). For example, a smartphone brand offers ₹5,000 trade-in credit for any old phone, regardless of condition—simplifying decision and locking customer into brand ecosystem for next purchase.
9. Product Demonstrations
Product demonstrations involve live or video presentations showing product use, features, and benefits. Demonstrations occur in retail stores, at trade shows, in-home parties (Tupperware), or via online video (YouTube tutorials). They reduce perceived risk by showing results, answer customer questions immediately, and create excitement. Demonstrations are essential for products requiring explanation (kitchen gadgets, cosmetics, electronics) or where results are visibly impressive (cleaning products, food preparation). Advantages include high conversion rates (seeing is believing), impulse purchase generation, and staff training (demo personnel educate store staff). Disadvantages include high cost per contact (trained demonstrators, samples, travel), logistical coordination, and variable quality (dependent on demonstrator skill). For example, a vacuum cleaner brand demonstrates suction picking up heavy debris, instantly proving superiority over competitors that cannot be demonstrated through packaging.
Trade-Oriented Sales Promotion (Business-to-Business)
10. Trade Allowances
Trade allowances are discounts or deals offered to retailers or wholesalers for performing specific activities—slotting allowances (shelf space), display allowances (featured end-caps), or advertising allowances (cooperative advertising featuring manufacturer’s product). Allowances incentivize distribution, shelf placement, and promotional support. Manufacturers use trade allowances to gain competitive advantage—paying for visibility that influences consumer purchase at point-of-sale. Advantages include gaining distribution quickly, aligning retailer incentives with manufacturer goals, and measurable performance (retailer provides proof-of-performance). Disadvantages include high cost, potential diversion (allowance paid but retailer not complying), and legal scrutiny (excessive slotting fees may violate competition laws). For example, a new beverage brand pays ₹10,000 per store for premium end-aisle display during summer months, ensuring prominent placement when consumer demand peaks.
11. Push Money (Spiffs)
Push money (spiffs) are cash or gift incentives paid to retail salespeople for selling specific products. Unlike consumer promotions, spiffs motivate sales staff to prioritize a brand among competing options. Common in electronics, appliances, automotive, and cosmetics—where salesperson recommendation influences purchase. Advantages include immediate behavior change (salespeople actively recommend the brand), low cost per sale (paid only on results), and bypassing retailer resistance (individual incentives not requiring store buy-in). Disadvantages include ethical concerns (salespeople may mislead customers), compliance risks (must be disclosed to retailer), and temporary effect (spiff stops, recommendation stops). For example, a smartphone manufacturer offers ₹500 cash to store staff for each sale of their mid-range model, making staff actively compare and highlight its advantages over competitor models on display.
12. Trade Contests
Trade contests reward retailers, wholesalers, or salespeople who achieve specific sales targets, display goals, or creative merchandising. Contests create excitement, encourage effort beyond routine, and build relationships through shared goals. Prizes include cash, travel, merchandise, or recognition plaques. Advantages include focusing attention on specific objectives (new product launch, seasonal push), generating enthusiasm through competition, and low cost compared to blanket discounts (prizes only to winners). Disadvantages include demotivating non-winners, potential cheating (inflated sales reporting), and temporary effort boost without lasting behavior change. For example, a beverage manufacturer runs “Summer Cooler Contest”—retailer with highest case sales increase over three months wins trip to Goa. Competing retailers prominently display and recommend the brand, expanding distribution and visibility beyond routine.
13. Dealer Loaders
Dealer loaders are free products offered to retailers for placing an order of specified size—”buy 10 cases, get 1 free.” The loader increases retailer inventory, encourages larger orders, and provides free product that retailer can sell at full margin (profit on free case). Advantages include simple administration (no separate payment), immediate retailer benefit (free goods with order), and manufacturer cost control (marginal cost of free case is low). Disadvantages include retailer stockpiling (ordering beyond demand to get free goods, then buying less next order), channel stuffing (excess inventory eventually returned or discounted), and predictable response (retailers expect loaders routinely, then buy only when offered). For example, a snack company offers “buy 20 cartons, get 2 free” before festival season—retailers stock deeper, ensuring availability during peak demand without manufacturer discounting the product’s shelf price.
14. Point-of-Purchase (POP) Displays
POP displays are promotional materials placed at retail checkout counters, end-aisle displays, floor stands, shelf talkers, or digital screens. They attract attention, communicate offers, and stimulate impulse purchases at the critical moment before purchase decision. Manufacturers provide free displays to retailers, often with restocking requirements. Advantages include high visibility (consumer sees brand at decision point), differentiating from competitors on crowded shelves, and low cost per impression (display used for months). Disadvantages include retailer resistance (clutter, space constraints), display damage or disposal, and limited effectiveness for planned purchases (works better for impulse categories). For example, a battery brand provides a “battery tester” display stand at checkout—consumers test their old batteries, discover they are low, and buy new ones immediately, solving a problem they did not know they had.
Sales Force-Oriented Promotion:
15. Sales Contests
Sales contests reward individual salespeople or teams achieving specific targets over defined periods—highest sales volume, best new account acquisition, fastest attainment of quota, or most effective product mix. Prizes include cash, trips, merchandise, or recognition (president’s club, award dinner). Contests motivate extra effort, focus attention on strategic priorities (selling higher-margin products, launching new items), and break routine. Advantages include low cost (prizes only for winners, paid from incremental profit generated), measurable results, and team building. Disadvantages include short-term focus (neglecting non-contest activities like customer service), demotivation for non-winners, and potential unethical behavior (stuffing channels, misrepresenting products). Effective contests have achievable but challenging targets, multiple winner categories, and alignment with long-term strategy. For example, a pharmaceutical company runs “New Doctor Contest”—sales reps earn points for each new prescribing physician, rewarding expansion of prescriber base, not just volume.
16. Sales Force Incentive Programs
Incentive programs are structured, ongoing reward systems for achieving cumulative performance over extended periods—quarterly bonuses, annual commissions, President’s Club trips, stock options. Unlike short-term contests, incentives are built into compensation plans, creating predictable motivation. Advantages include aligning sales force behavior with company strategy (paying commission on profitable products, not just revenue), retaining top performers through aspirational rewards, and creating performance culture. Disadvantages include complexity (multiple metrics, payout formulas), potential for entitlement (expected rather than motivating), and gaming (salespeople optimizing measured metrics at expense of unmeasured important activities). Effective incentive programs balance simplicity (salespeople understand how to earn) with comprehensiveness (rewarding acquisition, retention, margin, and customer satisfaction). For example, a software company’s incentive plan pays 50% commission on new license revenue, 30% on maintenance renewal, and 20% on customer satisfaction score, aligning sales behavior with long-term customer success.
Advantages of Sales Promotion:
1. Generates Immediate Sales Response
Sales promotion creates urgency and prompts immediate purchase action. Unlike advertising which builds awareness over time, a coupon or discount triggers today’s buying decision. Time-limited offers (24-hour flash sales, weekend-only discounts) exploit fear of missing out. Buy-one-get-one offers move inventory quickly. This immediacy is valuable for clearing seasonal stock, meeting quarterly targets, or responding to competitor actions. The short-term sales spike improves cash flow and reduces inventory holding costs. However, reliance on promotion for immediate response can condition customers to delay purchase until promotions appear.
2. Encourages Product Trial
Sampling and coupons reduce financial risk for consumers trying new products. A free sample or money-off coupon removes the barrier of paying full price for an unknown brand. This is critical for new product launches where consumer hesitation is high. Once customers experience product benefits, many continue purchasing at regular price. Trial promotions convert non-users into users efficiently. For example, a shampoo sachet priced at ₹5 allows low-risk trial; satisfied users buy the full-size bottle. Without trial promotion, many superior products fail because consumers never take the first step.
3. Builds Customer Loyalty
Loyalty programs, points accumulation, and exclusive member offers reward repeat purchases, encouraging customers to concentrate buying with one brand. The more points a customer accumulates, the higher the switching cost to competitors. Tiered programs (silver, gold, platinum) create aspirational goals. Birthday discounts and member-only sales make customers feel valued. Loyal customers buy more, resist competitive offers, and refer others. However, loyalty programs must offer genuine value; weak programs waste money without changing behavior. Effective programs integrate with customer data to personalize rewards, making the customer feel uniquely recognized rather than algorithmically targeted.
4. Differentiates from Competitors
In categories with little product difference, sales promotion creates a distinguishing feature. Two identical detergents become different when one offers a free measuring cup attached to the box. A contest with an exciting prize generates buzz that a plain product lacks. Promotions make the brand stand out on crowded retail shelves and interrupt consumer habitual buying patterns. They provide a reason to choose one brand over another beyond price or quality. However, differentiation through promotion is temporary—competitors quickly copy successful offers. Sustainable differentiation requires combining promotions with unique product benefits or brand meaning.
5. Increases Retailer Support
Trade promotions (allowances, discounts, free cases) motivate retailers to stock, display, and recommend products. Retailers allocate precious shelf space to brands offering better margins or promotional support. End-aisle displays, feature advertising in store circulars, and push money for sales staff all depend on trade promotions. Without retailer cooperation, even excellent consumer promotions fail because products remain invisible. Trade promotions align manufacturer and retailer interests—both profit from increased volume. However, overuse conditions retailers to expect promotions, eroding baseline margins. Effective trade promotion strategies vary by retailer size, category role, and competitive intensity.
6. Clears Excess Inventory
Seasonal products, discontinued lines, packaging changes, or overproduction create inventory that must be liquidated. Sales promotion—price-offs, BOGO, bonus packs—moves excess stock quickly without permanently reducing list price. Clearing inventory frees warehouse space, reduces holding costs, and generates cash for new products. Unlike writing off obsolete stock, promotions recover some value while building customer goodwill (customers perceive bargains). However, frequent clearance promotions train customers to wait for discounts. Strategic inventory management reduces the need for clearance. When used sparingly, clearance promotions are effective; when routine, they signal brand weakness.
7. Provides Measurable Results
Sales promotion generates direct, trackable response. Coupon redemption rates, contest entry counts, loyalty point accumulation, and sales lift during promotional periods are precisely measurable. This accountability contrasts with advertising’s delayed and diffuse effects. Marketers can calculate return on investment (incremental sales revenue minus promotion cost) and compare effectiveness across different offers, media, and segments. A/B testing of promotional mechanics (₹10 off versus 15% off) optimizes future campaigns. However, attribution challenges remain—determining which customers would have bought without promotion. Control groups (no-offer customers) improve accuracy. Measurability enables evidence-based budget allocation, shifting spending from underperforming to effective promotions.
8. Supports Advertising Effectiveness
Sales promotion amplifies advertising impact by converting awareness into action. Advertising builds brand knowledge and preference; promotion provides the final nudge to purchase. A television ad creates desire; a digital coupon delivered immediately after viewing captures that desire before it fades. Promotion also generates trial for advertised new products—consumers remember the ad and act on the offer. Promotions can fund advertising through increased volume. Integrated campaigns use advertising to announce promotions, extending reach and credibility. However, over-reliance on promotion weakens advertising’s brand-building role. The most effective mixes use advertising for long-term equity and promotion for short-term conversion, each reinforcing the other rather than substituting.
Challenges of Sales Promotion:
1. Margin Erosion and Profitability Decline
Sales promotions reduce effective selling price through discounts, coupons, or free goods. While volume increases, profit per unit decreases. If incremental volume does not sufficiently offset margin loss, total profit falls. For example, a 20% discount requires 25% more sales just to maintain same revenue, and even more to maintain profit. Frequent promotions condition customers to expect discounts, making full-price sales difficult. The brand enters a “promotion trap” where baseline sales erode and promotional sales become the norm. Margin erosion is particularly severe for low-margin products where little room exists for discounting. Marketers must calculate break-even analysis before launching promotions: how much additional volume is needed to maintain or grow profit? Without careful calculation, promotions destroy value rather than create it.
2. Brand Equity Dilution
Sales promotion can cheapen brand perception, especially for premium or luxury brands. Discounts signal that regular price may be too high or demand insufficient. Customers infer quality from price—reducing price implies reducing quality in consumer minds. Brands built on exclusivity, prestige, or craftsmanship suffer most. For example, a luxury watch brand offering discounts damages its carefully cultivated image of enduring value. Even mass brands risk dilution: customers may view the brand as “always on sale” and refuse to buy at regular price. This challenge forces brand managers to use promotions selectively, reserving them for discreet channels (outlet stores, private sales, loyalty program members) rather than public discounting. Building brand equity through advertising takes years; promotions can erode it in weeks.
3. Consumer Conditioning to Buy on Deal
Repeated promotions teach customers to wait for discounts rather than buying at regular price. This “promotion addiction” shifts consumer behavior from need-based purchasing to deal-seeking. Customers stock up during promotions, then buy nothing during non-promotion periods. The brand experiences feast-or-famine sales patterns, complicating production planning, inventory management, and cash flow forecasting. Breaking conditioned behavior is difficult—withdrawing promotions leads to sharp sales declines as waiting customers postpone purchases. Marketers face a prisoner’s dilemma: individually, each promotion makes sense for short-term targets; collectively, promotions destroy baseline demand. The solution requires strategic discipline: limiting promotion frequency, varying promotion types (non-price offers like contests), and investing in brand differentiation that reduces price sensitivity. However, competitive pressure makes restraint difficult when rivals promote aggressively.
4. Competitive Retaliation and Promotion Wars
When one brand launches a sales promotion, competitors quickly match or exceed it. A coupon for Brand A triggers competitor Brand B’s deeper discount. The result is an industry-wide promotion war where all brands lose margin without gaining market share. Category profits collapse while consumer expectations for deals rise. Promotion wars are particularly destructive in mature, low-differentiation categories like packaged goods, airlines, and telecom. Once started, they are difficult to stop—any brand attempting to withdraw promotions loses share to those continuing. Legal considerations arise: while price fixing (agreeing not to promote) is illegal collusion, brands can signal restraint through trade association guidelines or focusing on non-price promotions (contests, samples). The best defense against promotion wars is building brand differentiation that makes price comparisons less relevant.
5. Logistical and Redemption Complexity
Physical promotions require printing, distributing, tracking, and processing coupons, rebate forms, or premium items. Each step adds cost and error risk. Coupons may be counterfeit, expired, or misredeemed. Rebates require processing infrastructure: receiving mail-in forms, verifying proofs-of-purchase, issuing payments. Delays or errors frustrate customers, generating complaints and negative word-of-mouth. Premium items (free gifts) need sourcing, warehousing, and shipping coordination. Digital promotions reduce but don’t eliminate complexity—digital coupons require unique codes, redemption tracking, and integration with point-of-sale systems. Cross-promotions (buy product A, get discount on product B) require coordination between brand teams or external partners. Small companies lack administrative capacity for complex promotions. Even large firms face fraud risks and customer service burdens. The challenge is designing promotions that are simple enough to execute flawlessly yet attractive enough to drive behavior.
6. Cannibalization Within Product Line
Sales promotion on one product may steal sales from the brand’s other products rather than expanding total category sales. For example, a buy-one-get-one offer on a premium shampoo may cause customers who would have bought the mid-priced shampoo to switch up, but overall brand sales remain unchanged while margin per unit drops. Worse, promotion on a high-volume item may cannibalize full-price sales of the same item from customers who would have bought anyway. This “brand cannibalization” is difficult to measure because incremental sales cannot be observed directly—only total sales are visible. Marketers use control groups (markets or stores without promotion) to estimate cannibalization. The challenge is designing promotions that target non-users (sampling, trade-in allowances) or encourage new usage occasions rather than shifting existing purchases. Without careful targeting, promotions reward already-loyal customers without growing the brand.
7. Short-Term Focus Over Long-Term Strategy
Sales promotion emphasizes immediate results—quarterly targets, seasonal peaks, inventory clearance. Managers facing pressure for short-term numbers overuse promotions, sacrificing long-term brand health. Advertising and product development suffer as budgets shift to promotions. The organization develops a promotion-dependent culture where strategic thinking atrophies. Brand tracking studies show that excessive promotion reduces brand loyalty, price sensitivity increases, and new product launches fail because customers wait for discounts. Breaking short-term focus requires leadership commitment to balanced scorecards that include long-term metrics (brand health, customer lifetime value, willingness to pay full price). However, when competitors promote, staying disciplined feels like unilateral disarmament. The challenge is resisting the tyranny of quarterly results while building sustainable brand value. This requires educating senior management on promotion’s diminishing returns over time.
8. Attracting Deal-Seekers, Not Loyal Customers
Promotions disproportionately attract price-sensitive switchers who have no brand loyalty. These customers buy only when discounted and leave when promotions end. They do not generate long-term value or word-of-mouth advocacy. Worse, loyal customers who would have bought at full price now buy at discount, costing margin without expanding the customer base. Promotions fail to build brand equity because deal-seekers do not develop brand attachment. For example, a hotel discount attracts bargain travelers who never return at regular rates, while displacing full-rate business travelers during peak periods. The challenge is targeting promotions to genuine prospects (non-users of the category, users of competitor brands) while excluding already-loyal customers. Targeting requires customer data and segmentation capabilities. Sampling and trade-in allowances (requiring competitor product) better target switchers than simple price-offs.
