Consumer promotions include a wide range of tools—from samples, coupons, refunds, premiums, and point-of-purchase displays to contests, sweepstakes, and event sponsorships.

Samples are offers of a trial amount of a product. Sampling is the most effective—but most expensive—way to introduce a new product or create new excitement for an existing one. Some samples are free; for others, the company charges a small amount to offset its cost. The sample might be sent by mail, handed out in a store or at a kiosk, attached to another product, or featured in an ad, email, or mobile offer. Samples are sometimes combined into sample packs, which can then be used to promote other products and services. Sampling can be a powerful promotional tool. For example, for the past 37 years, Ben & Jerry’s has set aside one day each year as Free Cone Day, on which it invites customers to stop by its scoop shops to sample any of a variety of the brand’s classic ice cream flavors for free. Around the country, the unique sampling promotion is a huge success, with lines stretching out the doors and around the block at most shops. Officially, Ben & Jerry’s uses Free Cone Day to thank its customers for being “so uniquely awesome.” But the sampling program also generates tons of buzz and draws new customers into its shops, something that Ben & Jerrys hopes will turn into a habit.

Coupons are certificates that save buyers money when they purchase specified products. Most consumers love coupons. U.S. consumer packaged goods companies distributed 321 billion coupons with an average face value of $1.68 last year. Consumers redeemed more than 2.5 ­billion of them for a total savings of more than $3 ­billion.23 Coupons can promote early trial of a new brand or stimulate sales of a mature brand. However, to combat the increase in coupon clutter, most major consumer goods companies are issuing fewer coupons and targeting them more carefully.

Marketers are also cultivating new outlets for distributing coupons, such as supermarket shelf dispensers, electronic point-of-sale coupon printers, and online and mobile coupon programs. Digital coupons represent today’s fastest-growing coupon segment. Digital coupons can be individually targeted and personalized in ways that print coupons can’t. Whether printed at home or redeemed via smartphone or other mobile devices, digital coupon redemptions are growing much more rapidly the traditional coupon redemptions. According to one study, an estimate 40 percent of smartphone users will redeem a mobile coupon this year.24

As mobile phones become appendages that many people can’t live without, businesses are increasingly eyeing them as prime real estate for coupons, offers, and other marketing messages. For example, drugstore chain Walgreens makes coupons available to its customers through several mobile channels:25

Using the Walgreens smartphone app, customers can instantly download coupons ranging in value from 50 cents to $5, good toward anything from health and beauty products to everyday essentials such as diapers. The coupons are conveniently scannable—no clipping or printing required. Customers simply pull up the coupons on the Walgreens app and cashiers scan them straight from the customer’s phone. Walgreens also tweets mobile coupons to customers who check in to any of its 8,100 stores nationwide using check-in apps such as Foursquare, Yelp, or Shopkick. Walgreens has mobile scanning capabilities available at all of its stores, giving it the nation’s largest retail mobile coupon program. Through its mobile app, “Walgreens is using technology to go above and beyond,” says one analyst. “They’re thinking about the customer.”

Rebates (or cash refunds) are like coupons except that the price reduction occurs after the purchase rather than at the retail outlet. The customer sends proof of purchase to the manufacturer, which then refunds part of the purchase price by mail. For example, Toro ran a clever preseason promotion on some of its snowblower models, offering a rebate if the snowfall in the buyer’s market area turned out to be below average. Competitors were not able to match this offer on such short notice, and the promotion was very successful.

Price packs (also called cents-off deals) offer consumers savings off the regular price of a product. The producer marks the reduced prices directly on the label or package. Price packs can be single packages sold at a reduced price (such as two for the price of one) or two related products banded together (such as a toothbrush and toothpaste). Price packs are very effective—even more so than coupons—in stimulating short-term sales.

Premiums are goods offered either free or at low cost as an incentive to buy a product, ranging from toys included with kids’ products to phone cards and DVDs. A premium may come inside the package (in-pack), outside the package (on-pack), or through the mail. For example, over the years, McDonald’s has offered a variety of premiums in its Happy Meals—from My Little Pony characters to Beanie Boos and LEGO hologram drink cups. Customers can visit www.happymeal.com to play games, read e-books, and watch commercials associated with the current Happy Meal sponsor.26

Advertising specialties, also called promotional products, are useful articles imprinted with an advertiser’s name, logo, or message that are given as gifts to consumers. Typical items include T-shirts and other apparel, pens, coffee mugs, calendars, key rings, tote bags, coolers, golf balls, and caps. U.S. marketers spent more than $20 billion on advertising specialties last year. Such items can be very effective. The “best of them stick around for months, subtly burning a brand name into a user’s brain,” notes a promotional products expert.27

Point-of-purchase (POP) promotions include displays and demonstrations that take place at the point of sale. Think of your last visit to the local Costco, Walmart, or Bed Bath & Beyond. Chances are good that you were tripping over aisle displays, promotional signs, “shelf talkers,” or demonstrators offering free tastes of featured food products. Unfortunately, many retailers do not like to handle the hundreds of displays, signs, and posters they receive from manufacturers each year. Manufacturers have therefore responded by offering better POP materials, offering to set them up, and tying them in with television, print, or online messages.

Contests, sweepstakes, and games give consumers the chance to win something, such as cash, trips, or goods, by luck or through extra effort. A contest calls for consumers to submit an entry—a jingle, guess, suggestion—to be judged by a panel that will select the best entries. A sweepstakes calls for consumers to submit their names for a drawing. A game presents consumers with something—bingo numbers, missing letters—every time they buy, which may or may not help them win a prize.

All kinds of companies use sweepstakes and contests to create brand attention and boost consumer involvement. For example, Google’s “Doodle 4 Google” contest invited kids to design a Google logo based on the theme “If I could invent one thing to make the world a better place. . . ,” with prizes ranging from T-shirts and tablets to a $30,000 college scholarship. Kellogg’s Eggo brand hosted a Great Eggo Waffle Off! contest on Facebook, with entrants submitting their best recipes for waffles—winners received $5,000. And Dove ran a “Real Beauty Should Be Shared” contest asking its Facebook fans to name a friend and say why that friend “represents Real Beauty.” The winners became the next faces of Dove.

Finally, marketers can promote their brands through event marketing (or event sponsorships). They can create their own brand-marketing events or serve as sole or participating sponsors of events created by others. The events might include anything from mobile brand tours to festivals, reunions, marathons, concerts, or other sponsored gatherings. Event marketing is huge, and it may be the fastest-growing area of promotion. Effective event marketing links events and sponsorships to a brand’s value proposition. And with the social sharing power of today’s digital media, even local events can have far-reaching impact. For example, Delta Faucet used an imaginative event to promote its H2Okinetic low-flow showerheads—which use 40 percent less water but work just as well as competing higher-flow models—to its fitness and family-oriented target audience.28

Delta’s #HappiMess promotion campaign is based on the insight that some of its customers’ happiest moments came from making and overcoming big messes. To show target consumers first-hand how well its low-flow showerheads work under really tough conditions, Delta partnered with Warrior Dash, which sponsored several 5K mud run races around the country over the summer. At each event, Delta built a huge custom shower station, complete with 184 Delta showerheads, where mud-soaked competitors could meet and wash off after the race. “Warrior Dash is a great example of a place where people are having fun getting messy,” says a senior Delta Faucet senior brand manager. “We want people to celebrate those fun moments having confidence that we have products that will help transform them back to clean.” At one event in Indiana, 331 people gathered to shower, setting a Guinness World Record for most people showering simultaneously. After experiencing the showerheads, 75 percent of runners surveyed said they’d consider buying one. The shower stations also included a selfie station. As a result, the event boosted social media activity around Delta’s #HappiMess campaign by 85 percent and gave the brand a 50 percent sales lift.

All kinds of brands now hold events. But one-time events are rarely as effective as well-planned event campaigns that tie into a brand’s broader promotions and positioning. Consider energy drink maker Red Bull. Called by one business reporter the “mother of all event marketers,” Red Bull holds hundreds of events around the globe each year designed to bring the high-octane world of Red Bull to its community of enthusiasts (see Real Marketing 16.2).

Manufacturers direct more sales promotion dollars toward retailers and wholesalers (79 percent of all promotions dollars) than to final consumers (21 percent).29 Trade ­promotions can persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to consumers. Shelf space is so scarce these days that manufacturers often have to offer price-offs, allowances, buy-back guarantees, or free goods to retailers and wholesalers to get products on the shelf and, once there, to keep them on it.

Manufacturers use several trade promotion tools. Many of the tools used for consumer promotions—contests, premiums, displays—can also be used as trade promotions. Or the manufacturer may offer a straight discount off the list price on each case purchased during a stated period of time (also called a price-off, off-invoice, or off-list). Manufacturers also may offer an allowance (usually so much off per case) in return for the retailer’s agreement to feature the manufacturer’s products in some way. For example, an advertising allowance compensates retailers for advertising the product, whereas a display allowance compensates them for using special displays.

Manufacturers may offer free goods, which are extra cases of merchandise, to resellers who buy a certain quantity or who feature a certain flavor or size. They may also offer push money—cash or gifts to dealers or their sales forces to “push” the manufacturer’s goods. Manufacturers may give retailers free specialty advertising items that carry the company’s name, such as pens, calendars, memo pads, flashlights, and tote bags.

Companies spend billions of dollars each year on promotion geared toward industrial customers. Business promotions are used to generate business leads, stimulate purchases, reward customers, and motivate salespeople. Business promotions include many of the same tools used for consumer or trade promotions. Here, we focus on two additional major business promotion tools: conventions and trade shows and sales contests.

Many companies and trade associations organize conventions and trade shows to promote their products. Firms selling to the industry show their products at the trade show. Vendors at these shows receive many benefits, such as opportunities to find new sales leads, contact customers, introduce new ­products, meet new customers, sell more to present customers, and educate customers with publications and audiovisual materials. Trade shows also help companies reach many prospects that are not reached through their sales forces.

Some trade shows are huge. For example, at this year’s International Consumer Electronics Show, more than 3,600 exhibitors attracted some 170,000 professional visitors. Even more impressive, at the Bauma mining and construction equipment trade show in Munich, Germany, more than 3,400 exhibitors from 57 countries presented their latest product innovations to more than 530,000 attendees from more than 200 countries. Total exhibition space equaled about 6.1 million square feet (more than 127 football fields).30

A sales contest is a contest for salespeople or dealers to motivate them to increase their sales performance over a given period. Sales contests motivate and recognize good company performers, who may receive trips, cash prizes, or other gifts. Some companies award points for performance, which the receiver can turn in for any of a variety of prizes. Sales contests work best when they are tied to measurable and achievable sales objectives (such as finding new accounts, reviving old accounts, or increasing account profitability).