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Gifts & Promotions Special Edition of
Gifts & Accessories Magazine
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DEVELOPING A GIFT FOR GIFTING AND A FLAIR FOR PROMOTIONS
In the ever-changing scenario of sales promotions, a company has to crest the wave of change rather than merely flow with the tide, if its promotions are to be effective. Both gifts and strategies should be innovative enough to elicit an excited response from the consumer and not a bored `so what else is new?'
What was the hottest thing on the corporate gift list this past year? Was it on your company's gift list too? Were your gifts appreciated, and did they serve their purpose? Distasteful as that last may seem, gifts do serve a purpose. The very word 'gift', conjures up a pleasant image indeed, and mercenary thoughts like the motive behind them, seemingly have no place anywhere near it. But the fact remains that all gifts are given with a purpose. Sometimes it is given as a token of good wishes on a birthday, wedding, housewarming, or festival. Sometimes it is just something for the recipient to remember the giver by. At other times, a gift expresses gratitude or appreciation, or seeks to reward loyalty, good performance; the list can go on.
In the corporate world, depending on the reason for gifting, gifts are broadly classified into two types - gifts to promote goodwill and gifts to promote sales. The first type is primarily given to reward loyalty and good service. Many companies give their employees some token of appreciation every year. In India Diwali presents an ideal occasion. While boxes of sweets seem the most popular, probably because sweets are inextricably tied up with the festival of Diwali, sometimes a note of variety is introduced in the way it is presented. For example, Marico Industries gave all its employees Diwali sweets in Tupperware containers last year.
Sometimes gifts are given away, to sales employees, distributors, etc., to celebrate the launch of a new product or when sales figures have crossed targets. Nestlé India had got some wristwatches custom made for distribution among its sales force some time back. These are goodwill gestures and the gifts in such cases may or may not carry the company or brand logo.
Gifts to promote sales are given with basically three objectives in mind, as all Promotions Managers agree. They are - to reward loyal customers, to bring fence sitters who cannot decide between brands to one's side, and of course, to attract new consumers. When given as an expression of appreciation, the giver looks for innovation and, without doubt, quality. The gifts are generally items that the receiver would certainly like to have, but may not necessarily buy for himself. It is here that crystal clocks, brass desktop accessories, good quality pens, curios, novelty items, etc. enjoy popularity. The more the novelty value, the better, concur managers in charge of promotions across companies. Calculators have been given away from time immemorial now, it would seem. But it does bear repetition as it is used quite frequently. The smart thing to do is give a calculator with a creative twist, e.g., one that doubles up as a ruler or as a picture frame.
Making your gift work for you
Promotional drives that aim to attract new consumers in the open market may involve giving away gifts along with the product, on-pack gifts as they are called. It is good strategy to make use of the seasonal sentiment in these drives as many FMCG companies do. Mr Pradeep Mansukhani, Chief Executive Officer, Sales, Marico Industries Limited, says their promotions are usually seasonal, with a regional flavour. One of Marico's products is Parachute Jasmine, a perfumed hair oil. This particular product was offered with a free gift of a framed picture of Goddess Lakshmi, in Maharashtra, at Diwali last year. It took advantage of the fact that Maharashtrians celebrate Pehli Angol, or the traditional Diwali bath, at this time and perfumed oil is very much a part of the ritual. The gift depicting Lakshmi was most appropriate as in the days following the bath, comes Lakshmi Pujan. Another drive of the same company at the same time involved a gift of a non-stick kadhai, along with their edible oil product, Sweekar, during Ganesh Chaturthi. Again it made sense as, during festivals, Indians normally make and consume a lot of homemade sweets, and fried ones at that! Similar religious occasions in various parts of the country can provide ideal opportunity for such promotional programmes.
The gifts given away have to stand the test of quality for them to be effective. At Nestlé this is given a lot of importance. Quality certainly takes precedence over looks, according to them. Safety standards are also set and followed diligently. It will not do to have a child hurt by the sharp edge of a pencil box she got as a gift along with her health drink, for instance. Cost to the company is overridden by the need to please and reward the consumer, they say. The company's product Milkmaid almost always comes with a free gift. This is purely to reward loyal consumers, not to increase sales as the product enjoys a niche market.
Some promotional strategies have fared consistently well through time. One such is the age-old 'one for one', or 'three for the price of two' kinds of promotions. From the local vegetable vendor who lures customers with his chaar ka ek, dus ka teen sales pitch to the FMCG giant Hindustan Lever who offers two bottles of Vim dishwash liquid for the price of one, with even the free scrubber enjoying the one for one scheme; everyone has tried and experienced the effectiveness of this particular strategy. The 'more for the same price' scheme works, but the cost involved is high, as the manufacturing cost of the appropriate container is steep. But if the company plans to use the same scheme the succeeding year also, it is cost-effective, avers Mr Mansukhani. Promotional effectiveness is monitored, of course. Most companies find that the sales invariably go up during the period of promotion, but it is the sales figure after about three months that is all important. If net sales have increased, the promotion has been successful, obviously. The trend is meticulously monitored.
With pharmaceutical companies, promotional gifting is a round-the-year exercise. As they are not allowed to advertise any but their over the counter or OTC products, they have to target the professional who prescribes these products. And so, to ensure that the brand remains in the doctor's memory, they give away small items like pens, penholders, paperweights, notepads, calendars, and similar stuff. These desktop reminders, as they are called, naturally have the product name and company logo emblazoned prominently on them. Given the large number of drugs in the market, this works out to the tune of one gift per sales visit. There is an exhaustive range of gift items available to cater to this perpetually increasing market. Pharmaceutical companies also have information charts printed that are distributed in doctors' clinics. For example, a chart with information regarding the human heart, in a language understandable to the lay person, may carry the name of a cardiovascular drug at the bottom. That is a kind of promotion in itself.
Keeping pace with change
All promotional gifts have to be innovative and in keeping with the current trends. For instance, it would be terribly outdated to give away videocassettes now as they have become almost obsolete and people may not even have VCRs anymore. DVDs, on the other hand, would be more appropriate. Gifting items that have become very common is another absolute no-no. Digital diaries were all the rage at one time, but give one now and it will probably lie unused, unless it has some special feature hitherto unheard of. Reliance Infocom recently gave away Internet kits, the USB cables that connected mobile phones to laptops, to their employees. What could be a better gift, both in terms of usefulness as well as relevance to the company's own products?
In today's world of extensive advertising and increased consumer awareness, the entire concept of a brand has changed. Everything from newspapers to radio stations to banks to health services are marketing themselves as brands, and are working overtime to improve their 'brand image'. This need for sprucing up of image leads to an important question - what is the best promotional strategy to adopt? Consumers, especially of late, have proved to be very fickle with their loyalties. They are constantly seeking something new as they are easily bored with anything that is repeated. So companies are researching and adopting new methods of promotion every day.
Innovation is the name of the game
The last decade saw a lot of emphasis on the `point system' wherein consumers accumulate points; usually arrived at by computing a small percentage of the money they spend. They are encouraged to redeem these points against the gift items or services advertised alongside. While this worked like a dream when it was first introduced, as an idea it seems to have worn thin, because too large a number of companies have adopted it.
Fun Republic, the multiplex theatre that has started operations in Mumbai now, following the huge success of its Ahmedabad venture of the same name, has consciously veered away from this system. They have begun a Rewards programme that provides a membership to consumers at their theatre. Members can avail of a leisure package, using coupons that entitle them to a free soft drink, a meal, or a movie ticket, depending on the value of the movie tickets they purchase. These coupons can be redeemed within a week at the theatre complex. Ms Snigdha Vishal, Team Executive, Fun Republic, stresses on the fact that they do not follow the usual membership pattern that encourages accumulation of points redeemable only in the distant future. Instead, the emphasis here is on free, instant, and tangible gifts, as gifts indeed they are. So money spent translates directly and immediately into value gained. This has proved to be a very good strategy as the very first month's results show a whopping 5000 plus membership figure.
This success has not come cheap. Research was conducted to understand the need of the consumer. A target group -- in this case it was young adults with a certain spending capacity -- was focussed on. The tactic was worked out on the assumption that people generally go to a movie theatre in groups, or at least as a couple, and that they almost always buy something to eat and drink while there. When they get a free ticket, the urge to use it is powerful, and so they buy a ticket for their companion when they come to redeem the privilege. The cash register rings again for the company, the feel good factor prevails on the consumer, it is a win-win situation all around.
You scratch my back, I'll scratch yours!
Another course gathering momentum is collaborations in the gifting game! Of course this has been around for a long time in the fast moving consumer goods market under the name of cross promotions. But increasingly, the trend within other market sectors too is to follow this path. So one may get a gift of audiocassettes along with printer cartridges. Or a discount offer for a stay at a prestigious five star hotel when buying an airline ticket or when shopping. Last year, customers running up a bill of more than Rs 4000 at the Shopper's Stop, Mumbai, were entitled to a free stay at a hotel in Goa. Users of Orange network get all kinds of discount coupons, at clothing stores, at entertainment centres, at bookstores, restaurants, hotels, department stores, the works. All this goes to show that tie-ups are the name of the game now. So what is the ideology behind this? Obviously, both the participating parties seek a symbiotic relationship. As in all cross promotion ventures, the cost has to be weighed against the perceived profits. In the Shopper's Stop instance, the incentive for the shopper translated into good sales for the shop, and provided an advertisement, in Mumbai, for the hotel in far away Goa. In the case of consumer goods, the company manufacturing the product that is offered free looks at the reach of the other product, as what is of vital importance is not so much high volumes of sales as market penetration.
Sony Music, now, has played on both sides of the ball court. For promotional gifting of its own products, it prefers to adhere to a relevant theme. For example, the company had Swiss Army knives custom made for the promotion of the movie Lakshya. For Kal Ho Na Ho the gift was a small desktop timepiece. The memento for the album Patience by George Michael, who was cutting one after a hiatus of eight long years, was an hourglass. All three, through strong thought association, kept the respective product in the memory of the user.
On the other hand, Sony Music also provides promotional gifts for other companies in the form of cassettes and CDs, custom made or otherwise. But the custom made music CDs are the most popular gift items now, according to one of Sony Music's managers, who is in charge of business development. Its promotional campaign for Citibank NRI accounts, titled India Calls, had a specially made audio CD with theme-relevant songs including an exclusive one sung by singer Shaan. Customised gift packs of their DVDs, VCDs, and audio CDs have helped Videocon and Aiwa, sell their DVD Player and Hi-Fi Music System respectively, like hot cakes. The packing of the company's CDs, the cover of its cassettes, the tamper-proof seal, all go a long way in achieving customer satisfaction.
One trend that has gained exponentially in popularity over the recent years is a free holiday or a trip abroad. These are offered as incentives to everyone from consumers to traders to employees. Contests like answering simple quizzes, or penning a slogan also go a long way in promoting brand recall. Lucky draws, of course, have been around for a long time. Only now the prizes for winning are different! What used to be attractive a few years ago, like a dinner set or gold coins, have now lost their charm. Nowadays, for the excitement-seeking consumer, a date with a celebrity, or vouchers for dinner at a fine restaurant probably wield much more attraction.
The bottom line is, one has to keep pace with changing trends and preferences. Research has to be constantly conducted on what the consumer is looking for. Market research outfits have never had it so good! It's a fast changing world with equally fast changing consumer profiles. A new year, a new idea, a new fad.
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