In recent years, promotional methods and approaches have evolved significantly, such as buy-one-get-one offers, roadshows, bundles, coupons, lucky draws, points, and special prices. But how effective are these promotions? Promotion without sales, product price declines, market cross-dumping... Most companies find it difficult to achieve their intended goals. The author of this article summarizes the common problems in corporate promotions into the following ten misconceptions.

Misconception 1: Gifts Don't Understand Customers' Hearts The role of gifts can be divided into two types: one is to entice customers to repurchase, and the other is to cater to customers' tendency to be greedy for small advantages, stimulating their impulse to buy. However, some companies, when conducting buy-one-get-one promotions, fail to properly grasp customers' psychology when selecting gifts, inadvertently making the following two mistakes.

  1. Emphasizing the price of the gift rather than its value, failing to cater to consumers' strongest psychological needs. Gifts are not about being more expensive, but about being more loved by customers. Human psychology is strange; for an ordinary housewife, giving a 3-yuan drink is not as good as giving a 2-yuan soy sauce, but for young people, giving a 2-yuan soy sauce is far less effective than giving a 1.5-yuan drink. The choice of promotional gifts is not about how expensive they are, but about choosing what can most touch their hearts based on the psychology of different consumer groups. When promoting, we must tailor gifts to different consumer groups' mindsets.
  2. Gifts are just an unexpected bonus, not the driving force to induce repeat purchases. In 2003, Anhui Zhenxin Company used a gift promotion of buying sunflower seeds to give exquisite cards of the Twelve Beauties of Jinling from Dream of the Red Chamber, which made some children repeatedly buy to collect the characters they wanted. However, some companies only think about getting more people to buy their products in advance, never considering how to make consumers buy repeatedly. For example, for rural women around 25, urban women around 35, and elderly people around 60, what kind of gifts would make them repurchase? One is a combination of household items they want, such as small hardware for the kitchen. Another is a series of children's toys; when a child has a "Sun Wukong" and wants "Tang Seng", "Zhu Bajie", and "Sha Seng" to match, consumers generally choose to buy products with such gifts again. Therefore, choosing a promotional gift that whets their appetite based on the psychological characteristics of the consumer group to encourage multiple purchases is the best choice for buy-one-get-one promotions.

Misconception 2: Lack of Innovation and Targeting in Promotions Looking at the DMs of some large supermarkets, they basically say "buy X get Y", "promotional price", "discounted price", indicating that many promotional activities are essentially "direct price reduction or disguised price reduction". This clearly shows a lack of connection with the product. In early 2002, when Coca-Cola's "Qoo" product was launched in Beijing, its positioning was a juice drink for children aged 5-12 with a mysterious formula, priced over 20% higher than market leaders like Huiyuan Juice. At that time, under fierce market competition and with the new product not widely recognized by consumers, after distribution, product turnover was difficult, and sales were lukewarm. Many sales staff strongly demanded price promotions to compete with leading juice brands, hoping to gain market share through price and product advantages. Ultimately, the marketing department, after research, resisted the strong sales pressure and took a new path of promotional innovation: since Qoo's launch used "character marketing", let's do "character promotion". So, buying Qoo drinks gave away "Qoo" dolls, McDonald's children's meals included Qoo drinks and gifts, Qoo lucky tree draws, Qoo face mask collection, Qoo roadshows... Although there wasn't the frenzy seen after price promotions, sales kept rising, and the product's growth period was particularly long. Three years later, it is still selling well, unlike some domestic brands that come and go quickly. Here, could any other juice product use Qoo's promotional methods? The answer is no. This is also an important reason why Qoo's promotional innovation was effective and the product achieved long-term success. This reflects that many companies don't care what their product is or what characteristics it has. If they can identify the product's specificity, they don't need to copy a promotional activity that is popular in the market. At that point, they can boldly implement promotional innovation.

Misconception 3: Wrong Timing of Promotions A friend of the author works at a state-owned feed company. The company was originally profitable and had never done promotions. Later, other companies caught up, and this company panicked, hastily convening a sales meeting. Salespeople complained: "Other companies do great promotions; farmers get a T-shirt for buying a bag of feed, and dealers get a trip to Singapore, Malaysia, and Thailand if they do well." The company thought, "That's not hard; we can do that too!" In the south, June to August is the busy farming season, when farmers are busy with double cropping, and aquaculture is in the off-season. The company thought, "In the off-season, we must stimulate farmers to buy." So, they made T-shirts with the product slogan on the back and the company logo on the front, which were indeed beautiful. By the end of July, salespeople returned from the market and complained, "Why are you distributing promotional items so late? Others did it long ago." It turned out that competitors had distributed all T-shirts by the end of May because farmers don't have time to buy feed during the busy season; they buy feed before the busy season. At that time, your T-shirts were still being made!

Misconception 4: Short-sightedness, Neglecting Cultivation of Loyal Customers Generally, promotions aim to achieve three goals: first, to steal customers from competitors; second, to reward existing customers; third, to stimulate new customer purchases. But what does our marketing department aim to achieve when planning promotions? This is probably a question they rarely think about. In reality, while we complain about consumers' lack of loyalty, we ourselves never treat loyal customers differently from ordinary ones. We do a hundred promotions a year just to get more people to buy our products within a certain period. So, how should we treat different types of customers differently to build loyalty? For products that consumers might buy repeatedly, especially those with high unit prices, after the first purchase, give them a membership card, offer appropriate discounts in normal times, and during promotions, give them additional discounts beyond the promotional offers. When the cardholder spends a certain amount, give them a gift as a surprise, or tell them they can add 20 yuan to buy a product that others need 80 yuan to buy. Wouldn't that make customers more loyal to your brand? If companies that can use this promotional method combine temporary promotions with long-term ones, the effect will naturally show over time—use temporary promotions to grab competitors' customers or attract new ones, and use membership cards to guide loyal customers to buy long-term. Why not do both?

Misconception 5: Blindly Discounting and Reducing Prices Undoubtedly, low-price promotions have become the main content of promotional activities. Many companies think that using price as a promotional tool and discounting as a promotional activity is invincible. But everyone knows this is a "double-edged sword" that hurts others and also hurts oneself, and it will eventually be abandoned. Therefore, if promotional innovation can prevent prices from falling due to promotional activities, maintain stability, and still achieve good promotional results, that would be a major breakthrough. Here's a recent case from the milk industry in Hefei market. A milk beverage company entered a monopolistic market. Under pressure from a strong competitor's buy-eight-get-two offer, knowing that both sales and profits could suffer greatly, and unable to protect both, they resolutely went against the grain, hoping to protect profits. So, the regional manager boldly raised the product price and conducted channel promotions (raising the price by 2 yuan per box, giving intermediaries 1 yuan more rebate than before), using the "extra" 1 yuan per box profit for bus body advertising. This unexpectedly succeeded: not only did it thwart the competitor's scheme, but market share increased from 5% to nearly 20%, and the product price rose by 2 yuan per box without any loss in profit. More importantly, brand awareness and image greatly improved, establishing a high-end brand image in consumers' minds. All this was beyond their dreams! Of course, this is related to Hefei being a provincial capital with relatively strong consumption capacity and consumers being less sensitive to price increases, but this unprecedented price-increase promotion method is something many companies need to learn from. It ruthlessly refutes the fallacy that "only price reductions can win competition, defeat opponents, and gain higher market share"! Promotional activities and price reductions should be two marketing factors that are avoided simultaneously. First, both consume corporate resources and reduce profits. Second, the meaning of promotion is to attract consumers through newer methods rather than traditional price changes, without adjusting prices. When companies do promotions, they should try not to use price reductions, for the sake of long-term product development and achieving both sales and brand success. But now, there are very few companies that do promotions without reducing prices. That's why most domestic brands "come and go, each leading for a year or two". There's no brand accumulation; they're just selling products. I think this is an important reason why we lack century-old brands like McDonald's and KFC. Of course, if promotions must be combined with price, it's crucial to carefully examine whether consumers still have patience for price promotions. Many companies now turn short-term price promotions into "long-term promotions" or "daily promotions", equating promotion with price reduction, which is absolutely unacceptable! If you want to use price tools to promote sales, it must only be short-term! If short-term promotions don't work, long-term ones won't either. Everyone knows Coca-Cola's prices are extremely transparent, and price promotions generally cause big fluctuations, so they should be used cautiously. But the company uses them skillfully, with sudden price changes, two-day short promotions, sales limits, etc., maximizing the effect of discount promotions. The reason why discount promotions are increasingly criticized by industry insiders is that low-price promotions don't grasp the essence of marketing. So, discount promotions either lead to channel price cuts, cross-dumping by dealers, or attract competitor attacks. Eventually, consumers will think, "Everyone has it," and promotions not only fail to stimulate consumption but also cause consumer resentment, leading discount promotions into a dead end.

Misconception 6: "One-shot" Deals "Promotion" is not a "one-shot" deal, but providing quality products and long-term service. Whenever there are major festivals or holidays, companies usually launch vigorous promotional activities. But in these lively activities, we must be wary of "one-shot" behaviors, where after-sales service is neglected or long-term service lags, creating a situation where customers are "God" during the activity but "servants" after it ends. In this way, the incentive effect of promotional activities disappears with the end of the activity, making promotion only a temporary effort and falling into the misconception of promotional activities.

Misconception 7: Zero-sum Competition, Lack of Strong Alliance and Complementarity "Promotion" is not a zero-sum competition among heroes, but a strong alliance for mutual benefit and customer convenience. In daily life, it's not hard to find that standalone lunchbox stalls are far less busy than lunchbox clusters. This simple example illustrates the group effect. Another example is China Telecom: Recently, at the 2005 China Telecom Group Work Conference, General Manager Wang Xiaochu proposed that China Telecom should strengthen competition in cooperation with mobile operators. This approach embodies the concept of co-opetition. For example, the interconnection of China Telecom's PHS SMS service with mobile operators' SMS, and "Chinavnet" through friendly cooperation with internet content providers and application service providers, have both won customer favor and preference for "promotions" under precision marketing, while achieving mutual benefit for partner businesses and customer convenience.

Misconception 8: Lack of Market Segmentation for Target Consumers Few companies' products target all people; basically, they have their own specific consumer groups. However, we find that many companies' promotional activities try to capture all consumers, which is a misconception. To paraphrase a philosophical saying: "More is less, less is more." Corporate financial and human resources are limited, and natural supply and allocation are also limited. Trying to cover everything often leads to neglecting one thing while attending to another, failing to achieve the expected results. Recently, while visiting the market, I was pleased to find that many companies have started personalized promotions for different consumer groups. For example, in the beer industry, many companies have started setting up wedding banquet promotions for newlyweds; in the liquor industry, different promotional plans and gifts are used for graduating students, employee promotions, etc.; some companies implement different promotional activities for different holiday consumer groups, such as skiing on Christmas, giving travel tickets on National Day, family package discounts on Mid-Autumn Festival, and buying products on Valentine's Day to give roses; some companies adopt different promotional methods based on different venues, such as in the beer industry, if consumers dine in restaurants, they give novel small gifts to enhance the table atmosphere; in nightclubs and bars, they do buy-X-get-Y activities to encourage more drinking; at small shops, they can scratch cards for prizes, giving consumers real benefits... Consumers have different consumption habits and behaviors, so our promotions need to be segmented according to actual conditions to achieve better results.

Misconception 9: Solely Pursuing Sales Volume Currently, most companies think that promotion is to increase sales. Many have a phenomenon where every promotion application form has a target sales volume attached, making sales volume the only criterion for measuring promotional effectiveness. In fact, promotion is not just to achieve predetermined sales targets, but to stimulate purchases by exploring customer needs. Promotional goals should not be limited to sales targets, but should include broader communication and dissemination goals: information reach rate, new product awareness, improvement indices for popularity and reputation, brand image strengthening, and old customer return rate and loyalty. These should all be our promotional goals, not just short-term sales increases and one-time completion of sales targets. Many operators also think that the purpose of promotion is to expand market share, which seems correct on the surface. But such expansion should also have conditions and premises; we must not blindly expand market share through promotional means without considering market reality.

Misconception 10: Solely Pursuing Form Promotion is not just about letting customers perceive the marketing form they like, but about planning actual content that promotes consumption. Recently, PHS (Personal Handy-phone System) has been selling very well in Hefei market. I think this is not only because it's cheap and uses a marketing form that customers like, but more importantly, its practical functions can meet the application needs of target customers (solving the previous signal problem). At the same time, its green, environmentally friendly, and convenient features inject more actual content that promotes consumption into the service. This shows that if a product cannot promptly plan and explore its actual content that promotes customer consumption, no matter how good the promotional form is, it won't win customers' favor or achieve ideal marketing results.

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