Do giveaways work? GfK data expert reveals findings

By Dr Morten Boyer, GfK Marketing Services, Australia

SYDNEY: GfK research reveals just how effective, or not, giveaway promotions are and whether they can influence a consumer to brand switch. The results may surprise you.

Few people would turn down a free gift with their retail purchase, if offered one. But when it comes to giveaways influencing the actual decisions made by consumers, the effect is not as predictable.

Recent data from GfK Australia’s TV and PC ConsumerScope trackers shows, that although many people are influenced by giveaway promotions, around 40 per cent would have made the same purchase decision without the incentive. This does not suggest that such promotions are failing, but it is clear that they are not all equally as persuasive.

The consumer response to giveaways is category-sensitive and also depends on the free product.
Some giveaways tend to steer a consumer towards alternative models within a selected brand’s range, whereas others are powerful enough to instigate a brand switch.

At least one trend, however, appears to be consistent across product categories: as the price of the ‘paid for’ item increases, giveaway promotions become more effective at switching consumers to a different model within a preferred brand’s range, and less effective at switching consumers to a completely different brand.

Although a select few giveaway promotions are able to contradict this trend, the overall implication is that, compared with lower end consumers, big spending consumers are less likely to switch brands because of a giveaway.

These high spending consumers are more inclined to respond to giveaway promotions by being up-sold to another model within their favourite brand’s range.

Retailers and manufacturers have already begun unveiling their latest promotions designed to encourage cautious consumers to celebrate Christmas as usual and, in uncertain times, it will be more critical than ever to select and target such promotions accurately.

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