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February 28, 2006

Building Brand Loyalty Through Promotions

Survey findings reported in the March issue of the American Journal of Preventive Medicine indicate that cigarette manufacturers are using promotional offers successfully, and that 35% of consumers take advantage of discounts every time they see them.

The authors of the survey say their results "strongly suggest that the tobacco industry is successfully reaching intended price-sensitive groups with promotional offers" because this particular market segment tends to smoke only those brands associated with increased promotional-offer use. In fact, nearly three-quarters ($8.9 billion) of tobacco-industry marketing costs in 2002 was on promotion.

"To cigarette manufacturers, promoting brand loyalty in younger casual smokers and encouraging them to become fully addicted so they will buy cigarettes for many years is likely worth the cost of discounting cigarettes,” the researchers conclude.

Because it's a health-related article, the promotions weren't defined other than cash discounts. However, it makes sense that price-sensitive tobacco customers would also be attracted to free products with purchase; in this case, something like a lighter and cigarette pack holder or cigarette cutter.

It all comes back to exhaustive market research and knowing – exactly – who your customer is and what that customer wants.

Posted by farfromboring at February 28, 2006 10:21 AM