Stuff About Sales Promotion

There are many ways of for marketers to try sway consumers to their product, one of which is through sales promotion. On this box of Capn' Crunch is an advertisement for a self-liquidating promotion for a “free” t-shirt with a picture of Cap’n Crunch on the front of it. The promotion requires 4 proofs of purchase as well as $3.49 to cover shipping and handling. This promotion is meant to encourage both first time buyers and previous buyers to purchase the product multiple times.

It is generally accepted by marketers that sales promotions are usually not an effective way of building brand equity. This is due to the fact that money is being spent to on these promotions and not building the brand equity through advertisement. Promotions only encourage customers to buy the product primarily due to price, whereas advertising improves consumer’s perception of the brand and encourages them to pay for the product because of the brand, sometimes even at a premium.

Though this opinion of sales promotions may be true in most cases, there are situations that sales promotions do build brand equity. This type of sales promotion is called a consumer franchise building promotion. Cap'n Crunch uses this promotion to appeal to the consumer and hopefully, by providing them with extra benefit, encouraging them to prefer the brand and continue to purchase it at full price when there are no sales promotions.

This is a pretty acceptable practice with within cereal brands. In an industry where there are so many brands to choose from, promotions help the consumer bypass choice anxiety by offering extra benefits. You might notice that the promotion is also for “adult sizes only” which targets the parent or adult that has the purchasing power. The other factor that makes this sales promotion a franchise building promotion is how the shirt can be considered an advertising tool. If the shirt gets worn by an adult this can increase the exposure of the brand amongst other adults, the individuals that actually purchase the product. This builds brand equity and is very cost effective because the company only has to make the shirt, which will be fairly inexpensive, and the customer will pay for the shipping and handling of the item.

Overall I think that this is an effective sales promotion, especially within this particular market. Cap’n Crunch is increasing the consumer’s benefit received by providing the self-liquidating promotional item, while simultaneously building the brand’s equity by using the item to advertise. Cap’n Crunch is also building the brand’s equity be encouraging frequent purchase through the use of proof-of-purchase for redeeming the promotional item.