MKT 3301 UH Buy One Get One Free Questions
ANSWER
One unique sales promotion I’m aware of is Starbucks’ Rewards Program, which primarily targets consumers. Starbucks, a well-known coffeehouse chain, has developed an extremely successful promotion through its loyalty program that aims to drive repeat business and increase customer spending.
Program Details: Starbucks Rewards is a customer loyalty program that rewards individuals for making purchases at Starbucks stores. Here’s how it works:
- Earning Stars: Customers earn stars for every purchase they make. The number of stars earned is typically based on the amount spent. For example, one star per dollar spent.
- Tiered Rewards: As customers accumulate stars, they progress through different tiers of the rewards program. These tiers offer increasingly attractive benefits, such as free in-store refills, birthday rewards, and personalized offers.
- Mobile App Integration: Starbucks has a mobile app that not only allows customers to pay for their orders but also tracks their loyalty program status, offers personalized recommendations, and sends special promotions and offers directly to their phones.
- Free Drinks and Food: Once customers reach a certain number of stars, they can redeem them for free drinks, food items, or merchandise.
Target Audience: This sales promotion is primarily directed at consumers—coffee enthusiasts who frequent Starbucks stores. It encourages them to visit Starbucks more often and spend more money on their favorite coffee beverages and snacks.
Effects: Starbucks Rewards has had several notable effects:
- Increased Customer Frequency: The program encourages customers to visit Starbucks regularly to earn stars and maintain their status within the program.
- Higher Average Transaction Value: Customers often spend more to earn stars faster, leading to increased per-visit spending.
- Customer Retention: Once customers are part of the Starbucks Rewards program, they are more likely to stick with Starbucks rather than switching to competitors.
- Data Collection and Personalization: Starbucks collects valuable customer data through the program, enabling them to send targeted offers and recommendations, further increasing customer engagement and spending.
Why It’s Successful: Starbucks Rewards is successful for several reasons:
- Incentivizes Loyalty: By rewarding customers for their repeat business, Starbucks creates a strong incentive for customers to choose Starbucks over competitors.
- Personalization: The program offers personalized rewards and recommendations based on a customer’s purchase history, making it more relevant and engaging.
- Mobile Integration: The mobile app makes it convenient for customers to participate in the program, track their rewards, and receive promotions, increasing program adoption.
- Psychological Reward: The feeling of earning stars and working toward free items creates a sense of achievement and satisfaction, further motivating customers to continue their patronage.
In conclusion, Starbucks Rewards is a highly successful sales promotion directed at consumers. It effectively drives customer loyalty, increases spending, and collects valuable data for personalized marketing efforts. Its success lies in its ability to create a win-win scenario for both Starbucks and its loyal customers.
Question Description
I’m working on a marketing multi-part question and need a sample draft to help me learn.
Sales promotion is one of the 4 promotion mix variables that organizations can use to communicate, and control consumers’ behavior. They can be directed at consumers, the trade (retailers, wholesalers, agents, brokers), and a firm’s salesforce. The Kohl department store has a very successful promotion in the form of Kohl’s cash. For every $50.00 consumers spend, they generate $10.00 in Kohl’s cash which normally can be used a week later. A consumer who spends $100.00 before sales taxes will receive $20.00 in Kohl’s cash. Initially, Kohl drives the consumer in the store with a high-value coupon worth between 15-30%. Then drives most back into the store a week later to spend the Kohl’s cash. Naturally, most consumers spend more money than what they have in Kohl’s cash. Please describe a unique sales promotion (consumer, trade or salesforce) that you are aware of. Indicate who it is directed at and its effects. Why do you think that it is successful?
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