Sales Promotion Individual Assignment

SALES PROMOTION: FREE UBER WEEK IN INDIA

DescriptionUber came up with its latest innovative consumer targeted sales promotion in various cities of operations across India which involved selecting their recently launched wallet as their payment method which would allow the customers to get 5 free rides in a week, till Rs 300 each for both new and existing users. For availing this discount no promo code was required but the customer was required to ride with UBER with Paytm wallet as their payment option.

AnalysisIn a way this promotion encouraged cross ruff sampling and provided monetary incentive to the customer.

Paytm wallet is at an introductory stage in India and UBER itself is in growth stage in India, launched in August, 2014 in Bangalore and now operates in major cities across India. It only faces heavy competition from the existing taxi and auto industry, where customers have been classically conditioned as the traditional modes of transport but also from upcoming competitors like OLA, Meru cabs etc. So for Paytm in collaboration with UBER has to offer heavy promotions to induce trials and promote its brand franchise as it is at introduction stage of PLC. The potential effects of this particular sales promotion would involve increased market share in the taxi market, involve target customers switching from traditional black and white taxis to UBER cabs, also encouraging repeat usage and accelerated usage during the duration of the promotion. However since the rates per km have been left unaltered, this would ensure that the customer perception about the brand image of Uber remains unchanged. By this promotion UBER wants to condition the customers to use Paytm as means of payment instead of cash.

Overall, this promoyion involved downloading of App before getting the facility to get free rides in UBER, so overall this promotion involved a high price cut which can be availed with high effort, thus it leads to medium brand detoriation. So getting customers to switch from traditional payment mode to wallet medium would involve a shaping procedure to derive new behavior, hence heavy promotions initially to induce trials.

As per the framework of Behavioural learning theory, the current sales promotion of UBER falls under the category of Primary reinforcers with delayed reinforcement which would promote the product though it lowers the probability of usage of the offer. So according to approximation scheduling, for existing UBER users, higher probability of switching to wallet method, but for new UBER users, it could lead to too much change from current existing behavior affecting the effectiveness of current FREE UBER WEEK sales promotion offer.

So overall this unique sales promotion offer would increase sampling and encourage word of mouth publicity for UBER and Paytm.