Giving discounts or including a free gift with a purchase is a sure way to increase sales -- but only if the deal is worth what you say it is. "Nothing turns off the consumer faster than saying you are giving them a $9.95 value, when they know they can go down to K mart and buy the same thing for $5," says Clifford Medney, director of sales promotion for A&W Brands Inc.
But you don't have to spend full price to give someone a true bargain. A&W, for example, purchases thousands of teddy bears in the Far East, knowing similar bears retail for $25. By going directly to the manufacturer, A&W can pass its discount on to customers. A&W is happy because the $9.95 that consumers pay for the A&W Great Root Bear covers expenses. Consumers are happy because they save more than 60%.