7 Questions
What is the purpose of developing incentives and disincentives in marketing?
To increase benefits or decrease costs for customers
Which tool is unique in its use of both monetary and nonmonetary incentives?
Price tool
In terms of desired behavior, the first four price-related tactics focus on:
Increasing benefits for customers
What are examples of nonmonetary incentives mentioned in the text?
Recognition, appreciation, and reward
Which is NOT a form of monetary incentive mentioned in the text?
Recognition
Why is it important for organizations to be involved in setting prices before developing incentives?
To align the incentives with the customer's willingness to pay
What is the goal of providing incentives according to the text?
To increase benefits or decrease costs for customers
Study Notes
Increasing Nonmonetary Benefits
- Nonmonetary benefits can encourage changes in behavior without involving cash or discounted goods and services.
- These benefits provide psychological and personal value, such as increased self-respect, public respect, and recognition.
- Examples of nonmonetary benefits include:
- Pledges or commitments that acknowledge the adoption of a desired behavior
- Public recognition, such as an email or an annual awards program
- Appreciation, such as a thank-you note or a certificate
Decreasing Monetary Costs
- Decreasing monetary costs involves methods familiar to consumers, such as:
- Discount coupons
- Gift cards
- Trial incentives, such as free rides or samples
- Cash discounts
- Seasonal discounts
- Promotional pricing, such as price based on geographic locations
Decreasing Nonmonetary Costs
- Decreasing nonmonetary costs involves reducing time and physical or psychological costs, such as:
- Embedding a new behavior into existing habits
- Anchoring a new behavior to an established habit
- Reducing usage time or effort
- Encouraging physical activity, such as taking the stairs instead of the elevator
Determining Incentives and Disincentives
- The objective is to develop and provide incentives that increase benefits or decrease costs.
- Monetary and nonmonetary incentives can be used to encourage the desired behavior.
- Price tools can be used to increase benefits and decrease costs, including:
- Monetary rewards and incentives, such as rebates, gift cards, and cash incentives
- Nonmonetary incentives, such as recognition, appreciation, and rewards
Learn about strategies to encourage behavior change without using cash incentives or discounts, but rather through psychological and personal benefits like pledges, recognition, and appreciation. Explore how social marketing leverages nonmonetary incentives to promote desired behaviors.
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