Managing Incentives

Cerebellum Press
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41
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Incentives are inducements that aim to enhance the value of an offering by increasing its benefits or, more frequently, by reducing its costs. The ultimate goal of incentives is to incite action on the part of the company’s target customers, collaborators, and employees. Because they typically are used to increase sales volume, incentives are often referred to as sales promotions. The key aspects of designing and managing incentives are the focus of this note. The discussion of managing incentives is complemented by an in-depth overview of sampling as a promotional tool and an outline of the game-theory view of sales promotions. This note is an excerpt (Chapter 13) from Strategic Marketing Management: Theory and Practice by Alexander Chernev (Cerebellum Press, 2019).

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