What are premiums in the context of sales promotion?

Premiums in the context of sales promotion refer specifically to extra items that are provided as an incentive to encourage consumers to purchase a promoted product. This strategy is designed to add value to the buying experience, making the offer more attractive. For example, a company might offer a free gift, such as a toy or an accessory, with the purchase of a specific product.

The objective of using premiums is to boost sales and increase customer loyalty by providing an additional benefit that enhances the main product. This tactic not only incentivizes immediate purchases but also helps in brand awareness and satisfaction among customers who perceive greater value in their purchase. By using premiums effectively, businesses can differentiate their products in a competitive market, enhancing both sales and brand perception.