Apple offers gift cards in exchange of the old iPhone. RadioShack, Amazon & Wal-Mart offers such trade-in programs for different products. Apple’s purpose of offering this program is to acquire new customers and to retain the existing customer base by providing them an opportunity to upgrade their iPhones from older model to the newer iPhone 6. Similar program is offered for Apple’s other products like Mac and iPad also.
Generally sales promotion involves offering coupons, discounts and on sale promotional pricing. Trade-in is one of the underutilized forms of sale promotion. In Trade-in the customers are made to feel that they are getting more value for their current product at the same time they can opt for an upgraded model. The marketer leverage this mind-set of customers by making the product price appear lesser and also by positioning their campaigns on recycling and supporting environmental causes which will eventually increase the Brand equity. The success factor of this Trade-in technique is that it enables the existing customer base as repeat customers and thus the customer retention also increases.
Product life cycle plays a crucial role in deciding the Trade-in programs. Even for product with extended life cycle like automobile the trade-in are widely used.
E-commerce retailers like Flipkart, Snapdeal & Amazon use this trade-in promotions extensively to increase their customer base.