Contest - Meaning, Importance, Steps & Example

Published in Marketing and Strategy Terms by MBA Skool Team

What is Contest?

Contest is a common promotional tool used by the company to attract new customers or retain interest of old customers to their products or services and to make a buzz in the marketplace. Online contest promotion is used to attract people using Facebook, Twitter, email or feed subscribers. Cost involved in a contest depends on the type of prize being given to the participants. In a research-based contest, whose primary aim is to gather consumer information, more time is spent in developing forms with questions.

Elements of a Contest


Three major elements of contests are:

1. Contests should be free – They should play with the emotions of the people like joy, fear, competitiveness then only it will become successful. Select a prize that is aligned with the company’s brand and according to the taste of customers.

2. Contests should be short lived – People become more active when deadlines are approaching. So, to motivate people and charge them use a countdown clock for them. Conduct it for short period of time to get maximum engagement.

3. Contests should have offer – They should give some offers or benefits or prizes.

Some free spots that will give direct entry to second round will increase demand of the contest. People will become more competitive to grab the opportunity.

Steps for a Marketing Contest

Some steps for creating a contest as a marketing tool are:

1. Set a goal what do you want to achieve.

2. What type of prizes or sweepstakes you want to give to attract more people

3. Select a platform and set rules which abide by the guidelines of the platform

4. Create promotion plans like advertising, blog posts, posters, etc

5. Test the contest before making it live

6. Regular follow up the participants. Send them updates, announcements and special offers

7. Analysis of result is important, analyse what worked well and what didn’t which will help you in future

8. Use the data gathered for research purpose

Importance of Contests in Marketing

Contest give scope for market research. When people take part, the company can collect their basic information like their name, contact information and answers of other research questions. For example, for a contest for car, the company can ask questions on participant’s driving habits and choice of car. When consumers participate in local automobiles retailer, they fill the forms floated by the companies with their information and answers to the questions being asked. Later the company collects the filled forms from the retailer and use it for further analysis or market research. It helps in understanding consumer preferences and promotion of their products.

Advantages & Disadvantages of Contests

Some advantages are:

1. Information gathered from the contests are used for market research

2. They increases customer experience and contribute to word of mouth advertising

3. It engages the customers and helps in increasing the fan base of the company

Some disadvantages are:

1. Customer indifference is a big hurdle in research-based contests. A customer might just fill the form casually without paying much attention to the product being given in the promotion.

2. People rush through many events with the aim of winning prize, so they don’t really remember the products of a particular company that the promoters wanted them to.

Example of Contests

A company providing gift vouchers in the contest for the promotion of their new television launched. It gives a form to the local electronic retailer in which people have to fill their basic information and some questions on their TV habits. It helps the company for further promotion in the future.

Hence, this concludes the definition of Contest along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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