chương 17: Premiums and Other Promotions pps

 Are articles of merchandise or services offered as a gift to induce action by consumers, retailers, and the sales force  Represent versatile promotional tools that generate trial purc

Premiums and Other Promotions

CHAPTER 17

1 Understand the role of premiums, the types of

premiums, and the developments in premium

practice

2 Recognize the role of price-off promotions and bonus

packages

3 Be aware of the role of rebates and refund offers

4 Know the differences among sweepstakes, contests,

and games, and the reasons for using each form of

promotion

Chapter Objectives

After reading this chapter you should be able to:

6 Appreciate retailer-driven promotions.

7 Evaluate the potential effectiveness of sales

promotion ideas, and appraise the effectiveness of

completed promotional programs

Chapter Objectives (cont’d)

After reading this chapter you should be able to:

 Are articles of merchandise or services offered as a gift to induce action by consumers, retailers, and the sales force

 Represent versatile promotional tools that generate trial purchases, encourage repeat purchasing, and reinforce brand images

 Are provide to increase consumer brand loyalty and

to motivate new purchases

Major Consumer-Oriented Promotions

Table 17.1

Free-with-Purchase

Premiums

• Delayed reward to consumers primarily

designed to generate trial purchases

• Perceived value of a premium item, or gift, depends on the value of brand offering gift

Mail-In Offers • Delayed reward to consumers primarily

designed to generate trial purchases.

• Few consumers exposed to free mail-in offers take advantage of the opportunities

In-, On-, and

Illustration

of a Mail-in

Premium

Figure 17.1

“Buy X, Get 1

Free” Offers

• Represents an immediate reward to

consumers, and, for manufacturers

• Rewards a brand’s loyal customers or encourages trial from purchasers of competitive brands who are willing

to switch in order to save money

Self Liquidating • Consumer mails in proof-of-purchase with

sufficient money to receive the premium item

• Premium should be appealing and represent

a value

Phone Cards • Repeat-purchasing objective

• Delayed reward

What Makes a Good Premium Offer?

• Price-Offs’ Marketing Objectives:

 To reward present brand users

 To get consumers to purchase larger quantities than normal

 To establish repeat purchases

 To ensure promotion dollars reach consumers

 To obtain off-shelf display space

 To provide the sales force with incentives

 Limit to three price-off labels per year per brand size

 Required hiatus period (at least 30 days) between price-off promotions

 No more than 50% of annual volume from promotion

 Manufacturer must provide display materials

 Dealer required to show regular and promotion prices

Bonus Packs

• Bonus Packs

 Are extra quantities of a product that are offered for the same price

 Offer an alternative to price-off deals

 Will be purchased by regular customers who would have purchased the brand anyway

 Load current users; thereby removing them from the market

 Provide an instant reward

 Create excitement, stimulate brand interest, and

reinforce brand loyalty

 Must avoid snafus that threaten consumer confidence

in the security of game operations and the integrity of game outcomes

Rebates and Refunds

• Rebate (also Refund)

 Refers to the practice in which manufacturers give

cash discounts or reimbursements to consumers who submit proofs of purchase

 Offers consumers delayed rather than immediate

value, since the consumer must wait to receive the reimbursement

 That goes unredeemed is a “phantom rebate”

 Can attract switchers from competitive brands who avail themselves of attractive discount offers

Illustration of a

Rebate Offer

Figure 17.2

Rebate Fraud

Sources of Rebate Fraud

 A promotion in which winners are determined purely

on the basis of chance—proofs of purchase cannot

be required as a condition for entry

• Sweepstakes as a Promotional Tool

 Are relatively inexpensive and simple to execute

 Reinforce brand positioning and image

 Attract attention to advertisements

 Promote increase brand distribution at retail

 Foster sales force enthusiasm

Illustration of a

Sweepstakes

Offer

Figure 17.3

• Contests

 A promotion in which participants must act according

to the rules of the contest and may or may not be

required to submit proofs-of-purchase

• Online Sweeps and Contests

 Are growing in importance

 Direct consumers to register online to participate in sweeps or contests

 Create brand awareness, build consumer interaction with a brand, and enable expansion of a brand’s opt-

Illustration of a

Promotional

Contest

Figure 17.5

Overlay and Tie-In Promotions

• Overlay (Combination) Program

 Is the simultaneous use of multiple promotion tools to promote a brand or to promote brands cooperatively

from different firms

 Increases the likelihood that consumers will attend a promotional message that cuts through clutter

Overlay and Tie-In Promotions (cont’d)

• Tie-in (Group) Promotion

 Is the simultaneous promotion of multiple brands in a

promotional effort

 Is cost-effective, but lead time is lengthened

 Should reinforce partners’ images of each other

Illustration of an Intracompany Tie-In

Figure 17.6

Illustration of an

Intercompany

Tie-In Promotion

Figure 17.7

Implementation Problems for Tie-in

Promotions

• To reduce potential problems:

 The profiles of each partner’s customer’s must be

similar with regard to demographics

 The partner’s images must reinforce each other

 The partners must be willing to cooperate rather than imposing their own interests

Retailer Promotions

Increase store traffic

Offer price discounts and deals

Build customer loyalty

Purposes of Retailer Promotions

Retailer Promotions

Retail

Coupons

shopper Programs

Frequent-Special Price Deals

Samples and premiums

Types of Retailer Promotions

Evaluating Sales Promotion Ideas

• Procedure for Evaluating Promotion Ideas

1. Identify specific objectives for the promotion

2. Achieve agreement on objectives

3. Evaluate (rate) the idea:

Execution Ease

Evaluation of Three Completed Promotional Programs

Table 17.2

program on the ith evaluation factor (i.e., the

efficiency factor, the executional ease factor, etc.)