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- Premiums and
CHAPTER 17
Other Promotions
© 2010 South-Western, a part of Cengage Learning PowerPoint Presentation by Charlie Cook
All rights reserved. The University of West Alabama
Eighth Edition
- Chapter Objectives
After reading this chapter you should be able to:
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.
5. Understand the role of continuity promotions.
© 2010 South-Western, a part of Cengage Learning. All rights reserved. 17–2
- Chapter Objectives (cont’d)
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.
© 2010 South-Western, a part of Cengage Learning. All rights reserved. 17–3
- Premiums
• Premiums
Are articles of merchandise or services offered as a
Are
gift to induce action by consumers, retailers, and the
sales force
sales
Represent versatile promotional tools that generate
Represent
trial purchases, encourage repeat purchasing, and
reinforce brand images
reinforce
Are provide to increase consumer brand loyalty and
Are
to motivate new purchases
to
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved. 17–4
- Major Consumer-Oriented Promotions
Table 17.1
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved. 17–5
- Premiums
• Delayed reward to consumers primarily
Free-with- Delayed
Purchase designed to generate trial purchases
Purchase designed
Premiums
Premiums • Perceived value of a premium item, or gift,
Perceived
depends on the value of brand offering gift
depends
• Delayed reward to consumers primarily
Mail-In Offers Delayed
designed to generate trial purchases.
designed
• Few consumers exposed to free mail-in offers
Few
take advantage of the opportunities
take
• Offer a free item of immediate value inside or
In-, On-, and
In-, Offer
Near-Pack attached
Premiums
Premiums • Provide the retail trade with premium item that
Provide
retailers then give to consumers
retailers
• Are less expensive due to no additional
Are
© 2010 South-Western, a part of
packaging
packaging
Cengage Learning. All rights
reserved. 17–6
- Figure 17.1
Illustration
of a Mail-in
Premium
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved. 17–7
- Premiums
• Represents an immediate reward to
“Buy X, Get 1
Buy Represents
Free” Offers consumers, and, for manufacturers
Free” consumers,
• Rewards a brand’s loyal customers or
Rewards
encourages trial from purchasers of
competitive brands who are willing
to switch in order to save money
to
• Consumer mails in proof-of-purchase with
Self Liquidating Consumer
sufficient money to receive the premium item
sufficient
• Premium should be appealing and represent
Premium
a value
value
• Repeat-purchasing objective
Phone Cards
• Delayed reward
• a part amount of calling time
© 2010 South-Western, Preset of
Cengage Learning. All rights
reserved. 17–8
- What Makes a Good Premium Offer?
What
• Attractive Premiums
The choice of premium object and delivery method
The
based on an explicit detailing of what is to be
accomplished
accomplished
Premium items must be compatible with the brand’s
Premium
image and appropriate for the target market
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved. 17–9
- Price-Offs
• Price-Offs’ Marketing Objectives:
To reward present brand users
To get consumers to purchase larger quantities than
To
normal
normal
To establish repeat purchases
To ensure promotion dollars reach consumers
To obtain off-shelf display space
To provide the sales force with incentives
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved. 17–10
- Price-Offs (cont’d)
• Federal Trade Commission (FTC)
Federal
Price-Off Regulations
Price-Off
Price-off labels can only used on distributed brands
Price-off
with established retail prices
with
Limit to three price-off labels per year per brand size
Required hiatus period (at least 30 days) between
Required
price-off promotions
price-off
No more than 50% of annual volume from promotion
Manufacturer must provide display materials
© 2 Dealer required topart of regular and promotion prices
010 South-Western, a show
Cengage Learning. All rights
reserved. 17–11
- Bonus Packs
• Bonus Packs
Are extra quantities of a product that are offered for
Are
the same price
the
Offer an alternative to price-off deals
Will be purchased by regular customers who would
Will
have purchased the brand anyway
have
Load current users; thereby removing them from the
Load
market
market
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved. 17–12
- Games
• Promotional Games
Provide an instant reward
Create excitement, stimulate brand interest, and
Create
reinforce brand loyalty
reinforce
Must avoid snafus that threaten consumer confidence
Must
in the security of game operations and the integrity of
game outcomes
game
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved. 17–13
- Rebates and Refunds
• Rebate (also Refund)
Refers to the practice in which manufacturers give
Refers
cash discounts or reimbursements to consumers who
submit proofs of purchase
submit
Offers consumers delayed rather than immediate
Offers
value, since the consumer must wait to receive the
reimbursement
reimbursement
That goes unredeemed is a “phantom rebate”
Can attract switchers from competitive brands who
Can
avail themselves of attractive discount offers
avail
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved. 17–14
- Figure 17.2
Illustration of a
Rebate Offer
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved. 17–15
- Rebate Fraud
Sources of
Rebate Fraud
Retailers
Manufacturers Consumers
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved. 17–16
- Sweepstakes
• Sweepstakes (Sweeps)
A promotion in which winners are determined purely
promotion
on the basis of chance—proofs of purchase cannot
on proofs
be required as a condition for entry
be
• 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
© 2 South-Western, a part of
010
Can reach special groups
Cengage Learning. All rights
reserved. 17–17
- Figure 17.3
Illustration of a
Sweepstakes
Offer
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved. 17–18
- Figure 17.4
Illustration
of another
Sweepstakes
Offer
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved. 17–19
- Contests
• Contests
A promotion in which participants must act according
promotion
to the rules of the contest and may or may not be
required to submit proofs-of-purchase
required
• Online Sweeps and Contests
Are growing in importance
Are
Direct consumers to register online to participate in
Direct
sweeps or contests
Create brand awareness, build consumer interaction
Create
with a brand, and enable expansion of a brand’s opt-
with
© 2010 South-Western, a part of
in e-mail database
Cengage Learning. All rights
reserved. 17–20
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