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Know the differences among sweepstakes, contests, and games, and the reasons for using each form of promotion.. Evaluate the potential effectiveness of sales promotion ideas, and apprais

Premiums and Other Promotions

Premiums and Other Promotions

CHAPTER 17

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

5 Understand the role of continuity promotions

premiums, and the developments in premium

practice

packages

and games, and the reasons for using each form of

6 Appreciate retailer-driven promotions.

7 Evaluate the potential effectiveness of sales

promotion ideas, and appraise the effectiveness of

completed promotional programs

promotion ideas, and appraise the effectiveness of

completed promotional programs

Chapter Objectives (cont’d)

After reading this chapter you should be able to:

Chapter Objectives (cont’d)

After reading this chapter you should be able to:

• Premiums

gift to induce action by consumers, retailers, and the sales force

trial purchases, encourage repeat purchasing, and

reinforce brand images

to motivate new purchases

Major Consumer-Oriented Promotions

Table 17.1

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

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

What Makes a Good Premium Offer?

• Attractive Premiums

based on an explicit detailing of what is to be

accomplished

image and appropriate for the target market

• Price-Offs’ Marketing Objectives:

normal

Price-Offs (cont’d)

• Federal Trade Commission (FTC)

Price-Off Regulations

with established retail prices

price-off promotions

Bonus Packs

• Bonus Packs

the same price

have purchased the brand anyway

market

• Promotional Games

reinforce brand loyalty

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

Rebates and Refunds

• Rebate (also Refund)

cash discounts or reimbursements to consumers who submit proofs of purchase

value, since the consumer must wait to receive the

reimbursement

avail themselves of attractive discount offers

Illustration of a

Rebate Offer

Figure 17.2

Rebate Fraud

Manufacturers Retailers Consumers

Sources of Rebate Fraud

• Sweepstakes (Sweeps)

on the basis of chance—proofs of purchase cannot

be required as a condition for entry

• Sweepstakes as a Promotional Tool

Illustration of a

Sweepstakes

Offer

Figure 17.3

• Contests

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

required to submit proofs-of-purchase

• Online Sweeps and Contests

sweeps or contests

with a brand, and enable expansion of a brand’s

opt-in e-mail database

Illustration of a

Promotional

Contest

Figure 17.5

Overlay and Tie-In Promotions

• Overlay (Combination) Program

from different firms

 Printed coupon with an mail-in entry contest form

promotional message that cuts through clutter

Overlay and Tie-In Promotions (cont’d)

• Tie-in (Group) Promotion

single intracompany or intercompany (joint)

promotional effort

 Branded pizza and branded soft drink combination offers

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:

similar with regard to demographics

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

 Is it a good one? Does it meet objectives?

 Does it appeal to its target market?

 Is it unique and different from the competition?

 Is the idea presented clearly to its market?

 Is it cost-effective?

Execution Ease

Evaluation of Three Completed Promotional Programs

Table 17.2

Program j = A just-completed promotional program

Eij = Evaluation of the jth promotional program on the ith evaluation factor (i.e., the

efficiency factor, the executional ease factor, etc.)

Wi = Weight, or relative importance, of the