chương 17: Premiums and Other Promotions pps

© 2010 South-Western, a part of Cengage Learning All rights reserved. PowerPoint Presentation by Charlie Cook The University of West Alabama Eighth Edition 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. 5. Understand the role of continuity promotions. Chapter Objectives After reading this chapter you should be able to: © 2010 South-Western, a part of Cengage Learning. All rights reserved. 17–2 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: © 2010 South-Western, a part of Cengage Learning. All rights reserved. 17–3 © 2010 South-Western, a part of Cengage Learning. All rights reserved. 17–4 Premiums Premiums • Premiums Premiums  Are articles of merchandise or services offered as a Are articles of merchandise or services offered as a gift to induce action by consumers, retailers, and the gift to induce action by consumers, retailers, and the sales force sales force  Represent versatile promotional tools that generate Represent versatile promotional tools that generate trial purchases, encourage repeat purchasing, and trial purchases, encourage repeat purchasing, and reinforce brand images reinforce brand images  Are provide to increase consumer brand loyalty and Are provide to increase consumer brand loyalty and to motivate new purchases to motivate new purchases © 2010 South-Western, a part of Cengage Learning. All rights reserved. 17–5 Major Consumer-Oriented Promotions Table 17.1 © 2010 South-Western, a part of Cengage Learning. All rights reserved. 17–6 Premiums Premiums Free-with- Free-with- Purchase Purchase Premiums Premiums • Delayed reward to consumers primarily Delayed reward to consumers primarily designed to generate trial purchases designed to generate trial purchases • Perceived value of a premium item, or gift, Perceived value of a premium item, or gift, depends on the value of brand offering gift depends on the value of brand offering gift Mail-In Offers Mail-In Offers • Delayed reward to consumers primarily Delayed reward to consumers primarily designed to generate trial purchases. designed to generate trial purchases. • Few consumers exposed to free mail-in offers Few consumers exposed to free mail-in offers take advantage of the opportunities take advantage of the opportunities In-, On-, and In-, On-, and Near-Pack Near-Pack Premiums Premiums • Offer a free item of immediate value inside or Offer a free item of immediate value inside or attached attached • Provide the retail trade with premium item that Provide the retail trade with premium item that retailers then give to consumers retailers then give to consumers • Are less expensive due to no additional Are less expensive due to no additional packaging packaging © 2010 South-Western, a part of Cengage Learning. All rights reserved. 17–7 Illustration of a Mail-in Premium Figure 17.1 © 2010 South-Western, a part of Cengage Learning. All rights reserved. 17–8 Premiums Premiums “ “ Buy X, Get 1 Buy X, Get 1 Free” Offers Free” Offers • Represents an immediate reward to Represents an immediate reward to consumers, and, for manufacturers consumers, and, for manufacturers • Rewards a brand’s loyal customers or Rewards a brand’s loyal customers or encourages trial from purchasers of encourages trial from purchasers of competitive brands who are willing competitive brands who are willing to switch in order to save money to switch in order to save money Self Liquidating Self Liquidating • Consumer mails in proof-of-purchase with Consumer mails in proof-of-purchase with sufficient money to receive the premium item sufficient money to receive the premium item • Premium should be appealing and represent Premium should be appealing and represent a value a value Phone Cards Phone Cards • Repeat-purchasing objective Repeat-purchasing objective • Delayed reward Delayed reward • Preset amount of calling time Preset amount of calling time © 2010 South-Western, a part of Cengage Learning. All rights reserved. 17–9 What Makes a Good Premium Offer? What Makes a Good Premium Offer? • Attractive Premiums Attractive Premiums  The choice of premium object and delivery method The choice of premium object and delivery method based on an explicit detailing of what is to be based on an explicit detailing of what is to be accomplished accomplished  Premium items must be compatible with the brand’s Premium items must be compatible with the brand’s image and appropriate for the target market image and appropriate for the target market © 2010 South-Western, a part of Cengage Learning. All rights reserved. 17–10 Price-Offs Price-Offs • Price-Offs’ Marketing Objectives: Price-Offs’ Marketing Objectives:  To reward present brand users To reward present brand users  To get consumers to purchase larger quantities than To get consumers to purchase larger quantities than normal normal  To establish repeat purchases To establish repeat purchases  To ensure promotion dollars reach consumers To ensure promotion dollars reach consumers  To obtain off-shelf display space To obtain off-shelf display space  To provide the sales force with incentives To provide the sales force with incentives [...]... Learning All rights reserved 17–23 Overlay and Tie-In Promotions (cont’d) • Tie-in (Group) Promotion  Is the simultaneous promotion of multiple brands in a single intracompany or intercompany (joint) promotional effort  Branded pizza and branded soft drink combination offers  Is cost-effective, but lead time is lengthened  Should reinforce partners’ images of each other © 2010 South-Western, a part of... sweeps or contests  Create brand awareness, build consumer interaction with a brand, and enable expansion of a brand’s opt© 2010 South-Western, a part of in e-mail database Cengage Learning All rights reserved 17–20 Figure 17.5 Illustration of a Promotional Contest © 2010 South-Western, a part of Cengage Learning All rights reserved 17–21 Continuity Promotions • Continuity Promotions  Reward consumers’... have purchased the brand anyway  Load current users; thereby removing them from the 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 reinforce brand loyalty  Must avoid snafus that threaten consumer confidence in the security of game operations and the integrity of... Promotions Increase store traffic Offer price discounts and deals © 2010 South-Western, a part of Cengage Learning All rights reserved Build customer loyalty 17–28 Retailer Promotions Types of Retailer Promotions Retail Coupons Frequentshopper Programs © 2010 South-Western, a part of Cengage Learning All rights reserved Special Price Deals Samples and premiums 17–29 Evaluating Sales Promotion Ideas • Procedure... cement a long-term relationship with the consumer © 2010 South-Western, a part of Cengage Learning All rights reserved 17–22 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  Printed coupon with an mail-in entry contest form  Increases the likelihood that consumers... 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 © 2010 South-Western, a part of  Can reach special groups Cengage Learning All rights... 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 © 2010 South-Western, a part of Cengage Learning All rights reserved 17–27 Retailer Promotions Purposes of Retailer Promotions. .. labels can only used on distributed brands with established retail prices  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 a show © 2010 South-Western,to part of regular and promotion prices Cengage Learning... 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 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... reserved 17–13 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 . Edition 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. brand awareness, build consumer interaction Create brand awareness, build consumer interaction with a brand, and enable expansion of a brand’s opt- with a brand, and enable expansion of a brand’s. encourage repeat purchasing, and trial purchases, encourage repeat purchasing, and reinforce brand images reinforce brand images  Are provide to increase consumer brand loyalty and Are provide to