Consumer Promotions

Chapter 10

Consumer Promotions Defined

An incentive or an enticement that encourages a consumer to either select or purchase a product.

Types of Consumer PromotionsTypes of Consumer Promotions

Coupons Premiums Contests and sweepstakes Refunds and rebates Sampling Bonus packs Price-offs

Consumers and Sales Promotions

Targeted consumers are classified three ways: Promotion prone consumers Brand loyal consumers Price sensitive consumers

Take a look at question 8, on page 330. discuss with classmates seated close to you.

In-store distribution Direct sampling Response sampling Cross-ruff sampling Media sampling Professional sampling Selective sampling

F I G U R E 1 0 . 5

Types of Sampling

What’s Happening?

http://www.eggs.ca/ContestsPromos/Default.aspx

http://www.youtube.com/watch?v=5OfMb90v4qg

http://money.cnn.com/2009/02/03/news/companies/dennys_breakfast.fortune/index.htm?postversion=2009020411

http://ca.youtube.com/watch?v=RYgKQ3_hWA4http://ca.youtube.com/watch?v=uYIBAswqMEMhttp://ca.youtube.com/watch?v=CALvpp4nuJg 

Sampling How effective would sampling

be for the goods and services listed on the right?

How would you design a sampling program that would be effective, yet not too costly?

What type of consumers would you target for the sampling?

Fitness center Ice cream Dental service Clothing manufacturer Auto repair service Office supply store

Sampling

Most effective when used to introduce a new product or a new version of a product.

Primary purpose is to encourage trial use by a customer.

Sampling is a very effective IMC tool when used correctly.

The two key drawbacks to sampling programs are: Cost Customers discarding the sample without trying it.

Types of Coupons

Instant redemption Scanner-delivered Cross-ruffing/Co-

branding Response offer E-coupons Bounce-back/return

coupon

A coupon accompanies this informational Gold Bond advertisement

Types of Premiums

Free-in-the-mail In- or on-package Store or manufacturer Self-liquidating

Fast-food chains are well known for their in-store premiums.

Match the premium to the target market. Carefully select the premiums (Avoid fads, try for

exclusivity).

Pick a premium that reinforces the firm’s product and image.

Integrate the premium with other IMC tools (Especially advertising and POP displays).

Don’t use premiums to increase profits.

Source: Based on Don Jagoda, “The Seven Habits of Highly Successful Premiums,”Incentive, (August 1999), Vol. 173, Issue 8, pp. 104-105.

F I G U R E 1 0 . 4

Keys to Successful Premiums

Creating Successful Contests and Sweepstakes Know the legal restrictions. Must overcome clutter. Find the right combination of prizes. Must consider extrinsic and intrinsic value. Look for tie-in opportunities with special

events or other companies. Must be coordinated with POP Displays and

other marketing tools.

Successful Rebate/Refund Programs

Visibility. Encourages customers to act. Not be too complicated. Avoid becoming a permanent component of

the purchase decision (automobile rebates) Profitable for retailers to handle.

Increase usage of the product Match or pre-empt

competitive actions. Stockpiling of product. Develop customer loyalty. Attract new users. Encourage brand switching.

F I G U R E 10 . 6

Reasons for Using Bonus Packs

Price-Offs Temporary reduction in price. Excellent for boosting short-

term sales. Excellent for generating

customer traffic. Can be implemented easily. Must be careful not to increase

customer price sensitivity. Can have detrimental impact

on brand and corporate image.