4 Types of Consumer Promotions CouponsPremiumsContests and sweepstakesRefunds and rebatesSamplingBonus packsPrice-offs
5 Influencing Brand Purchases On a scale of 1 to 10, the following are the top five influences on the brand purchased by a consumer.SamplingWord-of-mouthCouponsAdvertisingContestsSource: The Second Annual Survey of Consumer Preferences for Product Sampling, Santella & Associates (
6 Consumers and Sales Promotions Targeted consumers are classified four ways:Promotion prone consumersBrand loyal consumersPrice sensitive consumersBrand preference
7 F I G U R E 1 2.6 In-store distribution Direct sampling Types of SamplingIn-store distributionDirect samplingResponse samplingCross-ruff samplingMedia samplingProfessional samplingSelective sampling
8 Sampling Fitness center Ice cream Dental service Clothing manufacturer 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?Fitness centerIce creamDental serviceClothing manufacturerAuto repair serviceOffice supply store
10 SamplingMost 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:CostCustomers discarding the sample without trying it (waste).
11 Types of Coupons Instant redemption Scanner-delivered Cross-ruffing/Co-brandingResponse offerE-couponsBounce-back/return coupon
15 Do Coupons have an Impact? In 2007 in the United States:323 billion distributed3 billion redeemed (0.93%)Average value was 89 centsSavings of $3.47 billionCoupon usage78% of households use64% willing to switch brands
17 A coupon accompanies this informational Gold Bond advertisement
18 PremiumsPrizes or gifts that consumers receive for purchasing products and services
19 Fast-food chains are well known for their in-store premiums.
20 Types of Premiums Free-in-the-mail In or on-package Store or manufacturerSelf-liquidating
21 F I G U R E 1 2.5 Keys to Successful 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
22 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.One trend is to ignite a viral buzz around the brand, through the use of social media
23 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.
24 F I G U R E 12.7 Increase usage of the product Reasons for Using Bonus PacksIncrease usage of the productMatch or pre-empt competitive actions.Stockpiling of product.Develop customer loyalty.Attract new users.Encourage brand switching.
25 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.
26 Promotion Combinations Overlay – two or more consumer promotions as part of a single campaignIntra-company tie-in – a consumer promotion with another product within the companyInter-company tie-in – a consumer promotion with another organization
27 Trade Promotions Trade Promotions For Manufacturers Account for 70% of marketing budgetOften 2nd largest expenseAccount for 17.4% of gross salesTrade AllowancesTradePromotionsTrade ShowsTrade IncentivesTrade Contests
28 Concerns about Trade Promotions Corporate reward structure due to sales quotasUsed for short-term sales goalsTend to be used outside of IMC Plans in many casesCostsOver-reliance to push merchandiseDifficult to reduce – competitive pressuresPotential erosion of brand image