Coupons and premiums achieve different objectives dependin - PowerPoint PPT Presentation

Loading...

PPT – Coupons and premiums achieve different objectives dependin PowerPoint presentation | free to download - id: 13c8d-YzZmN



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Coupons and premiums achieve different objectives dependin

Description:

Coupons and premiums achieve different objectives depending on the specific form ... Provide product samples in grocery stores and other retail outlets for trial ... – PowerPoint PPT presentation

Number of Views:95
Avg rating:3.0/5.0
Slides: 40
Provided by: Eliz221
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Coupons and premiums achieve different objectives dependin


1
Consumer-Oriented Promotions Sampling and
Couponing
? 2007 Thomson South-Western
2
Why Use Consumer Promotions?
  • Promotions accomplish goals that advertising by
    itself cannot
  • Buy now rather than later
  • Buy your brand rather than a competitor's
  • Buy more and
  • Buy frequently.
  • Consummate the transaction

3
Brand Management Objectives and Consumer Rewards
Three general categories of objectives
  • (1) Generating trial purchases
  • (2) Encouraging repeat purchases
  • (3) Reinforcing brand image

4
Marketer Objectives and Consumer Rewards
Consumer Rewards
  • All promotion techniques provide consumers with
    rewards
  • Typically in the form of cash savings or free
    gifts
  • Consumers are more responsive to immediate than
    delayed rewards

5
Varieties of Sales Promotion Methods
6
Classifications of Promotion Methods
7
Caution is in Order!
  • The classification of promotional tools is
    necessarily simplified
  • Promotions are capable of accomplishing more than
    a single objective
  • Manufacturers use consumer-oriented sales also to
    leverage trade support
  • Coupons and premiums achieve different objectives
    depending on the specific form of delivery vehicle

8
Sampling
  • Sampling
  • The premier sales-promotion device for
  • generating trial usage by delivering an
  • actual- or trial-sized product to consumers

9
Sampling
  • Mailed directly to households
  • Targeted by demographic characteristics or
    geodemographics
  • Direct mail

Newspapers and magazines
Door to door by special distribution crews
On- or in-pack sampling
High-traffic locations
In-store sampling
Internet sampling
10
Sampling
  • The Sunday newspaper is an increasingly
    attractive medium for broad-scale sampling
  • Direct mail

Newspapers and magazines
Door to door by special distribution crews
On- or in-pack sampling
High-traffic locations
In-store sampling
Internet sampling
11
Sampling
  • Allows considerable targeting
  • Lower cost than in-store or direct-mail sampling
  • Short lead times
  • Direct mail

Newspapers and magazines
Door to door by special distribution crews
On- or in-pack sampling
High-traffic locations
In-store sampling
Internet sampling
12
Sampling
  • Uses the package of another product to serve as
    the sample carrier
  • Direct mail

Newspapers and magazines
Door to door by special distribution crews
On- or in-pack sampling
High-traffic locations
In-store sampling
Internet sampling
13
Sampling
  • On- or In-pack
  • Sampling

14
Sampling
  • Shopping centers, movie theaters, airports, or
    special events
  • Change points colleges, marriage offices
  • Direct mail

Newspapers and magazines
Door to door by special distribution crews
On- or in-pack sampling
High-traffic locations
In-store sampling
Internet sampling
15
Sampling
  • Provide product samples in grocery stores and
    other retail outlets for trial while consumers
    are shopping
  • The most frequent form

Direct mail
Newspapers and magazines
Door to door by special distribution crews
On- or in-pack sampling
High-traffic locations
In-store sampling
Internet sampling
16
Sampling
  • Brand managers are increasingly distributing
    samples online
  • Specialized online sample delivery firms aid this
    process (e.g. StartSampling)

Direct mail
Newspapers and magazines
Door to door by special distribution crews
On- or in-pack sampling
High-traffic locations
In-store sampling
Internet sampling
17
Major Sampling Practices
  • Targeting rather than mass distributing samples
  • Targeting middle school kids, young adults,
    business executives, newlyweds, etc.
  • Warner Lambert and anti-itch cream
  • Using innovative distribution methods where
    appropriate
  • Progresso Soup Soupermen
  • Guinness Beer and Irish festivals
  • ConAgra and Marie Callender frozen foods
  • Ben Jerrys Urban Pasture
  • Undertaking efforts to measure samplings return
    on investment
  • Break even point at which sampling costs equal
    profits from conversions

18
When Should Sampling Be Used?
  • Brand is demonstrably superior/has distinct
    relative advantages
  • When consumption is the best influencer of
    attitudes
  • Concept is difficult to communicate by
    advertising alone
  • Charmin Toilet tissue
  • Olestra made fat-free Pringles
  • Can afford to generate consumer trial quickly

19
Problems with Sampling
  • Expensive
  • Mishandling in distribution
  • Distributed to the wrong market
  • In- or on-package samples do not capture current
    non-consumers
  • Can fail to reach sufficient numbers of consumers
    to justify its expense
  • May be misused by customers
  • Pilferage (PGs Vidal Sassoons Wash Go
    shampoo in Poland)

20
Couponing
  • Coupon
  • A promotional device that provides
  • cents-off to consumers upon its
  • redemption

21
A Buy One Get One Free Coupon Offer
22
Couponing Background
  • Around 250 billion coupons are distributed
    annually in the United States.
  • Cost to U.S. marketers is about 7 billion a
    year.

23
Coupon Distribution Methods
  • Freestanding insert (FSI) is preferred
  • Valassis Inserts, News America Marketing
  • The establishment of cooperative coupon programs
  • Val-Pak Direct Marketing Systems

24
Economic Impact
Face Value 1.00 Distribution and postage
cost .40 Handling charge .08 Consumer
misredemption cost .07 Internal prep and
processing cost .02 Redemption cost
.02 Total Cost 1.59
25
Is Couponing Profitable?
  • Households most likely to redeem coupons were
    also the most likely to buy the brand in the
    first place
  • However, companies have to offer coupons to
    prevent losing consumers to other brands that do
    offer coupons

26
Point of Purchase Couponing
Instantly Redeemable Coupons
Shelf- Delivered Coupons
Scanner- Delivered Coupons
  • Peelable from the package at the point of
    purchase
  • Represent an immediate reward
  • An alternative to price-off deals
  • Redemption rate about 30

27
IRCs vs. FSI coupons
  • IRCs and FSIs with face values of 50 cents and 1
  • IRCs outperformed FSIs in sales
  • 50 cent IRC outperformed 1 FSI
  • High value FSI coupons signal high prices and
    scare customers away
  • High value FSI coupons attract current brand
    users but scare away potential switchers

28
Point of Purchase Couponing
Instantly Redeemable Coupons
Shelf- Delivered Coupons
Scanner- Delivered Coupons
  • Instant Coupon Machines, Smart SourceTM
  • Machines are attached to the shelf alongside
    coupon-sponsoring brands
  • Redemption rate about 11

29
Shelf-Delivered Coupons
  • Instant coupon machine
  • (so called SmartSource)

30
Point of Purchase Couponing
Instantly Redeemable Coupons
Shelf- Delivered Coupons
Scanner- Delivered Coupons
  • Catalina Marketing Corp. offers two programs
  • Reward is delayed
  • Potentially very effective because they provide a
    way to carefully target coupon distribution

31
Point of Purchase Couponing
Scanner- Delivered Coupons
Checkout Coupon
Checkout Direct
  • Delivers coupons based on the particular brands a
    shopper has purchased
  • Directed at competitive-brand users
  • Redemption rate about 9

32
Point of Purchase Couponing
Scanner- Delivered Coupons
Checkout Coupon
Checkout Direct
  • A coupon for the sponsoring manufacturers brand
    is automatically dispensed for use on the
    shoppers next purchase occasion
  • Directed at users who satisfy a manufacturers
    prescribed demographic or product-usage
    requirements
  • E.g. Baked Lays targeted super heavy users (at
    least 8 times in the past 12 months) of Tostitos
    Lays.

33
Mail/Media Delivered Coupons
Mail-Delivered Coupons
  • Highest household penetration
  • Highest redemption rate of all mass-delivered
    coupons (3.5)
  • Increase the amount of product purchases
  • Relatively expensive
  • Inefficient and expensive for brands enjoying a
    high market share

34
Mail/Media Delivered Coupons
FSIs and Other Media-Delivered Coupons
  • 87 of all coupons distributed via Sunday
    newspaper freestanding inserts
  • Broad exposure
  • Relatively cheaper
  • Reminder function
  • Advertising function
  • Redemption rate is very low
  • Dont generate much trade interest
  • Susceptible to misredemption

35
In- and On- Pack Coupons
  • Included in- or on- products package
  • Cannot be removed at the point of purchase Its
    for next purchase
  • A coupon for one brand is promoted by another
    brand (crossruffing) e.g. General Mills cereal
    boxes carried coupons for their granola bars.
  • Has bounce-back value
  • No distribution costs
  • Redemption rates are higher
  • Delayed value to consumers
  • Dont reach nonusers of the carrying brand

36
Online Couponing
  • A number of Internet sites now distribute
    coupons.
  • Consumers print their own coupons, at no
    additional cost to the advertiser.
  • There is a great potential for fraud with these
    coupons that consumers can print themselves so it
    remains to be seen how popular this method will
    remain

37
Redemption Process and Misredemption
(F)
  • Manufacturer

Redemption Center
(E)
(A)
(D)
(B)
(C)
Consumers
Retailers
Clearinghouse
(M)
Organized criminals Terrorists Media
employees Crooked retailers
M misredemption
38
The Consequences
  • Estimates of the misredemption have ranged from a
    low of 15 to a high of 40. True misredemption
    rate is about 3 or 4 representing millions of
    dollars lost by manufacturers.

39
The Participants
  • Consumers present coupons that have expired, for
    items not purchased, or for a smaller size than
    specified by the coupon.
  • Clerks take the coupons to the store and exchange
    them for cash without making a purchase.
  • Store Management retailers may boost profits by
    submitting extra coupons in addition to those
    redeemed legitimately.
  • Shady Clearinghouses engage in misredemption by
    combining illegally purchased coupons with real
    ones and certifying the batch as legitimate.
About PowerShow.com