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Consumer promotions chp 11

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Rohit Sharma

This document discusses various types of consumer promotions including coupons, premiums, contests and sweepstakes, refunds and rebates, sampling, bonus packs, and price offs. For each promotion type, it outlines example sub-types, potential issues or problems, and tips for how to succeed. Some key issues discussed are reduced revenues from promotions, costs, consumer indifference, and diminished effectiveness over time. Tips for success include choosing the right prize, leveraging special events, and ensuring promotions are part of an integrated marketing communications plan with multiple brand exposures. The document concludes that promotion plans should support a brand's image and target specific customer audiences, including those prone to promotions, brand-loyal, and price-sensitive

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Consumer Promotions Chapter 11 with Duane Weaver
CONSUMER PROMOTIONS (a.k.a. sales promotions)are the incentives aimed at a firms customers.
TYPES OF CONSUMER PROMOTIONS COUPONS Types: Bounce Back Scanner Delivered Cross-Ruffing Response Offer Issues: Reduces revenues (giving it away for no reason) Mass-cutting (fraud) Counterfeiting (pay for phoney coupons) Misredemptions (clearinghouse redeems even when customer does not)
TYPES OF CONSUMER PROMOTIONS PREMIUMS Types: Free-in-the-mail (gifts for buying) In/on-package (attached gifts e.g.: toys) Store or manufacturer (provided at time of purchase from store or manufac.) Self-liquidating (premium sold at cost to consumer) Issues: Time (short life spans popularity wanes) Cost (exclusivity increases demand and thus higher prices for desired items)
TYPES OF CONSUMER PROMOTIONS CONTESTS AND SWEEPSTAKES Contest = participant must compete (activity needed)often purchase needed to enter Sweepstake = no purchase required, chances of winning are probability driven (a random draw). May have restrictions of one entry per store, etc. Problems Costs Consumer Indifference Clutter How to Succeed The right prize Take advantage of special event Should be coordinated with advertising Goal should be to encourage customer traffic and boost sales NOTE: brand awareness increases with multiple exposures to ads or contests.
TYPES OF CONSUMER PROMOTIONS REFUNDS AND REBATES Cash returns offered after the purchase of a product. Problems Costs (giving it up and admin. is up) Paperwork (much more work) Diminished Effectiveness (expected vs. reward) How to Succeed Visibility Perceived Newness An Impact
TYPES OF CONSUMER PROMOTIONS SAMPLING Delivery of a product to consumers for their use and consumption, normally offered free of charge. Problems Cost is high. (Try BUZZ marketing in lieu?) Packaging must be congruent with full size version for product recognition. Requires careful planning of distribution. How to Succeed As part of IMC plan Focus is to induce TRIAL USE Most effective for NEW products or NEW versions Can switch BRAND LOYALTY (up to 70%)
TYPES OF CONSUMER PROMOTIONS BONUS PACKS Additional or extra number of items included (20- 100% more, average = 30% more). Problems Consumers skeptical Small = not much added value Large = well it was priced too high to begin with COSTLY (amounts, packaging, shipping) How to Succeed If it is perceived as a bargain or value For ongoing products with high competition, it can help maintain brand loyalty and reduce brand switching at minimal cost (again it might be giving it away too)
TYPES OF CONSUMER PROMOTIONS PRICE OFFS Temporary Reduction in price. Problems Devastating to PROFITS Can require at least 20% increase in sales to accommodate for only a 5% reduction in price. Makes consumers more price sensitive (waiting to buy or brand switching is inspired) It is a slippery slope! How to Succeed Best on products/services not normally discounted. Can increase store traffic and boost sales (E.G.: lost litre concept to drive higher margin items) Appeals to customers Monetarily Immediate Reward Appeal Should be part of a more complete IMC plan, not stand- alone
Planning for Consumer Promotions Promotion plan should be relative to a specific Target Audience Promotion plan should support brand image and brand position Segmenting customers based on Sales Promotions: 1. Promotion prone customers Coupons, price-off, or premium responsive 1. Brand-loyal customers Ignore deals being offered from other brands, always stays loyal 1. Price-sensitive customers Price is primary driverfavour any type of promotion that reduces price
THANK YOU!

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Consumer promotions chp 11

  • 1. Consumer Promotions Chapter 11 with Duane Weaver
  • 2. CONSUMER PROMOTIONS (a.k.a. sales promotions)are the incentives aimed at a firms customers.
  • 3. TYPES OF CONSUMER PROMOTIONS COUPONS Types: Bounce Back Scanner Delivered Cross-Ruffing Response Offer Issues: Reduces revenues (giving it away for no reason) Mass-cutting (fraud) Counterfeiting (pay for phoney coupons) Misredemptions (clearinghouse redeems even when customer does not)
  • 4. TYPES OF CONSUMER PROMOTIONS PREMIUMS Types: Free-in-the-mail (gifts for buying) In/on-package (attached gifts e.g.: toys) Store or manufacturer (provided at time of purchase from store or manufac.) Self-liquidating (premium sold at cost to consumer) Issues: Time (short life spans popularity wanes) Cost (exclusivity increases demand and thus higher prices for desired items)
  • 5. TYPES OF CONSUMER PROMOTIONS CONTESTS AND SWEEPSTAKES Contest = participant must compete (activity needed)often purchase needed to enter Sweepstake = no purchase required, chances of winning are probability driven (a random draw). May have restrictions of one entry per store, etc. Problems Costs Consumer Indifference Clutter How to Succeed The right prize Take advantage of special event Should be coordinated with advertising Goal should be to encourage customer traffic and boost sales NOTE: brand awareness increases with multiple exposures to ads or contests.
  • 6. TYPES OF CONSUMER PROMOTIONS REFUNDS AND REBATES Cash returns offered after the purchase of a product. Problems Costs (giving it up and admin. is up) Paperwork (much more work) Diminished Effectiveness (expected vs. reward) How to Succeed Visibility Perceived Newness An Impact
  • 7. TYPES OF CONSUMER PROMOTIONS SAMPLING Delivery of a product to consumers for their use and consumption, normally offered free of charge. Problems Cost is high. (Try BUZZ marketing in lieu?) Packaging must be congruent with full size version for product recognition. Requires careful planning of distribution. How to Succeed As part of IMC plan Focus is to induce TRIAL USE Most effective for NEW products or NEW versions Can switch BRAND LOYALTY (up to 70%)
  • 8. TYPES OF CONSUMER PROMOTIONS BONUS PACKS Additional or extra number of items included (20- 100% more, average = 30% more). Problems Consumers skeptical Small = not much added value Large = well it was priced too high to begin with COSTLY (amounts, packaging, shipping) How to Succeed If it is perceived as a bargain or value For ongoing products with high competition, it can help maintain brand loyalty and reduce brand switching at minimal cost (again it might be giving it away too)
  • 9. TYPES OF CONSUMER PROMOTIONS PRICE OFFS Temporary Reduction in price. Problems Devastating to PROFITS Can require at least 20% increase in sales to accommodate for only a 5% reduction in price. Makes consumers more price sensitive (waiting to buy or brand switching is inspired) It is a slippery slope! How to Succeed Best on products/services not normally discounted. Can increase store traffic and boost sales (E.G.: lost litre concept to drive higher margin items) Appeals to customers Monetarily Immediate Reward Appeal Should be part of a more complete IMC plan, not stand- alone
  • 10. Planning for Consumer Promotions Promotion plan should be relative to a specific Target Audience Promotion plan should support brand image and brand position Segmenting customers based on Sales Promotions: 1. Promotion prone customers Coupons, price-off, or premium responsive 1. Brand-loyal customers Ignore deals being offered from other brands, always stays loyal 1. Price-sensitive customers Price is primary driverfavour any type of promotion that reduces price