Consumer Promotion Tools

The main consumer promotion tools include samples, coupons, cash refunds, price packs, premiums, advertising specialities, patronage rewards, point-of-purchase displays and demonstrations, and contests, sweepstakes and games.

Samples are offers of a trial amount of a product. Some samples are free; for others, the company charges a small amount to offset its cost. The sample might be delivered door to door, sent by mail, handed out in a store, attached to another product or featured in an ad. Sampling is the most effective, but most expensive, way to introduce a new product.

Coupons are certificates that give buyers a saving when they purchase speei-I'ied products. Coupons can be mailed, included with other products or placed in ads in newspapers and magazines. They can stimulate sales of a mature brand or promote early trial of a new brand. Today, marketers are increasingly distributing coupons through shelf dispensers at the point of sale, by electronic point-of-sale printers or through 'paperless coupon systems' that dispense personalized discounts to targeted buyers at the checkout counter in stores. Some companies are now offering coupons on their Web sites or through online coupon services.

Cash refund offers (or rebates) are like coupons except that the price reduction occurs after the purchase rather than at the retail outlet. The consumer sends a 'proof of purchase' to the manufacturer, which then refunds part of the purchase price by mail.

Price packs or reduced prices offer consumers savings off the regular price of a product. The reduced prices are marked by the producer directly on the label or package. Price packs can be single packages sold at a reduced price (such as two for the price of one) or two related products banded together (such as a toothbrush and toothpaste). Price packs are very cffectiv%even more so than coupons, in stimulating short-term sales.

Premiums are goods offered either free or at low cost as an incentive to buy a product. A premium may come inside the package (in-pack) or outside the package (on-pack) or through the mail. If reusable, the package itself may serve as a premium, such as a decorative biscuit container. Premiums are sometimes mailed to consumers who have sent in a proof of purchase, such as a box top. A

Table 19.6

Sales promotions in European countries: what is permitted and what is not

UK IRL Spa Ger i îïen Bel Ni, Pol ïta Ore Lux Aus Fin Nor Swe Swi Rus Hun Gz

On-pack price cut

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Branded offers

Y

Y

Y

v

Y

?

N

Y

Y

Y

Y

N

9

9

9

9

N

Y

Y

Y

In-pack premiums

Y

Y

Y

9

9

Y

V

Y

Y

Y

N

9

Y

N

9

N

Y

Y

Y

Multi-buy offers

Y

Y

Y

Y

9

9

Y

Y

Y

Y

N

9

"p

Y

9

N

9

Y

Y

Extra product

Y

Y

Y

?

Y

Y

9

y

Y

Y

Y

Y

9

Y

9

9

?

Y

Y

Y

Free prod net

Y

Y

Y

Y

Y

Y

9

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Re-use pack

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

9

Y

Y

Y

Y

Y

Y

Y

Free mail-ins

Y

Y

Y

N

Y

9

Y

Y

Y

Y

Y

s

N

Y

Y

N

N

Y

Y

Y

With-purchase

Y

Y

Y

P

Y

9

V

9

Y

Y

Y

N

9

Y

9

9

N

Y

Y

Y

X-pro duet offers

Y

Y

Y

9

Y

9

N

?

Y

Y

Y

N

9

9

N

9

N

Y

Y

Y

Collector devices

Y

Y

Y"

9

9

9

■p

9

Y

Y

Y

N

N

9

N

N

N

Y

Y

Y

Competitions

Y

Y

Y

?

9

9

Y

9

Y

Y

Y

9

9

Y

9

Y

Y

Y

Y

Y

Self-liquidators

Y

Y

Y

Y

Y

Y

Y

9

Y

Y

Y

N

Y

Y

Y

Y

N

Y

Y

Y

Free draws

Y

Y

Y

N

Y

N

N

N

Y

Y

Y

N

N

Y

N

N

N

Y

9

Y

Share-outs

Y

Y

Y

N

9

N

N

N

Y

Y

N

N

?

9

N

N

Y

Y

Y

Sweep/lottery

o

9

9

9

y

N

9

9

9

?

N

9

Y

N

N

N

Y

9

Cash-off vouchers

Y

Y

Y

N

Y

9

Y

Y

Y

Y

9

9

9

N

9

N

Y

Y

Y

Cash off purchase

Y

Y

Y

N

Y

N

Y

Y

Y

Y

N

N

9

N

N

N

Y

Y

Y

Cash hack

Y

Y

Y

y

Y

Y

Y

Y

Y

N

Y

N

9

9

?

Y

N

Y

Y

Y

In-store demos

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

9

Y

Notes: Y permitted, N not permitted, ? maybe permitted with certain conditions. Source: IMP.

Notes: Y permitted, N not permitted, ? maybe permitted with certain conditions. Source: IMP.

self-liquidating premium is a premium sold below its normal retail price lo consumers who request it.

Advertising specialities are useful articles imprinted with an advertiser's name and given as gifts to consumers. Typical items include pens, calendars, key rings, matches, shopping bags, T-shirts, caps and cot'i'ee mugs. Such items can be very effective. In a recent study, 63 per cent of all consumers surveyed were either carrying or wearing an ad speciality item. More than three-quarters of those who had an item could recall the advertiser's name or message before showing the item to the interviewer. ^

Patronage rewards are cash or other awards offered for the regular use of a certain company's products or services. For example, airlines offer 'frequent flyer plans', awarding points for miles travelled that can be turned in for free airline trips. Some international hotels like Holiday inn and Marriott Hotels have an 'honoured guest' plan that awards points to users of their hotels.

Point-of-purchase (POP) promotions include displays and demonstrations that take place at the point of purchase or sale. Unfortunately, many retailers do not like to handle the hundreds of displays, signs and posters they reeeive from manufacturers each year-Manufacturers have responded by offering better POP materials, tying them in with television or print messages, and offering to set them up.

Competitions, sweepstakes, lotteries and games give consumers the chance to win something, such as cash, trips or goods, by luck or through extra effort, A

advertising specialities Useful articles imprinted vaith an advertiser's name, given at gifts to consumers.

patronage rewards Cash or other awards for the reg'idarune of a certain company's products or seroives.

point-of-purehase (POP) promotions

Displays and demonstrations that take place at the point of purchase or sale.

Sales Promotions; Creating Successful

Europe-Wide Campaigns

Marketing Highlight

19.2

Sales promotion tactics as marketing tools are difficult enough to gauge in domestic markets, let alone outside them. Like advertising, using a single theme, through one medium, to target a single audience across different countries is tempting, but rarely successful.

Experts from the European Federation of Sales Promotion argue that the mechanics of promotional campaigns can translate well across national borders, on the basis that the most powerful word which is understood across cultures is 'free'. Giving away items free with a purchase tends to work well in most countries. Samples, where permitted, also work well, especially if they are attached to something bought or given away, Pan-European sampling campaigns were run for Procter & Gamble's new Wash & Go and Johnson & Johnson's pH 5.5 shampoo: the colours, on-card samples and branding were consistent in each market. Only the language on the pactaging was changed. Minipaek Sampling Solutions, the company that ran the campaigns, stressed that the principle behind pan-European sampling campaigns is to look for cross-country convergences, not differences, and to leverage these similarities.

19.2

If it is becoming easier to get round national laws in Europe, it is not so easy to overcome cultured differences, prejudices and suspicions. If a German buyer is offered a discounted product, he or she usually thinks that there is something svrong with it or it is deficient in some way. Any priee reduction must therefore reassure the customer and offer a good rationalization for the discount. Cultural differences also affect the type of merchandise used in the promotion. Household items, especially electrical goods, are very popular in Germany, Beach towels, sunglasses and T-shirts are more popular in Spain and Portugal, while in France, it is pens, lighters and watches. In Italy, brand association is important - if the merchandise features a designer name, a recognized brand name or a football club, the ehances are that it will be well received.

Media costs vary significantly. Marketers must take eare not to put mortey-off vouchers in publications that are worth less than the voucher, since dishonest shopkeepers will simply keep the newspaper or cut the coupons out. Fraud is a problem too. In poorer countries, if an incentive is worth cheating for, people will cheat.

To achieve successful European promotional campaigns, managers have to carry out accurate research. Achieving economies of scale with global brands and consistent campaigns may be attractive, but insufficient. Successful Europe-wide promotions are invariably built around local and national criteria as opposed to being pan-European or global. Other experts, however, argue that firms ean mix the two in the face of mass customization in many markets, where the mass is the core idea or strategy, which is customized to suit different markets. For example, Sohweppes tonic devised a core theme based on the game Trivia! Pursuit, which they called Schqui%, In France, tonie is a soft drink, while in the United Kingdom it is a mixer, in Spain a refreshment and in Germany a 'sophisticated'

drink. The main difference in image across the different countries was the relative strength of the brand. In Spain it is a much stronger brand, which is popular among older consumers. A TV phone-in was used for Schquiz because of this and the fact that TV is a stronger medium. In France, the smaller market for Schweppes tonic meant a smaller media spend for the brand and a radio phone-in was used instead.

Experts stress that effective European promotional campaigns work best if marketers begin by clarifying and defining their objectives and then decide on the best means, within the limitations of budgets and resources, to meet these objectives on a country-by-country basis. It is also advisable to employ the knowledge of local experts, who understand the sales promotion business and their own consumers, in order to avoid costly errors or embarrassment, Procter & Gamble distributed thousands of its Wash & Go shampoo and conditioner to Russian households, only to find that people were breaking into letter boxes and selling" the stolen samples on market stalls!

More recently, the European Federation of Sales Promotion (EFSP), comprising groups representing the sales promotion industries in the Netherlands, Ireland, the LTK, Spain, Italy, France, Denmark, Germany and Belgium, has been working towards a common framework governing sales promotions introduced across Europe. This will prove to be a difficult challenge, as members seek to 'harmonize' rules and regulations for Europe-wide practices, without denying altogether individual country practitioners' freedom to promote.

SOURCES: Searl Brierley, 'Harmony in discount', Marketing Week {14 October 1994), pp. 61-2; David Waller, 'Charged up over competition law1, Financial Times (23 June J 994), p. 16; Mar Lin Croft, "War oi independence', Marketing Week (3 March 1995), pp. 47-51.

competition calls for consumers to submit an entry - a jingle, guess, suggestion -to be judged by a panel that will select the best entries. A sweepstake calls for consumers to submit their names for a draw. For a lottery, consumers buy tickets which enter their names into a draw, A game presents consumers with something, such as bingo numbers or missing letters, every time they buy, which may or may not help them win a prize.

Salehoo Secrets and Tips

Salehoo Secrets and Tips

As with any web site, SaleHoo has a number of features that will help you in buying products from around the world. Once you have an account on SaleHoo, which only costs a one-time fee, you can establish up to twenty named searches for products. After that, any time those items become available, you’ll be alerted.

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Responses

  • ralf cole
    Which consumerpromotion tool is the most effective,but most expensive?
    3 years ago
  • doda
    What is Consumer Promotion Tools?
    3 years ago

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