Copyright © 2010 by Pearson Education, Inc. publishing as Prentice Hall 12 Chapter Twelve Sales...

Copyright © 2010 by Pearson Education, Inc. publishing as Prentice Hall

12 Chapter Twelve

Sales Promotions

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• Coupons

• Premiums

• Contests and sweepstakes

• Refunds and rebates

• Sampling

• Price-offs

F I G U R E 1 2 . 1

Types of Consumer Promotions

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Coupons• 323 billion distributed

• Coupon usage• 78% of households use• 64% willing to switch brands

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F I G U R E 1 2 . 2Percentage of Consumers and Coupon Usage

Always20.7%

Sometimes37.7%

Rarely17.0%

Never24.6%

Source: Karen Holt, “Coupon Crimes,” Promo, Vol. 17, No. 5 (April 2004), pp. 23-29.

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A coupon accompanies this informational Gold Bond advertisement.

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Influencing Brand Purchases

• Sampling 7.78• Word-of-mouth 7.18

• Coupons 5.91• Advertising 5.61• Contests 1.24

On a scale of 1 to 10, the following are the top five influences on the brand purchased by a consumer.

Source: The Second Annual Survey of Consumer Preferences for Product Sampling, Santella & Associates (Http://www.santella.com/marketing.htm).

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Percentage of Sales with a Coupon

• Disposable diapers 17.1%• Detergents 15.0%• Cereal 13.4%• Wrapping materials, bags 12.8%• Oral hygiene products 11.7%• Household cleaners 11.7%

Product category % of sales using manufacturer’s coupon

Source: AC Nielson Scantrack, Santella & Associates

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• Print media (90%)• Direct mail • On- or in-package• In-store• Sampling• Internet• Sales staff

F I G U R E 1 2 . 3Methods of Distributing Coupons

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Print Coupons

• Consumers must make conscious effort to clip coupon

• Creates brand awareness• Must purchase brand on next trip to retailer• More likely to recall brand name

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Reasons for using:


Problems with Coupons

• Reduced revenues• Used by brand preference consumers (80%)

• “Necessary evil”• $500 million illegally redeemed

• Counterfeiting• Misredemption

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Types of PremiumsPrizes & Gifts

• Free-in-the-mail

• In- or on-package

• Store or manufacturer

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Premium Offer

Click picture for video.

An ad by Haik Humble Eye Center offering a premium with the purchase of custom pair of eye glasses.

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• Match the premium to the target market• Carefully select the premiums

• Avoid fads, try for exclusivity

• Pick premium that reinforces firm’s product and image• Integrate the premium with other IMC tools

• especially advertising and POP displays

• Don’t expect premiums to increase short-term profits (more image than 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

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

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Contests and Sweepstakes

• Contests – require activity, skill• Require purchase to enter

• Some states illegal

• Sweepstakes – random chance• Must publish odds of winning• Cannot require purchase

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Refunds and Rebates

• Refunds are smaller

• Rebates are larger

• Hassle to redeem

• Now expected by consumers

• Redemption rates• 30% overall• 65% for rebates over $50

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• In-store distribution• Direct sampling• Cross-ruff sampling (one

product on another)• Media sampling (in a magazine)• Professional sampling (doctors)• Selective sampling

F I G U R E 1 2 . 6

Types of Sampling

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Benefits of Sampling

• Introduce new products

• Generate interest

• Generate leads

• Collect information

• Boost sales

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Sampling Programs

• Problems• Cost• Distribution

• Effective sampling• Stimulate trial usage• Target the right audience

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Price-Offs

• Temporary price reduction• Stimulating sales• Reduces financial risk• Brand switching• Stockpiling

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Price-Offs

• Proven to be successful• Appeal of monetary savings• Reward is immediate

• Problems• Can have a negative impact on profit• Encourages consumers to become more

price-sensitive• Potential image on brand image

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Impact of Price-off on Consumer Purchase

Source: “Studies Indicate Coupons are an Effective Promotional Tool,” Santella & Associates (http://www.santella.com/coupon.htm)

Consumer unaware item was on sale.51%

Consumer purchased because of sale price9%

Consumer would have purchased item anyway40%

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http://www.santella.com/coupon.htm


Planning Consumer Promotions

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Promotion ProneBrand Loyal

Price Sensitive


Retail IncentivesConsumer Promotions

• Increase store traffic

• Increase store sales

• Attract new customers

• Increase the basket size

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Copyright © 2010 by Pearson Education, Inc. publishing as Prentice Hall 12 Chapter Twelve Sales...

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