Consumer Promotion Tools

Consumer Promotion Tools

The main consumer promotion tools include samples, coupons, cash refunds, price packs,
premiums, advertising specialties, patronage rewards, point-of-purchase displays and
demonstrations, and contests, sweepstakes, and games.
• Samples
are offers of a trial amount of a product. Sampling is the most effective—but
most expensive—way to introduce a new 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. Sometimes,
samples are combined into sample packs, which can then be used to promote other products and
services.
• Coupons
are certificates that give buyers a saving when they purchase specified products.
Most consumers love coupons: Coupons can stimulate sales of a mature brand or promote
early trial of a new brand. However, as a result of coupon clutter, redemption rates have
been declining in recent years. Thus, most major consumer goods companies are issuing
fewer coupons and targeting them more carefully.
• 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, who then refunds part of the purchase price by mail.
• Price packs
(also called cents-off deals) 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 effective—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,
ranging from toys included with kids' products to phone cards, compact disks, and computer CD-ROMs. A premium may come inside the package (in-pack), outside the
package (on-pack), or through the mail.
• Advertising specialties
are useful articles imprinted with an advertiser's name given as
gifts to consumers. Typical items include pens, calendars, key rings, matches, shopping
bags, T-shirts, caps, nail files, and coffee mugs. Such items can be very effective. In a
recent study, 63 percent of all consumers surveyed were either carrying or wearing an ad
specialty 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 flier plans, awarding
points for miles traveled that can be turned in for free airline trips.
• 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 receive 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.