CouponsA coupon is a ticket or document that can be exchanged for a financial discount or rebate when purchasing a product. Show
Learning Objectives Show how and why coupons are used as part of sales promotion methods Key TakeawaysKey Points
Key Terms
Introduction Coupons are hot and the state of the economy has much to do with their popularity. Article after article about saving money mentions using coupons. And consumers are following their advice. Why Consumers Love Coupons: It's in the DefinitionA coupon is a ticket or document that can be exchanged for a financial discount or rebate when purchasing a product. Coupons offer instantly redeemable savings on certain products. That means that consumers get an instant reduction on the price at the point of purchase. They don't have to send anything to the manufacturer, they don't have to enter any type of contest. They walk away from the store with the satisfaction that they have saved money. Origins of CouponsIn 1887, the Coca-Cola Company was incorporated in Atlanta with Asa Candler as one of the partners. He transformed Coca-Cola from an insignificant tonic into a profitable business by using innovative advertising techniques. The key to this growth was Candler's ingenious marketing, which included having sales representatives distribute complimentary coupons for Coca-Cola. Coca-Cola Coupon: Believed to be the first coupon ever, this ticket for a free glass of Coca-Cola was first distributed in 1888 to help promote the drink. By 1913, the company had redeemed 8.5 million tickets. Coupons were mailed to potential customers and placed in magazines. The company gave soda fountains free syrup to cover the costs of the free drinks. It is estimated that between 1894 and 1913 one in nine Americans had received a free Coca-Cola, altogether totaling 8,500,000 free drinks. Marketers' Love / Hate Relationship with Coupons Why would a company let consumers walk away paying less for their product than the displayed price? Peer pressure may be one reason. Coupons are an inexpensive form of marketing. Due to this fact, almost
half of all retailers say that they use some type of coupon program. If a company's competitors are doing it, the company will most likely consider doing it as well.
The idea behind a coupon program isn't simply
to get consumers to buy your product. You want them to notice your brand. Well-designed coupon programs accomplish that goal. In addition, retailers will benefit from such programs as it will drive traffic to their store.
How Coupons are DistributedYou probably run across coupons on a daily basis. Open your mailbox and you'll see direct mail containing coupons. Look on the Internet and you'll see coupons that can be distributed electronically. A product that you buy may actually have a coupon on the package or you might go shopping and be happily surprised to find a pad on the shelf containing product coupons.Creating Effective CouponsEven though marketers may be happy to not have coupons redeemed, that is not the objective of issuing coupons. You do want to lure consumers to redeem the coupon. That's how you get noticed in the sea of other offers.To accomplish that goal coupons must be created with clear, precise text that shows the:
Measuring Effectiveness of Coupon Programs You will not be able to judge the effectiveness of your coupon campaign without testing and measuring it. Tracking codes let retailers know not only who redeemed the coupons, but also where the coupons were found. This data can help you decide which coupon is best for your target audience. RebatesA rebate is an amount paid by way of reduction, return, or refund on what has already been paid or contributed. Learning Objectives Examine the rationale behind and the use of rebates as part of sales promotions Key TakeawaysKey Points
Key Terms
Introduction A rebate is an amount paid, by way of reduction, return, or refund on what has already been paid or contributed. It one of the sales incentives promotion marketers use to supplement product sales. Rationale Behind RebatesBeer Rebate: Unlike coupons, customers must mail the rebate to the manufacturer to get their money back.
Benefits and Costs for Consumers Rebates may seem to offer customers lower pricing. Deal hunter sites frequently tout the benefits of rebates in making technology affordable. According to 2011
research, 47% of consumers submitted a rebate within the past 12 months; whereas similar research conducted in 2009 showed that only 37% of consumers had submitted a rebate in the preceding year. Still, rebates take a certain amount of time and effort from the consumer - figuring out the rules, filling out the forms, preparing and dropping off the mailing, cashing in the check, keeping track of the paperwork while this is being done. Thus, a rebate can be thought of as being paid to do this
paperwork and provide one's personal data to the company. Chances of rebate mailing being lost or failing some criteria may further reduce the expected return on this effort. Consumers who are aware of this, and who value their time, effort and opportunity costs above the value of the rebate, may choose to ignore a non-instant rebate that requires such procedures and assume the out-the-door price when considering the purchase. On the other hand, if the consumer does not mind these obstacles and
is more concerned with the price than their time for any reason, the rebate may be seen as a deal. PremiumsPremiums are prizes, gifts, or other special offers consumer receive when purchasing products. Learning Objectives Identify the rational, types and use of premiums from a sales promotional and personal selling perspective Key TakeawaysKey Points
Key Terms
Introduction Another form of consumer
sales promotion is the premium. Premiums are prizes, gifts, or other special offers received when a consumer purchases a product. When a company presents a premium, the consumer pays full price for the good or service, as opposed to coupons that grant price reductions or to samples, instead of receiving the actually product. Type of PremiumsPremiums fall into one of two categories: free premiums which only require the purchase of the product and self-liquidating premiums which require consumers to pay all, or some, of the price of the premium. Free PremiumsFree-in-the-mail premiums are gift that individuals receive for purchasing products. Free In-The-Mail Premium: Such premiums are gifts individuals receive for buying a product. The marketing objectives of such premiums are to:
The benefits of Free-In-The-Mail Premiums are that:
In-or On-package Premiums
The benefits of In- or On-Package Premiums are that they:
Store or manufacturer premium are gifts given by either the retail store or the manufacture when the customer purchases a product.
Marketers benefits from store or manufacture premiums as they add value to their brand. Self Liquidating PremiumsSelf liquidating premiums require the consumer to pay an amount of money for a gift or item. Getting Double: Self-liquidating premiums require consumers to pay an amount of money for a gift or an item. The marketing objectives of this type of premium is to attract more customers with low prices. Keys to Successful Premium ProgramsSuccessful premium programs require that marketers:
Loyalty MarketingLoyalty marketing is an approach whereby a company focuses on growing and retaining existing customers through incentives and rewards. Learning Objectives Discuss the basis, use and impact of loyalty programs as a personal selling and sales promotion tool Key TakeawaysKey Points
Key Terms
Loyalty marketing is an approach to marketing, based on strategic management, in which a company focuses on growing and retaining existing customers through incentives. Various Loyalty Cards: Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior. Branding, product marketing and loyalty marketing all form part of the customer proposition – the subjective assessment by the customer of whether to
purchase a brand or not, based on the integrated combination of the value they receive from each of these marketing disciplines. Modern Consumer Rewards ProgramsFrequent Flyers Loyalty Marketing Impact Many loyalty programs
have changed the way in which consumers interact with the companies that they purchase products or services from and how much the consumers spend. Many consumers in the US and Europe have become quite accustomed to the rewards and incentives they receive by being a "card carrying" member of an airline, hotel or car rental program. In addition, research from Chris X. Moloney shows that nearly half of all credit card users in the US utilize a points-based rewards program. Contests and SweepstakesContests and sweepstakes are two forms of sales promotions which attract consumers by offering them the chance to win a valuable prize. Learning Objectives Discuss the characteristics of contests and sweepstakes and how companies benefit from their use
Key TakeawaysKey Points
Key Terms
Introduction
Consumers tend to like sales promotions because they get something for "free. " If you as a marketer really want to get their attention, however, give a select few of them the chance to receive something with a high value.
ContestsContests normally require the participant to perform some type of activity. The winner is selected based on who performs the best or provides the most correct answers. No purchase is required to enter a contest and a panel of judges determines the winner. Consumers can enter as many times as they wish, although it is permissible for firms to restrict customers to one entry per visit to the store. The Best Quote Wins: Contests require skill; sweepstakes generally only reward luck. Sweepstakes There is another consumer sales promotion known as a sweepstake (also known by its inflected forms which are both single and plural: sweepstakes and sweeps). These have become
associated with marketing promotions targeted toward both generating enthusiasm and providing incentive reactions among customers. A sweepstake entices consumers to submit free entries into drawings of chance (and not skill) that are tied to product or service awareness wherein the featured prizes are given away by sponsoring companies. General Structure of Winning a Sweepstakes Prize Almost every
sweepstakes in the United States offering prizes valued at 600 dollars or greater will typically follow the following structure:
Winner notification
By law, the sponsors of sweepstakes must not
require the prize winners to pay any shipping or handing charges in order to win or receive their prizes. How Marketers Value from Contests and SweepstakesMarketers have a lot to gain from giving away valuable prizes to consumers. Contests and sweepstakes allow them to:
SamplingA free sample is a portion of a product given to consumers at no cost for their trial with the aim of driving product adoption. Learning Objectives Describe the characteristics and proper methods of sampling Key TakeawaysKey Points
Key Terms
IntroductionIn 2000, best-selling author Seth Godin released a book entitled "The Idea Virus" and then proceeded to give it away for free. Was Seth, who has sold tons of books, suffering from temporary insanity? No, quite the contrary. You see, Seth knew that if he gave the book away for free, people would read it, and if they liked it they would help create a buzz about the book.That's exactly what happened. In less than a month, 400,000 copies were downloaded for free and even though the downloads were free, people bought the hardcover. The book ended up being #5 on Amazon.com's best seller list. The promotion strategy Seth Godin used is called sampling and when done correctly it can be one of the most effective ways to market your product. What is Sampling? A free sample or "freebie" is a portion of food or other product (for example, beauty products) given to consumers in shopping malls, supermarkets, retail stores, or other venues. Sometimes samples of non-perishable items are included in direct marketing mailings. Try it, You'll Like it.: This free wine tasting allows potential buyers to try, or sample, the wine before making a purchase. Many consumer product companies now offer free samples through
their websites to encourage consumers to regularly use the products and to gather data for mailing lists of potentially interested customers. HistorySoap manufacturer Benjamin T. Babbitt in the 19th century was one of the first known, though almost certainly not the first ever, people to offer free samples of his products. Other Samples It is also possible to purchase products in small "trial size" containers. This is common with toiletries such as shampoo, which are useful for vacations or
other travel, where large bottles or other containers would be impractical (or more recently, not permitted for air travel). These are also often provided in hotel and motel rooms for the guests. How to Create an Effective Sampling ProgramSampling has been around for ages. So it obviously works. But like other promotional programs, bad implementation will lead to bad results. Here are some tips marketers use to create successful sampling programs:
Point-of-Purchase PromotionsPoint-of-sale displays are sales promotions that are placed where they can easily draw customer attention and trigger impulse buying. Learning Objectives Illustrate the rationale and use of point of purchase promotions Key TakeawaysKey Points
Key Terms
At some point in your life, you have been motivated and stimulated to buy something on impulse: an unplanned and somewhat emotionally driven purchase. Don't be ashamed. You aren't alone. According to research, almost 66% of all decisions to buy something are made while people are in the store shopping. What's more, 53% of these decisions are classified as impulse buying. Point-of-Purchase Display: A point-of-sale display selling products related to the Easter holiday. Point of purchase promotions offer marketers one of the most effective sales promotion tools included in the "promotional mix." Point-of-Purchase Promotion Defined
Point-of-sale displays (POS) are a specialized form of sales promotion found near, on, or next to a checkout counter (the "point of sale"). They are intended to draw the customers' attention to products. These may be new products, a special offer, or may promote special events, such seasonal or holiday-time sales.
Note that POS can also refer to systems used to record transactions between the customer and the commerce, such as check-out registers, which are used at the point of sale. Don't get confused if you see it used in this context. How It Works In smaller retail outlets, POS displays are usually supplied by the manufacturer of the products, but sited, restocked, and maintained by in-store salespersons. This is less common in larger retail outlets with strong purchasing power,
because they control supplier activities and prefer to use sales material designed in-house to ensure that store layouts and corporate themes are consistent.
POS displays are also useful in outlets with limited floor space, as a way to utilize the much wasted
space around counters. Light BoxesA light box is the advertising industry term for a lighted POS display. These are similar to ones used by photographers, and use fluorescent bulbs to illuminate a poster that has been inserted into the light box from either the side or the rear. Creating Point-of-Purchase Displays that WorkSetting up a display at a cash register, though simple in theory, requires planning and knowledge in order to deliver desired results. Poor results may be caused by:
Online Sales PromotionOnline sales promotion can create personal relationships, channels of communication, and an exchange of information regarding a product. Learning Objectives Discuss on line sales promotion as a sales promotion method and relative to personal selling and sales promotion Key TakeawaysKey Points
Key Terms
IntroductionSales promotion techniques are certainly not new but they have been revitalized through new media and technology, especially as it relates to online usage. Internet Marketing Plan: Some of the same promotions that work offline also work online. Online sales promotions are meant to turn site visitors into consumers. The objective is to get the visitor to take action by contacting a sales representative and ultimately buying the offered product. The methods to accomplish this goal are diverse and include:
Personal Selling - An Integral Part of the Online Experience The personal touch often makes all the difference when selling. The development of a relationship with a sales representative created by a personal referral often makes the difference between an inquiry and a sale. Interactivity is the key to site stickiness. Through online sales promotion, relationships are developed, channels of communication are opened, and an exchange of information regarding a product's benefits and a consumer's
needs occurs. GiveawaysOnline offers and giveaways are simple and enable marketers to cultivate and gather valuable sales and demographic information. Personal likes, personal experience, email addresses, payment information, and addresses are needed in order to deliver gifts, product samples, free information, or other "value added" items. Software companies do this all the time when they offer free downloads, stripped down versions of the software, or trial periods. Look at the Results Online sales promotions enable you to obtain measurable results. Online sales promotions also enable you to see what the competition is doing. Most
importantly, online sales promotions enable you to identify what works and what does not, thereby saving you money and delivering you much more "bang for your buck. " Licenses and AttributionsCC licensed content, Shared previously
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Which type of sales promotion uses free samples coupons and rebates?Samples, coupons, premiums, contests, and rebates are examples of consumer sales promotions.
What is coupon and rebates?Whereas coupons offer deals up front, with the purchase of the product, rebates can be redeemed only after purchase.
Are rebates sales promotion tools?It is a type of sales promotion that marketers use primarily as incentives or supplements to product sales. Rebates are also used as a means of enticing price-sensitive consumers into purchasing a product. The mail-in rebate (MIR) is the most common.
Which element of the marketing mix makes frequent use of free samples coupons and contests?Sales promotion is another tool in the promotional mix. It contains methods of stimulating consumer purchase and is usually based on a short-term or immediate goal. Examples of sales promotion items are contests, sweepstakes, giveaways, free samples or coupons.
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