Advertising Promotion Study Set 2
Quiz 20 :
Consumer Sales Promotion
Mail-in premiums are a type of consumer-oriented premiums, where consumers are offered a free item from the sponsoring manufacturer through the mail. For taking advantages of such an opportunity, a customer is required to submit the specified number of proofs of purchase. In some cases, the manufacturer extends mail-in premiums in exchange of some action taken by the customer about the brand. Generally, consumers are required to pay handling and shipping costs in order to receive the premium. Since the mail-in premiums do not offer an immediate reward to the consumers, therefore, it is positioned as accomplishing just a trial-impact function. Another reason to place it under trial purchases is due to the fact that only 2-4 percent of the consumers actually take benefits from mail-in premium opportunities. Hence, based on its limited exposure and delayed gratification for consumers, it should aptly be considered as trail impact function.
Self-liquidating premium is a form of sales promotion technique, which pays for itself. Under this method, customers submit proof of purchase or vouchers along with handling and shipping costs to obtain a premium gift. Being a processed meat product seller, here are the two premiums that can be offered themed on the product category during the summers, while targeting families with school children: 1. Ice-cream Bucket for $25: First premium can be an ice-cream bucket for $25. The reason for selecting this premium is based on the fact that children prefer to pick their favorite ice-cream during summers over other products. Even adult family members prefer to settle down with ice-cream during the scorching heat. Also, since the customers will be required to submit five proofs of purchases, it will ensure that customers will become repeat customers and will try out either new product or same product for a total of five times before obtaining premium. At the same time, customers will appreciate the fact that they will get an ice-cream bucket for $25, which is originally priced in the menu at $55. 2. Pick Any One From B Menu: B menu is a favorite for both children and adults during summers. Thus, offering choice to pick-up any one item from the B menu for just $25 is expected to cheer the customers. To obtain such premium, customers will be required to submit five proofs of purchases. The premium item is expected to help boost the sales of B items during the summer, which might also make the menu a success for the company. Customers are highly likely to go for the premium item as they will get a chance to try a new item for just $25, which otherwise costs $50.
Price-off promotions offer a reduced price, generally in the range of 10 to 25 percent over a brand's regular price. Price-off information is clearly labeled on the package. The promotion creates an immediate reward for the customer, which affects repeat purchases. The main objectives of price-off promotion are as follows: • Offer reward to the existing users of the brand, • Encourage customers to buy more quantities of a brand, • Lead consumers to buy a brand repeatedly, • Certain that the promotional dollars provide direct benefit to consumers, and • To get off-shelf display space during such promotions. In order to prevent abuse of price-off labeling tactics, Federal Trade Commission enacted the Fair Packaging and Labeling Act, in 1966. The purpose of the Act was to establish regulations so as to prevent manufacturers from discriminating price-off labeling. A continuous or near-continuous usage of price-labeling would send a wrong message to the customers as they will believe that a brand was on sale even when it was sold on its regular price. Hence, the regulations were implemented to counter such deceiving price-off labeling practices.