• Consumer Promotion Tools

• Consumer Promotion Tools

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

samples

Samples are offers of a trial amount of a product. Some samples are free; for Offers to consumers of a

others, the company charges a small amount to offset its cost. The sample might trial amount of a

be delivered door to door, sent by mail, handed out in a store, attached to another product. product or featured in an ad. Sampling is the most effective, but most expensive,

coupons

way to introduce a new product.

Certificates that give Coupons are certificates that give buyers a saving when they purchase speei­ buyers a saving when

I'ied products. Coupons can be mailed, included with other products or placed in they purchase a product.

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

cash refund offers coupons through shelf dispensers at the point of sale, by electronic point­of­sale (rebates)

printers or through 'paperless coupon systems' that dispense personalized Offers to refund part of

discounts to targeted buyers at the checkout counter in stores. Some companies the purchase price of a

are now offering coupons on their Web sites or through online coupon services. product to consumers

who send a 'proof of Cash refund offers (or rebates) are like coupons except that the price reduc­ purchase' to the

tion occurs after the purchase rather than at the retail outlet. The consumer manufacturer.

sends a 'proof of purchase' to the manufacturer, which then refunds part of the purchase price by mail.

price packs Price packs or reduced prices offer consumers savings off the regular price of Reduced prices that are

a product. The reduced prices are marked by the producer directly on the label or marked by the producer

package. Price packs can be single packages sold at a reduced price (such as two directly on the label or

for the price of one) or two related products banded together (such as a tooth­ package.

brush and toothpaste). Price packs are very cffectiv%even more so than coupons, in stimulating short­term sales.

premiums

Premiums are goods offered either free or at low cost as an incentive to buy a Goods offered either free

product. A premium may come inside the package (in­pack) or outside the or at low cost as an

incentive to buy a package (on­pack) or through the mail. If reusable, the package itself may serve as product.

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

Sales Promotion $23

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

self­liquidating 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 advertising specialities name and given as gifts to consumers. Typical items include pens, calendars, key

Useful articles imprinted rings, matches, shopping bags, T­shirts, caps and cot'i'ee mugs. Such items can be

vaith an advertiser's very effective. In a recent study, 63 per cent of all consumers surveyed were

name, given at gifts to either carrying or wearing an ad speciality item. More than three­quarters of

consumers. those who had an item could recall the advertiser's name or message before

patronage rewards showing the item to the interviewer.^

Patronage rewards are cash or other awards offered for the regular use of a Cash or other awards for the reg'idarune of a

certain company's products or services. For example, airlines offer 'frequent flyer certain company's plans', awarding points for miles travelled that can be turned in for free airline

products or seroives. trips. Some international hotels like Holiday inn and Marriott Hotels have an

'honoured guest' plan that awards points to users of their hotels. point­of­purehase (POP) Point­of­purchase (POP) promotions include displays and demonstrations

promotions

that take place at the point of purchase or sale. Unfortunately, many retailers do not Displays and like to handle the hundreds of displays, signs and posters they reeeive from manu­

demonstrations that take facturers each year­Manufacturers have responded by offering better POP mat­

place at the point of erials, tying them in with television or print messages, and offering to set them up.

purchase or sale. 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

824 • Chapter 19 Mass Communications: Advertising, Sales Promotion and Public Relations

Sales Promotions;

Where there are cross­country

Creating Successful

segments that are looking for

Europe­Wide Campaigns

recognition and reward, then, according to David Butter. Wunder­

Sales promotion tactics as market­ man Cato Johnson Europe's vice ing tools are difficult enough to

president, promotions that give gauge in domestic markets, let

customers the chance to win alone outside them. Like advertis­

competitions and draws are very ing, using a single theme, through

powerful.

one medium, to target a single audi­ There are a number of barriers ence across different countries is

that marketers should understand. tempting, but rarely successful.

One is the differing legislation Experts from the European

across individual countries. For Federation of Sales Promotion argue that the

example, it is very liberal in Italy, Spain and mechanics of promotional campaigns can trans­

Portugal, where gifts­with­purchase, prizes­with­ late well across national borders, on the basis that

purchasc and on­pack promotions are common­ the most powerful word which is understood

place. In Germany, laws dating back to the 1930s across cultures is 'free'. Giving away items free

mean that a free or very cheap premium is illegal, with a purchase tends to work well in most coun­

as is sampling if the product is not new, France is tries. Samples, where permitted, also work well,

moderately liberal in allowing premiums so long especially if they are attached to something

as they do not exceed 7 per cent of the value of bought or given away, Pan­European sampling

products up to and including FfrSOO or go above campaigns were run for Procter & Gamble's new

Ffr350. In the Netherlands, premiums must not Wash & Go and Johnson & Johnson's pH 5.5

exceed 4 per cent of the value of the main pur­ shampoo: the colours, on­card samples and

chase, while in Belgium the ceiling is 5 per cent. branding were consistent in each market. Only

Another hurdle to overcome is national, the language on the pactaging was changed.

safety standard.';. In Germany, safety standards Minipaek Sampling Solutions, the company that

are particularly tight, requiring a higher testing ran the campaigns, stressed that the principle

procedure than in the United Kingdom. In behind pan­European sampling campaigns is to

France, the firm's logo must he incorporated into look for cross­country convergences, not differ­

promotional products.

ences, and to leverage these similarities. The concept of the single European market is slowly making its impact on EC law. The latest ruling is that companies should not be disadvan­ taged due to individual national laws. Countries with restrictive legislation are compelled to open up to those which do not have the same restric­ tions. Thus German laws have been relaxed as a result. For example, the French cosmetics firm Yves Rocher produced catalogues full of special

offers that were available in Germany but illegal. The European Gourt found in favour of Yves Rocher. Germany's Rabattgesete, which forbids

the offer of certain types of discount, has been amended. Discounting has since been permitted in Germany. Clearly, when organizations intend to run a promotion in a number of European countries, they should check on the legality of it

across those markets.

Sales Promotion • 825

If it is becoming easier to get round national drink. The main difference in image across the laws in Europe, it is not so easy to overcome cul­

different countries was the relative strength of tured differences, prejudices and suspicions. If a

the brand. In Spain it is a much stronger brand, German buyer is offered a discounted product, he

which is popular among older consumers. A TV or she usually thinks that there is something

phone­in was used for Schquiz because of this svrong with it or it is deficient in some way. Any

and the fact that TV is a stronger medium. In priee reduction must therefore reassure the cus­

France, the smaller market for Schweppes tonic tomer and offer a good rationalization for the dis­

meant a smaller media spend for the brand and a count. Cultural differences also affect the type of

radio phone­in was used instead. merchandise used in the promotion. Household

Experts stress that effective European pro­ items, especially electrical goods, are very popu­

motional campaigns work best if marketers begin lar in Germany, Beach towels, sunglasses and T­­

by clarifying and defining their objectives and shirts are more popular in Spain and Portugal,

then decide on the best means, within the limita­ while in France, it is pens, lighters and watches.

tions of budgets and resources, to meet these In Italy, brand association is important ­ if the

objectives on a country­by­country basis. It is merchandise features a designer name, a recog­

also advisable to employ the knowledge of local nized brand name or a football club, the ehances

experts, who understand the sales promotion are that it will be well received.

business and their own consumers, in order to Media costs vary significantly. Marketers

avoid costly errors or embarrassment, Procter & must take eare not to put mortey­off vouchers in

Gamble distributed thousands of its Wash & Go publications that are worth less than the voucher,

shampoo and conditioner to Russian households, since dishonest shopkeepers will simply keep the

only to find that people were breaking into letter newspaper or cut the coupons out. Fraud is a

boxes and selling" the stolen samples on market problem too. In poorer countries, if an incentive

stalls!

is worth cheating for, people will cheat. More recently, the European Federation of To achieve successful European promotional

Sales Promotion (EFSP), comprising groups rep­ campaigns, managers have to carry out accurate

resenting the sales promotion industries in the research. Achieving economies of scale with

Netherlands, Ireland, the L T K, Spain, Italy, global brands and consistent campaigns may be

France, Denmark, Germany and Belgium, has attractive, but insufficient. Successful Europe­

been working towards a common framework gov­ wide promotions are invariably built around local

erning sales promotions introduced across and national criteria as opposed to being pan­

Europe. This will prove to be a difficult challenge, European or global. Other experts, however,

as members seek to 'harmonize' rules and regu­ argue that firms ean mix the two in the face of

lations for Europe­wide practices, without deny­ mass customization in many markets, where the

ing altogether individual country practitioners' mass is the core idea or strategy, which is cus­

freedom to promote.

tomized 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'

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 some­

thing, such as bingo numbers or missing letters, every time they buy, which may or may not help them win a prize.

826 • Chapter ] 9 Mass Communications: Advertising, Sales Promotion anil Public Relations