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AN OUTLINE OF PROMOTIONAL TECHNIQUES
AND
GLOSSARY OF TERMS
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A: SUMMARY
1. Definition of Sales Promotion
A Marketing device that temporarily improves the value/price
relationship of a product to generate mainly short-term demand from
the end consumer, the distribution-chain or both.
2. Objectives Relative to Promotional Techniques
Promotions are undertaken either by manufacturers or retailers with
one or more of the following aims in view:
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A
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To obtain good point of sale display |
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B
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To obtain volume sales to the trade |
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C
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To obtain volume consumer sales |
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D
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To encourage trial purchase |
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E
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To encourage re-trial |
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F
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To encourage multiple purchase |
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Given the above objectives, the various promotional techniques
which can be used to achieve them, in total or in part, are listed
below.
| Promotional Technique |
Objectives Sought |
| On-, in-, or with-pack premiums |
ABCDEF |
| Money for premium |
ABCDEF |
| Container premium |
ABCDEF |
| Extra product free |
ABCDF |
| Money off coupon |
ABCDE |
| Cross-couponing |
ABCDE |
| Free mail-in premium |
ABCEF |
| Money back |
ABCDE |
| Self-liquidating premium |
AB |
| Competition |
AB |
3. The Main Types of Promotion
Some promotional techniques can be categorised by "weight",
i.e. the measurement of the effect to cost ratio. The terms Heavyweight,
Mediumweight and Lightweight indicate the effectiveness of a promotion
in obtaining volume sales, The cost of the promotion will be almost
in direct ratio to the achieved volume throughput.
Some of the main types of promotions in the three main categories
are listed below:
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(a)
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Heavyweight |
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(i)
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Reduced price offers |
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(ii)
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On pack premiums |
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(iii)
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Extra product free |
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(b)
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Mediumweight |
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(i)
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Free mail-in premiums |
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(ii)
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Couponing |
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(iii)
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Cross-couponing |
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(iv)
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Money back offers |
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(c)
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Lightweight |
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(i)
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Self-liquidating premiums |
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(ii)
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Competitions |
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This is a general guide. There are other promotional techniques
which may fall into any one of these categories, depending on interpretation;
these have been listed separately.
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I. |
Heavyweight Promotions
Free premiums, reduced price offers and free product are the
most expensive techniques. They are also most effective. Cost
is controlled by limiting the number of promotional packs distributed.
Premiums may be offered to the consumer in oneor other of the
following ways:
| 1. |
Free on-, in-, or with-pack
BAnded on, or in-pack premiums are commonly used since
in many instances the trade is traditionally reluctant
to handle with-pack premiums. |
| 2. |
In-store self liquidator, or Money for
premium
Where a reasonably high value premium item is offered
for a nominal price in-store against a specified purchase
requirement, e.g. Kitchen dishes for 30% of their price
with large packs of detergent.
The trade is reluctant to handle this sort of offer os
it involves extra work for the sales girls and in supermarkets
often results in congestion at the check-outs. |
| 3. |
Container premium
Where the product is packed in a re-useable container
of some sort, which is given free, e.g. storage-jars with
coffee.
Premium offers appear to be more effective than money
off, and generally cost less. However, the strength of
the premium depends entirely on the choice of premium. |
| 4. |
Extra product free
This is a standard giant pack offered for the price of
a large one; or an increased sizepack offered at
normal price, e.g. giving 1/4 lb or 125 grams) of detergent
free. It is an instant and appealing offer. |
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II. |
Mediumweight Promotions
Free mail-in premium offers, couponing, cross-couponing and
money back offers are less expensive than the promotional techniques
mentioned in section I. They are generally very effective and
(in addition to increasing trade purchases and display at point
of sale) will increase consumer sales, encourage consumer trial
and re-trail, and stimulate multiple purchase.
There are several ways of distributing a money of coupon; -
| 1. |
Money off coupon
(a) On pack
(b) Door to door distribution
(c) In press
(d) In-store leaflet
(e) Direct mail
This technique is often used in conjunction with other
promotional techniques. |
| 2. |
Cross-couponing
An on-pack coupon which entitles the purchaser to money
off another product. Often used by stores to promote own-brand
products. |
| 3. |
Free mail-in premium offer
Where a premium (either related to the procuct or otherwise)
is offered free against a stipulated proof of purchase,
e.g. 6 packet tops or wrappers from the product which
the consumer sends to the manufacturer's despatch address.
This technique can be particularly effective in stimulation
repeat or multiple purchase, if more than one packet top
or wrapper is required to qualify for the premium. |
| 4. |
Money back
When the consumer has purchased the specified brand she
receives, in part or in full, the price of the brand in
exchange for proof of purchase.
The offer can be conditional on single purchase (to encourage
further sampling of the same product), or cross-range
purchase (to obtain sampling of a range of products).
The money back can be returned in a variety of forms:
(a) Money in the pocket (either a coin attached to the
product, or a money voucher which can be cashed - with
no strings attached).
(b) A voucher against further purchase of the same product
(this technique is particularly attractive to the manufacturer).
(c) A money voucher which can only be used in a particular
shop or chain of shops (this technique is particularly
attractive to the participant reatiler). |
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III. |
Lightweight Promotions
Self-liquidating premium offers and competitions provide low
cost techniques for offering relatively high value gifts. They
are designed mainly to increase volume sales into the trade.
They can also provide good point-of-sale display.
| 1. |
Send away self-liquidating
premium offer
Where an expensive premium article (often related to the
use of the product) is offered at a concessionary price
against a stipulated proof of purchase. The extent of
the manufacturer's subsidy on the premium will depend
entirely on the promotional budget. Such a promotion can
be self-financing, even profit-making, and still represent
a good opportunity for point of sale display, using the
premium item in question in selected stores. |
| 2. |
Competition (trade
or consumer)
Competition always appeal to the consumer and are becoming
more and more sophisticated both in form and prize structures.
They are presented to the consumer:-
(a) On pack
(b) Door to door leaflet
(c) In-store leaflet
(d) Through theme media, notable press.
Competitions provide good display opportunities, usually
secure trade co-operation, and generate consumer excitement.
Prizes can be offered to the trade for the best display
of the product and its promotion, or the highest volume
of purchase. These competitions are generally well supported. |
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IV. |
Variable
Weight Promotions
Other than the promotional techniques mentioned above there
are others which cannot be given "weighting". They
can be either "heavy" or "light" depending
on a number of variables. Some examples may be summarised as
follows:-
| 1. |
Sponsorship
Financial support os given to activities or events. These
generally tend to be sporting events. |
| 2. |
Sampling
A product is distributed to potential purchasers via:-
(a) Door to door
(b) In-store
(c) Direct mail
(d) Magazine insert
(e) Banded to established brand
(f) Gift packs
This technique is expensive and is usually only used for
a product launch. However, there is an opportunity to
use in-store sampling as part of a total promotion.
The attraction of in-store promotion is the opportunity
it offers to demonstrate the product and its use in cases
where consumer sampling might otherwise be difficult to
achieve. E.g. demonstration of dried soup which may look
unattractive until reconstituted. |
| 3. |
Personality
Promotions
This technique was highly-favoured in the U.K. and other
markets at one time. A well advertised personality calls
on households, and rewards in cash or in kind those housewives
having the promoted product in the house at the time of
call. This tehcnique is expensive as it needs heavy media
support. It can be linked to in-store sampling of the
product. |
| 4. |
Character
Merchandising
An established fictional character, e.g. Batman, is used
in all advertising and display of the product. Obviously
copywright negotiations would be necessary. |
| 5. |
Added value
on the pack
The addition of hints, recipes, stories, jokes etc. on
the pack, giving it an intrinsic value at little extra
cost. |
| 6. |
Altruistic Promotion
This is a relatively new promotional technique, which
almost overlaps sponsorship. The manufacturer agreed
to contribute to a specified good cause in return for
proof of purchase. E.g. A major food company made a
money contribution towards the cost of a lifeboat for
every token from Fish Fingers packets received from
consumers.
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GLOSSARY OF TERMS
USED IN SALES PROMOTIONS |
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Appendix to "
An Outline of Promotional Techniques" |
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| These are the most regularly used
terms ...... |
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| Altruistic promotion: |
the manufacturer agrees to
contribute to af specified good cause in return for proof
of purchase |
| Banded on: |
See on-pack |
| Character merchandising: |
an established fictional character
is used in all advertising and display of the product. |
| Competition: |
prizes of varying value are
offered to competitors in reward for skill or a mixture
of both skill and luck in solving a problem.
A specified number of packet tops from the prodcut being
promoted must normally be submitted with each entry. The
prizes (other than money) may be paid for by the manufacturer
running the competition.
Alternatively a cooperative agreement to share the expenses
of the promotion may be made between the supplier of the
premiums and the manufacurer running the competition. |
| Container premium: |
a form of on-pack premium
- the promoted product is inside the gift, e.g. instant
coffee has been sold in coffee makers, glass tumblers,
storage and spice jars. |
| Couponing: |
the consumer receives a voucher
entitling her to money off the normal price of the promoted
product. |
| Cross-couponing: |
an on-pack coupon which entitles
the purchaser to money off another product. |
| Direct mail: |
distribution of promotional
literature or samples through the post. |
| Free mail-in
premium: |
these are free gifts which
the consumer has to send away for. Usually several "prooofs
of purchase" (labels, packet tops, bottle tops etc.)
must be enclosed with the application. |
| Gift pack sampling: |
purchasers of a product are
given a set of attractively-packed samples of other products
in the same range free. |
| Give-away: |
a low cost premium given away
free. |
| In-pack premium: |
the gift is actually inside
the packaging and cannot usually be seen at the time of
purchase e.g. plastic toys inside packets of breakfast
cereal. |
| In-store sampling: |
the product is demonstrated
in a shop or in each of a chain of shops, and samples
are offered to customers in the shop(s). |
| Magazine insert: |
a coupon or product sample
is placed between the pages of each copy of an issue of
a magazine. |
| Mail-in self
liquidator: |
the consumer has to write
away for the article offered on the pack, enclosing the
necessary money and usually a specified number of packet
tops or labels. (This is the commonest form of self-liquidator.) |
| On-pack coupon: |
a coupon banded to or forming
part of the packaging which offers the consumer a price
reduction on her next purchase of the product. |
| On-pack premium: |
the gift is banded to the
outside of the procuct or its packet e.g. a table mat
attached to a packet of detergent. |
| Off-pack: |
See with-pack. |
| Personality promotion: |
a well-advertised personality
calls on households, and rewards in cash or in kind those
housewives having the product (or products) in the house
at the time of the call. |
| Point-of-sale
promotion: |
display of the premium on
offer or announcement of price reduction at the retail
outlet.. |
| Premium: |
generally, any item of merchandise
offered by a company to its consumers, retailers, wholesalers
or salesmen. Specifically, it can be any product offered
with another product, usually conditional on purchase
of that product. |
| Promotion: |
a marketing device that temporarily
improves the value/price relationship of a product to
generate mainly short-term demand from either the end
consumer, the distribution-chain or both. |
| Sampling: |
some of the product is distributed
free to consumers. |
| Self-liquidator: |
any premium where the cash
required from the applicant covers the cost of the premium,
the handling charges and the postage. The cost is below
(usually far below) the normal retail price of the premium. |
| Sponsorship: |
financial support is given
to activities or events. These generally tend to be sporting
events. |
| Weight: |
a term used to indicate the
effectiveness of a promotion in obtaining volume sales. |
| With-pack premium: |
the gift is taken by or given
to the consumer at the moment of purchase but the gift
is not attached to the product in any way e.g. a mixing-bowl
given away with a packet of detergent. |
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SSC&B-Lintas International Advertising network
First Issued: May 1973. Reissued: January 1976
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