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Promotional Techniques

 

I 1970'erne arbejdede SSC&B-Lintas med en ret omfattende systematisk oversigt over promotions og definitioner af promotionaktiviteter. Nogle af aktiviteterne er ikke tilladte i markedsføringen i Danmark, nogle vil blive tilladte i kraft af den stigende harmonisering i EU. Men med sin systematik og bredde kan rapporten være inspirerende i udvikling af relevante promotions.

 
AN OUTLINE OF PROMOTIONAL TECHNIQUES AND
GLOSSARY OF TERMS
 

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:

A
To obtain good point of sale display  
B
To obtain volume sales to the trade  
C
To obtain volume consumer sales  
D
To encourage trial purchase  
E
To encourage re-trial  
F
To encourage multiple purchase  

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:

(a)
Heavyweight  
(i)
Reduced price offers  
(ii)
On pack premiums  
(iii)
Extra product free  
   
(b)
Mediumweight  
(i)
Free mail-in premiums  
(ii)
Couponing  
(iii)
Cross-couponing  
(iv)
Money back offers  
   
(c)
Lightweight  
(i)
Self-liquidating premiums  
(ii)
Competitions  

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.

  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.
  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).
  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.
  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.

  GLOSSARY OF TERMS USED IN SALES PROMOTIONS  
  Appendix to " An Outline of Promotional Techniques"  
These are the most regularly used terms ......
 
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.
 

SSC&B-Lintas International Advertising network
First Issued: May 1973. Reissued: January 1976

 
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