Answers to basic, and not-so-basic,
consumer promotion questions. |
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What is Consumer Promotion?
A consumer promotion is a short-term incentive
targeted directly at consumers and includes
coupons, rebates, free offers, patronage rewards
and others. Consumer promotions can be considered
as “pull” promotions in that they
directly entice the consumer to purchase the
product, thereby pulling the brand through
the channel. Trade promotions can be considered
as “push” promotions in that they
provide incentives for the retailer to offer
special deals and push the product through
the channel.1
Why is it
done?
Consumer promotions are normally offered in
conjunction with other forms of advertising
as an incentive, or trigger, to purchase. Marketers
have found that by creating an attractive value
equation that includes a temporary price reduction,
advertising becomes more effective resulting
in increased sales volume.
Who does it?
Most companies selling retail goods and services
participate in some form of consumer promotions.
From grocery coupons to in-store rebates for
personal electronics items, consumer promotions
are a prevalent marketing tactic.
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What
are the different types of coupons?
Coupons take many shapes and forms and can
be delivered through a number of different
channels. Most prevalent are coupons delivered
in Free Standing Inserts (FSIs) via the Sunday
newspaper. The following is a list of the most
popular types of coupons in Consumer Packaged
Goods marketing:
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FSI - coupons
delivered in the Sunday newspaper |
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Direct Mail
- coupons delivered directly to consumers
via US mail |
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Magazine -
either on-page or tipped-in card |
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Newspaper -
printed on a newspaper page |
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Direct Home
Delivery - door hanger, leaflet or Poly
bag |
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Instant Redeemable
- attached to the packaging of a consumer
product |
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Electronic
Checkout - printed and delivered upon purchase |
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Handout -
hand-delivered to consumer at retail or
sampling location |
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On-Shelf -
most often either from a dispenser or tear-off
pad |
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On-Pack - printed
on the packaging of a consumer product |
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Internet -
downloaded by consumer from manufacturer
or coupon vendor sites |
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Electronic
Kiosk - printed at retail location |
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How
many coupons are there?
According to the Marx FSI Trends Report there
were 251 billion FSI coupons distributed in
2004. FSI coupons account for approximately
82% of all coupons distributed.2
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What
is an FSI?
Free-Standing Inserts (FSIs) are four-color,
multi-page booklets featuring coupons, refunds,
sweepstakes and other promotional advertising
distributed in Sunday newspapers.
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Why
should I track coupon activity?
Consumer packaged goods manufacturers spend
hundreds of millions of dollars each year in
distributing and redeeming promotional coupon
offers. The latest competitive coupon information
can provide a clear picture of which direction
a brand or manufacturer is going in regards
to price, position and creative themes. Tracking
competitive coupon activity is one of the most
effective methods for unlocking competitive
marketing strategies.
What are
the key measures in coupon tracking?
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Coupon distribution
- the number of coupons issued by a brand
or manufacturer for a given date or across
a broad time range. Provides a baseline
view of coupon activity. |
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Coupon share
of voice - the percent of total coupons
distributed by a brand or manufacturer
within a particular product category. This
measure allows for competitive comparisons
in size of couponing effort. |
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Coupon expenditures
- the amount of marketing dollars a brand
or manufacturer will spend on promoting
its item through coupons, taking into account
media placement, distribution and redemption
costs. |
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What
questions can be answered by tracking coupon
activity?
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Are my competitors
couponing? |
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Where are my
competitors couponing? |
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How are my
competitors couponing: |
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What are their
average coupon values and purchase requirements? |
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How do they
vary strategy by market? |
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Do they partner
with retailers? |
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Do they use
coupons to introduce new items or extensions? |
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How much are
my competitors spending on couponing? |
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What are the
trends for categories in which my brands
compete? |
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