Page 537 - Foundations of Marketing

504 Part 6 | Promotion Decisions

stimulate consumer loyalty. Consumers appear to prefer premiums to discounts on prod-
44
ucts due to the perception that they are receiving something “free.” Creativity is essen-
tial when using premiums; to stand out and achieve a significant number of redemptions,
the premium must match both the target audience and the brand’s image. Premiums must
also be easily recognizable and desirable. Consumers are more favorable toward a premium
when the brand has high equity and there is a good fit between the product and the pre-
45
mium. Premiums are placed on or inside packages and can also be distributed by retailers
or through the mail. Examples include a service station giving a free car wash with a fill-up,
a free shaving cream with the purchase of a razor, and a free plastic storage box with the
purchase of Kraft Cheese Singles.

Consumer Contests, Consumer Games, and Sweepstakes

In consumer contests , individuals compete for prizes based on their analytical or creative
skills. This method can be used to generate retail traffic and frequency of exposure to promo-
consumer contests Sales tional messages. Contestants are usually more highly involved in consumer contests than in
promotion methods in which games or sweepstakes, even though total participation may be lower. Contests may also be
individuals compete for prizes used in conjunction with other sales promotional methods, such as coupons. Frito-Lay cre-
based on their analytical or ated a contest where consumers can submit recommendations for new chip flavors through
creative skills 46
Facebook. The winner received $ 1 million, while two runners-up received $ 500,000 .
consumer games Sales In consumer games , individuals compete for prizes based primarily on chance—often by
promotion methods in which collecting game pieces like bottle caps or a sticker on a carton of French fries. Because collect-
individuals compete for prizes
based primarily on chance ing multiple pieces may be necessary to win or increase an individual’s chances of winning,
the game stimulates repeated business. Development and management of consumer games is
consumer sweepstakes A often outsourced to an independent public relations firm, which can help marketers navigate
sales promotion in which
entrants submit their names for federal and state laws that regulate games. Although games may stimulate sales temporarily,
inclusion in a drawing for prizes there is no evidence to suggest that they affect a company’s long-term sales.
Entrants in a consumer sweepstakes submit their names for inclusion in a drawing for
trade sales promotion
prizes. The Travel Channel awarded one Grand Prize Winner a trip for two to Cape Town,
methods Methods intended 47
to persuade wholesalers and South Africa, that included first-class hotel accommodations. Sweepstakes are employed
retailers to carry a producer’s more often than consumer contests and tend to attract a greater number of participants.
products and market them However, contestants are usually more involved in consumer contests and games than in
aggressively sweepstakes, even though total participation may be lower. Contests, games, and sweepstakes
may be used in conjunction with other sales promotion
methods like coupons.

Trade Sales Promotion

Methods
To encourage resellers, especially retailers, to carry their
products and promote them effectively, producers use trade
sales promotion methods. Trade sales promotion meth-
ods attempt to persuade wholesalers and retailers to carry
a producer’s products and market them more aggressively.
© AP Images/PRNewsFoto/NIVEA ing countering the effect of lower-priced store brands, passing
Marketers use trade sales methods for many reasons, includ-

along a discount to a price-sensitive market segment, boost-
ing brand exposure among target consumers, or providing
additional incentives to move excess inventory or counter-

buy-back allowances, scan-back allowances, merchandise
allowances, cooperative advertising, dealer listings, free
Sweepstakes act competitors. These methods include buying allowances,
NIVEA Facebook fans had the chance to enter into a consumer merchandise, dealer loaders, premium or push money, and
sweepstakes to win tickets to a live Rihanna concert. sales contests.

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