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1、Types of Consumer-Oriented hence, the total cost is $9 million. Step 2:Calculate the profit per unit by determining the average number of annual uses of the product and multiplying this by the per-unit profit. Assume, for example, that on average six units of the sampled product are purchased per ye
2、ar and that the profit per unit is $1. Thus, each user promises the company a profit potential of $6 when they become users of the sampled brand. Step 3:Calculate the number of converters needed for the sampling program to break even. (Converters are individuals who after sampling a brand become use
3、rs.) Given the cost of the sampling program ($9 million) and the profit potential per user ($6), the number of conversions needed in this case to break even is 1,500,000 (i.e., $9 million divided by $6). This number represents a 10 percent conversion rate just to break even (i.e., 1,500,000 divided
4、by 15,000,000). Step 4:Determine the effectiveness of the sampling. For a sampling to be successful, the conversion rate must exceed the break-even rate with gains in the 10 to 16 percent range. In this case, this would mean a minimum of 1,650,000 people must become users after trying the sampled br
5、and (i.e., 1,500,000 times 1.1) to justify the sampling cost and yield a reasonable profit from the sampling investment., 2010 South-Western, a part of Cengage Learning. All rights reserved.,1622,When Should Sampling Be Used?,When the new or improved brand is demonstrably superior or has distinct re
6、lative advantages When an innovative product concept is difficult to communicate by advertising alone When promotional budgets can afford to generate consumer trial quickly, 2010 South-Western, a part of Cengage Learning. All rights reserved.,1623,Sampling Challenges and Problems,Expensive to implem
7、ent Mishandling of mailing by distributors Distribution to the wrong market In- or on-package samples fail to capture current non-consumers Distribution does not reach sufficient numbers of consumers to justify its expense Misuse of samples by customers Subject to mail pilferage,Couponing,A promotio
8、nal device that rewards consumers for purchasing the coupon-offering brand by providing money-off savings - Also known as VOUCHERS -, 2010 South-Western, a part of Cengage Learning. All rights reserved.,1625,Illustration of Money-Off Coupon Offers,Figure 16.2, 2010 South-Western, a part of Cengage L
9、earning. All rights reserved.,1626,Coupon Distribution Methods,Freestanding Inserts (FSIs) Handouts in stores Direct Mail Magazines Newspapers In- and On-Package Internet http:/www.latestdiscountvouchers.co.uk/, 2010 South-Western, a part of Cengage Learning. All rights reserved.,1627,Full Coupon Co
10、st,Table 16.3,Face value$1.00 Distribution and postage cost0.40 Handling charge0.08 Consumer fraud (misredemption) cost0.07 Internal preparation and processing cost0.02 Redemption cost0.02 Total Cost$1.59, 2010 South-Western, a part of Cengage Learning. All rights reserved.,1628,Couponing (contd),Is
11、 Couponing Profitable? Most coupons are redeemed by current brand users Households most likely to redeem coupons are also the most likely to buy the brand in the first place Companies have to offer coupons to prevent losing consumers to other brands that do offer coupons, 2010 South-Western, a part
12、of Cengage Learning. All rights reserved.,1629,Point-of-Purchase Couponing, 2010 South-Western, a part of Cengage Learning. All rights reserved.,1630,Mail- and Media-Delivered Coupons, 2010 South-Western, a part of Cengage Learning. All rights reserved.,1631,In- and On-Pack Coupons,Are Included eith
13、er in or on the products package Cannot be removed at the point of purchase; its for next purchase May use a coupon to promote one brand by another brand (crossruffing) Have bounce-back value Have no distribution costs Have higher redemption rates Offer delayed value to consumers Dont reach nonusers
14、 of the carrying brand, 2010 South-Western, a part of Cengage Learning. All rights reserved.,1632,Online Couponing,Are distributed by many Internet sites Allows consumers to print their own coupons, at no additional cost to the advertiser Has potential for fraud in that criminals can alter their pri
15、nted coupons Can be distributed through consumers telephone (wireless connection), 2010 South-Western, a part of Cengage Learning. All rights reserved.,1633,Coupon Redemption and Misredemption Process,Figure 16.3, 2010 South-Western, a part of Cengage Learning. All rights reserved.,1634,Misredemptio
16、n,Consequences of Misredemption The 3 to 4 percent misredemption rate represents millions in losses by manufacturers Participants in Misredemption Consumers Clerks Store management Shady clearinghouses Professional misredeemers, 2010 South-Western, a part of Cengage Learning. All rights reserved.,1635,The Role of Promotion Agencies,Specialized Promotion Agencies Work with brand managers to formulate promotion strategies and implement tactical programmes. http:/www.atommarketing.co.uk/index.h
