Category: Sales Promotion

Dr. Pepper went out on a limb earlier this year by promising everyone in the U.S. a free can of soda if heavy metal rockers Guns N’ Roses released a new studio album. Since the band has been quiet for 17 years, it seemed like a reasonable possibility that it would not have to pay off on the promise.

Now, it appears that free Dr. Pepper for all is just ahead. The band is scheduled to release a studio album, “Chinese Democracy,” on November 23. Assuming the release occurs as scheduled, Dr. Pepper plans to make available one free can of product per person to anyone who comes to the Dr. Pepper web site and registers for a coupon on November 23.

Will this promotion go down as one of the most expensive in the history of marketing? If all 300 million or so people in the U.S. took advantage of the offer, one estimate is that the promotion would cost Dr. Pepper $165 million dollars. Of course, not everyone has the desire or the means to log on to request a free soda on November 23. So, regardless of the final cost of the promotion, it is likely that Dr. Pepper will enjoy brand publicity that will be much more valuable than the cost of the sales promotion. As long as GNR does not do anything to embarrass Dr. Pepper, this promotion should be a PR success for both the band and Dr. Pepper.

Link: AdAge.com – “Free Dr. Pepper for All as Guns N’ Roses Album Release is Set”

Consumers’ desire to find value has intensified in recent months because of rising prices for everyday purchases. A marketer’s solution to meet the need for greater value? The time-tested approach of offering coupons. Using coupons as a purchase incentive is a way to add value yet not have to lower prices across the board. Only those persons who perceive the effort required to obtain coupons will use them. Also, in theory a coupon stimulates a purchase that could lead to repeat purchases in the future without a coupon offer.

A recent study by Prospectiv found that coupons are being sought frequently by consumers today. More than 70% of the people surveyed indicated they are using coupons more than they did six months ago. A finding that should be of interest to retailers is that 87% said they would be more likely to patronize a retailer that offers coupons. In an environment where many retailers are very similar to their competitors in terms of products offered, prices, and services, it appears that a tactic as simple as offering customers incentives via coupons could lure more traffic to stores.

Couponing provides one hazard that must be closely monitored: too much emphasis on coupon offers could create a trap in which customers become conditioned to make purchases only when there is an incentive. This situation hurts profitability and creates less predictable demand. The ideal is to build a brand on the benefits it delivers so that price is not a major criterion in the buying decision. That ideal must be balanced with the reality that consumers are pinched financially and may view a coupon as a reward or benefit of their patronage. The desire for incentives makes the use of loyalty programs more important as they can be designed to keep customers coming back to you, not your competitors!

Link: Brandweek.com – “Majority of Consumers Using More Coupons”

The benefits of coupons are enjoyed by marketers and consumers alike. Manufacturers and retailers are inclined to offer coupons because they provide an immediate call to action for consumers. Moreover, the ability to measure the effectiveness of a coupon offer creates accountability for marketing expenditures that is often lacking in mass media advertising. Also, it is a way to encourage trial of a new product by reducing the cost of making a first-time purchase. Consumers benefit from the reduced price contained in a coupon offer. Another benefit of coupons for consumers is that they provide much needed relief during a time when costs for many purchases are rising.

These factors are among the influences in the greater use of coupons delivered via the Internet. A recent survey commissioned by Coupons, Inc. found that among people who use printable coupons delivered online, the Internet was the number one source of coupons. For this audience, a larger percentage of them use web coupons than coupons delivered through newspapers.

While the Sunday newspaper still newspaper is still the number one source of coupons among all consumers, the Internet is growing in importance. This trend will likely continue going forward if consumers utilize search engines more frequently to search for coupons. It will be in marketers’ best interests to step up their coupon offerings delivered online as price-conscious consumers look to save money any way they can. This prescription applies not only to consumer packaged goods giants and national restaurant chains, but it has just as much relevant to businesses with a single geographic market, too.

Link: eMarketer Daily – “Economy Gives Web Coupons a Boost”

Coupons are a staple promotion tactic for consumer packaged good marketers and retailers. Despite a seemingly miserable redemption rate of between 1-2%, coupons are important because they provide consumers an incentive to purchase a product. Hopefully, the purchase made with a coupon will lead to future purchases made without a coupon. Couponing has become more challenging as a prime distribution method, free standing inserts (FSIs) in newspapers, have been hurt by declining readerships. Online coupons have yet to catch on a broad scale. However, that might change if a new online coupon distribution method gains traction.

A service from Coupons, Inc. called Brandcaster will serve coupons contextually on web sites. For example, a magazine article that discusses different varieties of coffee could include a link to a coupon for Folgers or some other brand of coffee. This approach to online coupons seems to be a more effective way to reach consumers than coupon destination web sites like coolsavings.com or coupons.com. Consumers are looking for ways to trim their rising grocery bills, so the timing of the Brandcaster service is good. And, the linkage of coupons to web content that is of interest to the reader makes targeting of coupons more effective than can be achieved in FSIs.

Link: DMNews – “General Mills Others Try Contextual Online Coupons”