By: William Kestin - CEO APPA - (Australasian Promotional Products Association)
Vice President IFPPA - (International Federation of Promotional Products Associations)
The strategy to buy a service or product by using trade loaders or a gift with purchase dates back to the very dawn of marketing itself. It's a concept that still works today. Walk down any Coles aisle, drop by any fast-food restaurant, or thumb though any Sunday advertising supplement and you'll find that gift-with-purchase strategies are still providing marketers with sound, profitable business opportunities.
Trade loaders are still being used to promote better placement on the shelves or entice sales people to promote retail lines more rigorously. Sometimes the gifts are substantial (as in plasma televisions and Ipods). But most are associated more strategically in line with the product being promoted, like a cosmetic bag linked to a new range of make-up.
PLANNING YOUR PROGRAM
Here are some of the important issues to consider when planning your gift-with-purchase or trade loader promotion:
The cost of the gift can range from a few cents to hundreds of dollars. Perhaps more important is the cost versus the perceived value of the gift. Branded products often have a higher perceived value than non-brand products but obviously cost more money.
Other cost considerations include:
Keep in mind that the costs should be balanced against your expected return on investment for the promotion. This calculation should include a factor for repeat business that might be generated as a result of the promotional product.
With an advent of the internet, promotions (or their redemptions) can be run on line. Pepsi has done this effectively by driving business to their website to register to win gifts. Some promotional companies can design temporary websites for these types of promotions. It is important to consider that the additional step in the process may limit some redemption, but it can provide some immediate, traceable data on campaigns.
If you're a manufacturer, look for ways to share the costs of the program with retailers and vice-versa. There may also be some opportunities for additional promotional tie-ins to offset costs (for instance co-sponsorship with other organisations).
Another option is to cut back on advertising by running only print ads or by investing primarily with in-store advertising and point-of-purchase materials. If the gift promotion is an unusual one, there may be some opportunities for generating publicity in the media. But beware of too many cutbacks; they may jeopardize the impact of the program.
CHOOSING A GIFT-WITH-PURCHASE OR TRADE LOADER
Choosing the right promotional product to include with your offer is perhaps the most important issue connected with this type of program.
Questions that you should be asking your promotional product provider:
VARIATIONS AND ALTERNATIVES
Companies with a limited promotion budget may consider similar, but less expensive, approaches. To keep costs down, companies often use these other value-added types of promotions:
Self-liquidators. Instead of an outright gift, the company offers consumers an item at a substantially reduced price, recovering some, or all, of the costs.
Sweepstakes. Purchasers are entered into a draw with the possibility of winning prizes. Make sure the promotional product company, provides the legal requirements for documentation of registration in each state before running this type of promotion (They must be paid for and registered separately in every state of Australia where the draw is being entered).
Continuity programs. The gift is offered for a specified number of repeat purchases or store visits to build customer loyalty and repeat business.
Gift coupons. The "gift" can be a dollars-off coupon for a product with a high perceived retail value. These types of coupons are not a good option. Once they are redeemed the recipient often forgets they received value for the purchase. Also, "Experience" based promotions (balloon rides or discount movie/theme park vouchers) should be avoided as they are often not redeemed, or when they are, you have lost any long term value. Actual gifts with purchase last longer and will keep brand retention longer.
PACKAGING AND MERCHANDISING
Most consumer purchase decisions are made at the point of sale. That makes packaging and merchandising critical to the success of most gift-with-purchase promotions.
Effective execution can make the difference between mediocre and spectacular results. This includes obtaining extra shelf or display space. It is important to explore the design capabilities of your promotional product provider, thus bi-passing the expense of an outside ad agency or tapping into your own resources. Many promotional product professionals are used to working with style guides and will many times provide design at little cost, if any.
In-pack/on-pack gift promotions. The gift itself can be included inside the package. In-pack gifts need to be specially promoted on the product packaging to draw attention to the offer. On-pack gifts always require special packaging, packaging equipment and potentially special handling in stores. That could add significantly to the cost of a program.
Container promotions. In some cases, the packaging itself is the gift. Jam companies sometimes sell their product in packaging that can be reused as everyday glassware. Such brands as Milo occasionally offer product packaging that is designed to be saved as collectibles. Be sure to financially budget in all tooling and design registration costs.
APPEAL AND OVERKILL
Gift-with-purchase offers can give less-than-anticipated results if the gift fails to appeal to the target audience or offers a low perceived value in relation to the cost of the product.
Some gift promotions, such as McDonald's Happy Meals, seem destined to go on forever. But be aware that it is possible to overuse gift-with-purchase. If a program goes on too long, consumers may come to expect a free gift and become annoyed when the program is concluded. Consumers might also respond negatively if the gift is not perceived as being as valuable as a previous gift offer. Predictable schedules for a company's gift promotions may "train" consumers to time their purchases only when a promotion is on.
APPA (The Australasian Promotional Product Association) is the only professional trade association specifically for the promotional products and promotional marketing industry.
APPA includes the regions of Australia, New Zealand, New Caledonia, Vanuatu and Taiwan and are the top promotional product professionals in the region.
APPA members are on the cutting edge of the promotional industry due to ongoing education programs, trade shows and pricing benefits.
Allow an APPA member to get involved with marketing departments early in the process and offer what we call the "Product Perspective" to the marketing mix. If correctly utilised, this perspective can save your company thousands of dollars.
The true power of promotional products is not the product. It's the response elicited by the correct delivery of that product in a properly constructed promotional campaign.
Total Promotional Product Sales:
Copyright © 2006/Written by William Kestin (CEO APPA)
Published in Marketing Magazine August 2006
If you have any questions relating to promotional products,, please don't hesitate in contacting us. JEM Promotional Products
Phone: (02) 8205 1334
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