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Belch: Advertising and
Promotion, Sixth Edition
V. Developing the
Integrated Marketing
Communications Program
16. Sales Promotion © The McGraw−Hill
Companies, 2003
offers Western wear, outdoor items, and other types of Marlboro gear through its Marlboro
Country catalog, which reinforces the cigarette brand’s positioning theme.
Self-liquidating premium offers have the same basic limitation as mail-in premiums:
a very low redemption rate. Fewer than 10 percent of U.S. households have ever
sent for a premium, and fewer than 1 percent of self-liquidating offers are actually
redeemed. 40 Low redemption rates can leave the marketer with a large supply of items
with a logo or some other brand identification that makes them hard to dispose of.
Thus, it is important to test consumers’ reaction to a premium incentive and determine
whether they perceive the offer as a value. Another option is to use premiums with no
brand identification, but that detracts from their consumer franchise-building value.
Contests and Sweepstakes
Contests and sweepstakes are an increasingly popular consumer-oriented promotion.
Marketers spent nearly $2 billion on these promotions in 2001. These promotions
seem to have an appeal and glamour that tools like cents-off coupons lack. Contests
and sweepstakes are exciting because, as one expert has noted, many consumers have
a “pot of gold at the end of the rainbow mentality” and think they can win the big
prizes being offered. 41 The lure of sweepstakes and promotions has also been influenced
by the “instant-millionaire syndrome” that has derived from huge cash prizes
given by many state lotteries in recent years. Marketers are attracted to contests and
sweepstakes as a way of generating attention and interest among a large number of
consumers.
There are differences between contests and sweepstakes. A contest is a promotion
where consumers compete for prizes or money on the basis of skills or ability. The
company determines winners by judging the entries or ascertaining which entry comes
closest to some predetermined criteria (e.g., picking the winning teams and total number
of points in the Super Bowl or NCAA basketball tournament). Contests usually
provide a purchase incentive by requiring a proof of purchase to enter or an entry form
that is available from a dealer or advertisement. Some contests require consumers to
read an ad or package or visit a store display to gather information needed to enter.
Marketers must be careful not to make their contests too difficult to enter, as doing so
might discourage participation among key prospects in the target audience.
A sweepstakes is a promotion where winners are determined purely by chance; it
cannot require a proof of purchase as a condition for entry. Entrants need only submit
their names for the prize drawing. While there is often an official entry form, handwritten
entries must also be permitted. One form of sweepstakes is a game, which also
has a chance element or odds of winning. Scratch-off cards with instant winners are a
popular promotional tool. Some games occur over a longer period and require more
involvement by consumers. Promotions where consumers must collect game pieces
are popular among retailers and fast-food chains as a way to build store traffic and
repeat purchases.
Because they are easier to enter, sweepstakes attract more entries than contests.
They are also easier and less expensive to administer, since every entry does not have
to be checked or judged. Choosing the winning entry in a sweepstakes requires only
the random selection of a winner from the pool of entries or generation of a number to
match those held by sweepstakes entrants. Experts note that the costs of mounting a
sweepstakes are also very predictable. Companies can buy insurance to indemnify
them and protect against the expense of awarding a big prize. In general, sweepstakes
present marketers with a fixed cost, which is a major advantage when budgeting for a
promotion.
Contests and sweepstakes can get the consumer involved with a brand by making
the promotion product relevant. For example, contests that ask consumers to suggest a
name for a product or to submit recipes that use the brand can increase involvement
levels. Nabisco developed an “Open a box, make up a snack,” promotional contest for
its three top cracker brands—Ritz, Triscuit, and Wheat Thins. Consumers sent in their
favorite recipes, which were then made available on a dedicated website and at a tollfree
number. Marketers can use contests and sweepstakes to build brand equity by
connecting the prizes to the lifestyle, needs, or interests of the target audience.
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Chapter Sixteen Sales Promotion