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Coupons can enhance brand awareness cost-effectively and provide flexibility and convenience in delivering the promotion quickly. Almost 80% of all households and over 2,000 manufacturers use coupons. Coupon distribution rose from 179.8 billion in 1985 to 202.6 billion in 1986, with packaged goods manufacturers increasing usage 13%. Redemption rate remained flat at 3.6%. Misredemption of coupons is estimated at 10%-15%. Coupons are distributed through freestanding inserts (FSI), print advertising, direct mail, and in stores. Determination of the proper vehicle to use should consider: 1. strategy and objective, 2. cost redemption, 3. availability, 4. circulation, and 5. exclusivity. FSIs carried 68% of all coupons in 1986, compared with 59.9% in 1985. Electronic coupon dispensers are being tested in an effort to find a better way to reach specific consumers. Computerized price reductions for in-store promotions may eliminate physical coupons. Rebates and refunds have gained popularity over cents-off coupons. Cross refunds/rebates among producers are increasing in usage.
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