Assume that you work in the marketing department for a company ...

[eruditmonkey@yahoo.com]

Assume that you work in the marketing department for a company that manufactures dog food. Explain why you think the use of coupons would be effective and what can be done to maximize the redemption rate.

Question 2

There are three basic ways by which companies can add value to their offerings: innovating, altering consumer perceptions, and lowering price.
 a. True
  b. False
 Indicate whether the statement is true or false

[manuelcastillo]

Answer to Question 1

As can be seen in Table 19.1, several different types of coupons are able to generate trial purchases as well as encourage repeat purchases. Coupons can be delivered through newspapers, magazines, freestanding inserts, direct mail, in- or on-packages, online, and at the point of purchase by package, shelf, and electronic delivery devices, and all have differing redemption rates. Even though FSIs account for the majority of all coupons distributed in the United States, but these generate an average redemption level of approximately 0.5 percent. The average redemption rate for instant coupons is about 24 percent. Direct-mail coupons achieve the highest household penetration as well as the highest redemption rate (4.4 percent) of all mass-delivered coupons techniques. In- and on-pack coupons have higher redemption rates because most of the package-delivered coupons are received by brand users, so this method is effective if the objective is to encourage repeat purchases. Finally, one study found that redemption rate was higher for a lower face value coupon than for a higher one (i.e., 40-cents versus 75 cents), presumably because the higher face value coupon signaled higher prices to consumers.

Answer to Question 2

False