MKTG 479 - Chapter 11 Managing Incentives

Given to Company Employees

- Bonuses - Rewards - Contests

Given to Customers

- Coupons - Rebates - Sweepstakes - Volume Discount - Loyalty Programs - Premiums - Contests

Given to Collaborators

- Price-cut - Volume Discount - Co-Op Advertising - Allowances

Customer Incentives

Can be offered by either manufacturer (manufacturer incentives) or channel member (retailer incentives) Based on type of reward, can be divided into two types: 1. Monetary - reduce cost - Coupons - Rebates - Price Reductions - Volume Discounts 2. Non-Monetary - enhance value - Premiums - Prizes - Contests, sweepstakes, games - Loyalty programs THREE Primary GOALS: 1. Manage Purchase Timing 2. Optimize value of offering for different segments 3. Responding to competitor's offering/promotion

Incentives

Meant to increase value of offering by providing additional benefits/reducing costs Monetary: - Volume Discounts - Price Reductions - Coupons - Rebates Non-Monetary: - Premiums - Contests - Rewards

Company Incentives

Offer incentives motivate and reward personnel Commonly involve rewards for employees who meet certain performance benchmarks "If you take care of your employees, your employees will take care of your customers, and your customers will take care of your shareholders" Perhaps the most important - Contests - Monetary bonuses - Recognition and Awards - Free/Discounted goods and services - Travel incentives - Sweepstakes - Games/Prizes

Collaborator Incentives

Offered to members of distribution channel also called trade incentives—can have multiple objectives: - Gaining distribution through particular channel - Encouraging channel members stick offering at certain inventory levels - Encouraging channel members promote company's offering Monetary - Slotting allowance/Stocking allowance - Cooperative advertising allowance - Spiff - Volume discount - Inventory financing/floor planning Non-monetary - Contests - Bonus merchandise - Buyback guarantee - Sales support and training