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Consumer packaged goods manufacturers spend approximately 50% of their total advertising/promotion budget on trade promotions, 26% on advertising and 24% on consumer promotions. The goal is to determine the optimal allocation in order to maximize their return on their promotional investment. They must evaluate what drives their sales from a consumer’s perspective.

With regards to trade promotions, an Anderson Consulting Study indicated that 51% of consumers were unaware that items purchased were on sale and therefore had no impact on the purchasing decision. Of the 49% that were aware of the sale, 40% said they would have purchased the item anyway. Manufacturer’s estimate that only 50% of trade dollars are passed on to the consumer according to an A.C. Nielsen study.

Consumer promotions, specifically coupons are difficult to evaluate their return on investment due to limitations of the marketing mix models used to evaluate the effects of coupons. These models are limited to aggregate level analysis of retail scanner data according to Frank Mulhern, Ph.D. Northwestern University.

A Promotions Decision Study indicated that trade promotions produced only 16% of total volume, while consumer promotions (coupons) account for 24%. Their test revealed that 42% of total volume was purchased with an incentive (16% trade, 24% coupon and 2% trade and coupon combined) and 58% was purchased at full price.

The study concluded that much of the 15% of trade volume from current buyers would have been made without a trade deal. New and current users are equally motivated by coupons, therefore, coupons discounts can motivate buyers to try a new brand. Previous PDI research indicated that on average, 53% of FSI coupon redemption’s were generated by new or lapsed users of the product. The characteristics of a coupon, where a consumer must collect and present the coupon at time of purchase supports Mediamark Research that 38.03 percent of consumers use coupons in their purchasing decisions.

Brand switchers are 75% more likely to use coupons than trade promotions when making purchases and 53% more volume is generated by current buyers with coupons than with a trade promotion.

The 24% of volume generated by coupons is equivalent to the funds budgeted (24%), while trade promotions provides 16% of volume relative to the funds budgeted (50%). All methods (trade, consumer promotions and advertising) generate 35% to 40% of repeat purchases by First Repeat New Buyers and approximately 64% of repeat purchases by First Repeat Existing Buyers. New buyers are more likely to purchase with a discount where the perceived risk of purchase is lower. On average, 53% of FSI coupon redemption’s were generated by new or lapsed users, thereby motivating buyers to try a product.

From a retailer’s perspective, coupon shoppers are purchasing at full margin. Coupons impact new, current, loyal and switching consumers and helps build brands. Manufacturers must allocate spending to all three areas of advertising, trade and consumer promotions.

In the last five years, the 50 largest consumer packaged goods manufacturers have averaged 11 percent annual profit growth with an average annual increase in sales of less than 5 percent. The slow growth that CPG manufacturers as well as retailers have posted is primarily due to consolidations and cost-cutting efforts. Growth for CPG marketers and retailers needs to come from increasing marketing return on investment (ROI). That means retailers and manufacturers must have a disciplined, consumer marketing process that achieves marketing ROI consistently. They must commit to a marketing strategy which provides a framework for every activity that affects the brands or retailer’s relationship with the consumer.

Retailers must integrate primary and secondary data sources that define their customers and create a single-source platform for target development. To obtain a high ROI, marketing starts with consumer targeting. Advances in data collection and integration will provide the capability to plan, execute and evaluate marketing efforts on a targeted basis.

The starting point for all marketing decisions is for marketing, merchandising, media and category management to make decisions jointly instead of planning on separate bases. Improving marketing ROI requires that the packaged goods industry realign its consumer mix allocation. Manufacturers and retailers must allocate promotional spending according to how target consumers respond to different types of promotions.

Finally, the industry must analyze ROI by consumer target by measuring the effective increase in coupon redemption among targeted groups at retail and determine what volume and share increases were gained versus the investment. This evaluation will result in the creation of new action plans for improving product and brand performance.

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    HOW TO USE FREE-STANDING INSERTS AS A PROMOTIONAL TOOL

Packaged goods manufacturers are forced to make tough choices regarding the promotional tools they use and how they use them. Once viewed as a mass vehicle, the Free-Standing-Insert (FSI) is now capable of meeting more targeted needs. By gathering actionable data, targeting decisions can be simplified, and promotional dollars can be used to their fullest. The targeting process begins with segmentation, or the process of dividing the population using specific criteria. The three main segmentation alternatives are demographic (characteristics of the population), psychographics' (consumer lifestyle profiles), or geodemographic (depicts where customers-or people like them-live). Once an approach is determined, various resources can be used to apply the segmentation process to a brand's market list.

There are many different ways by which you can break down your market list, including the following:

The components and characteristics of a Free-Standing Insert that impact redemption rates significantly include face value, expiration period, clear and simple offers, coupon size and layout. If you review your historical redemption data, you will likely find that as you lower the face value of the coupon or increase the purchase requirements, you will reach a point where the redemption rate significantly declines. You should be conscious of the "outer limits" of your coupon's face value or purchase requirements. Your brand advertising should use a headline that is well established and systematically run to generate higher redemption rates. It should be simple, clear and highlight the benefits of the product.

Over an extended period, a coupon with two time-releases (i.e. one month and three month expiration dates) will redeem significantly higher than a solo coupon with either a one month or three month expiration date. Coupons offering "One Free with multiple purchases" will redeem higher than a dollar value "Cents-off on multiple purchases even if the face value is the same as the value of the "Free" offer. It should be noted that if the free offer is more generalized, the redemption rate will be lower than a "Free" offer that is clearly defined.

Larger coupons redeem significantly better than smaller coupons, especially if the coupon is not cluttered. In a test of dual coupons, the $1.00/2 and 50¢/1 redeemed higher, collectively than the $1.25/2 and 50¢/1coupon. While the $1.00/2 redeemed less than the $1.25/2 coupon, it's 50¢ coupon redeemed significantly higher than the $1.25/2 counterpart 50¢ coupon.

Combined with a market leader, a weaker brand's coupon redemption will be higher than by itself. Where possible, take advantage of a strong related brand to strengthen a weaker brand. If you are sharing a page, redemptions are considerably stronger, collectively, on a horizontal rather than a vertical layout.

The following are variables that can affect the redemption rate of a Free-Standing Insert:

   COUPONING AS A MARKETING STRATEGY

C.W. Post is recognized as the first manufacturer to use coupons. In 1895, he offered a certificate worth one cent toward the purchase of Grape-Nuts and coupons have been used steadily since then. In 1965, the first reports were prepared regarding the distribution of manufacturers' coupons. It was reported that ten billion coupons were distributed in 1965. In 1998, NCH NuWorld Marketing reported that 249 billion coupons were distributed.

The development of a successful couponing program is dependent upon clear goals and objectives as well as an evaluation and careful selection of the promotion vehicle. The size of the customer base, brand loyalty, your brand's market share and product purchase behaviors are some guidelines used by marketers in developing the marketing strategy. Products that have a weekly purchase cycle by a large consumer base are a good fit for FSI's. More than four out of five households use coupons. Coupons can be used to:

No single coupon promotion can accomplish all or even most, of these objectives. It is critical to establish a specific objective for each promotion so that appropriate strategies can be developed to successfully reach that goal. The are basically four types of coupon users:

1. Brand Buyers (Low Usage) - The face value of the coupon is an insignificant factor for them. They overwhelmingly insist that they do not use coupons to try a new product;
2. Persuadable Purchasers (Moderate Usage) - They enjoy a bargain and are likely to buy a product after receiving a sample. They compare prices and calculate the savings from a coupon;
3. Shrewd Shoppers (High Usage) - These are high coupon users who average six to ten coupons a week. They are influenced by the face value of the coupon, but are less likely to try a new product;
4. Compulsive Coupon Users (Very High Usage) - They are willing to try a new product with a high value coupon and have very little brand loyalty. They switch brands within a category if they have a coupon. They stock up on items whether they are needed or not.

Many consumers view coupons as an effective way to reduce their food bills. Shoppers are aware of those retailers who offer double and triple couponing as a marketing strategy.

The costs for distribution of Free-Standing Insert coupons remains relatively low and FSI's provide the following advantages:

The disadvantages of FSI's include:

Electronic couponing is a relatively new but growing vehicle for couponing. The advantages of electronic coupons are that they can be highly targeted, have significantly higher redemption rates, ability to limit coupon distribution and expiration period of the offer. The disadvantages include a higher distribution costs, generally lack color in printing and are redeemable only at the store chain where printed.

Magazines are no longer widely used as a vehicle for coupon distribution. Their advantages include creative flexibility in color and space, targetability, remains in household longer. The disadvantages include low redemption rates over a longer period of time, long lead times and weak merchandising support.

   IN-STORE, ON-PACK AND DIRECT MAIL COUPONS

The in-store environment is the last opportunity in the purchase process. Those marketers who best utilize the in-store tools work. Among these tools, in-store coupons have proven to be among the most effective at influencing consumer purchase behavior. It is easy to understand the emphasis on in-store marketing, and specifically in-store couponing. In the 1950's, over 70% of brand decisions were made OUTSIDE the store. Today, consistent with brand loyalty levels averaging only 24% (according to American Demographic), over 70% of brand decisions are made INSIDE the store.

Following are a few key factors focusing on in-store promotions:

1. Time Pressures. Consumers no longer have adequate time to plan their shopping trip. Stressed for time, they make decisions on the spot. In-store coupons simplify those on-the-spot decisions.

2. Fragmentation. Manufacturers are faced with an assortment of out-of-store media vehicles. Not long ago TV consisted of only 3 important networks, but today consumers can view up to 100 or more cable stations. Additionally, average reach of the top rated prime time shows has dropped significantly since the 70's

3. In-Store Promotions Work. The average primary shopper shops his/her supermarket 2.6 times per week. With shoppers spending 10-15 seconds in front of their preferred categories, the store is a high potential coupon and media delivery location.

4. Focus on Retail Partners. A focus on in-store and account-specific marketing and a growing understanding that the retail environment can make or break a well-devised marketing plan.

It's clear that growth in in-store couponing has been a response to powerful changes in today's consumer lifestyles. In-store is viewed more and more as a common sense approach to targeting consumers.

After all, the store environment itself has changed dramatically over the last 25 years. Today the average supermarket has 18,000 brands vs. 8,000 in the 70's, with 30,000 sku's (stock keeping units) vs. 12,000.1 Supermarkets have gone "mega", with superstores bringing the average space to well over 30,000 square feet. And manufacturers are filling all that space with over 20,000 new items annually. On a weekly basis that translates into 400 new items, so the store never looks the same from one week to the next.

Confused yet? Your consumers definitely are. Importantly, there is a proven opportunity in breaking through this confusion directly where the confusion is, taking place. In-store couponing helps simplify the cluttered, complex and often confusing shopping experience.

Proven for over 100 years, couponing has been and remains a pivotal piece of the marketing mix for hundreds of major consumer packaged goods brands. Couponing really works. Couponing succeeds at persuading consumers to purchase a specific product. But in-store couponing takes couponing to a new level because it combines the persuasive power of a coupon with the relevance and targetability of the in- store environment.

Notable sales-impact results support the use of in-store couponing. In-store couponing can complement an out-of-store couponing and promotion program by reaching a large number of consumers who don't regularly clip coupons. It is this incremental reach that is driving a majority of packaged goods marketers to rely more heavily on in-store couponing as a part of their 'couponing mix." Moreover, the quality of the redemption can be excellent, because in-store coupons capitalize on shopper impulse and target very efficiently. News America Marketing In-Store with its SmartSource Coupon Machine and Catalina with its Checkout Coupon Program are the two largest in-store coupon distributors..

While coupons delivered outside the store still represent the largest share of coupons distributed, in-store coupons represent a growing share of distribution and a disproportionately high and growing share of redemption. Given manufacturer trends toward targeted marketing, account specific marketing and promotional efficiency, you can expect in-store couponing to continue growth.

ON-PACK COUPONS

Research shows that 70% of the buying decisions are made in-store. One way to influence the consumer is with an effective on-pack promotion. An on-pack promotion can be used in many ways:

Brands are sometimes apprehensive about on-pack promotions because of potential interruptions in the manufacturing process and the possibility of misredemption. Following are some tips to ensure the efficient application of your next on-pack promotion:

1. Have the coupon supplier's machinery and product development staff meet with your Production, Marketing and Purchasing staff at the beginning of the project so the correct on-pack coupon design is created.
2. Have your supplier's machinery staff survey your plants. It will ensure that the proper equipment is installed and will also help to get a buy-in up-front from the production personnel who will be involved in the application.
3. Run a plant trial under actual conditions. Have the actual label construction produced with generic consumer graphics - "Thank you for buying our product," etc., and apply them under actual production conditions for several hours. This should be enough time to learn of any potential application problems.
4. Be sure to allow time for training the application machinery operators and plant mechanics.
5. Have a production team that will head this project in the plant.
6. Have your provider show you how redundant labeling machines can eliminate production down time.
7. Do not design a coupon size or shape that relies on application tolerances under 1/16". There are very minor shifts in production lines and in labeling machine dispensing, so allow for some movement of +/- 1/32'.
8. Design your coupon graphics to contrast with your packaging for the greatest visibility.
9. Remember on-shelf placement when determining on-package placement for your coupon. Pick a spot that is visible to the consumer when the product is stacked in the store.

When planned properly, an on-pack promotion can be executed without interruptions. Use an on-pack promotion to influence the 70% of undecided consumers to purchase your product.

DIRECT MAIL COUPONS

Couponing continues to be a major tool for product promotion for many packaged goods and service marketers. Recent studies published in advertising trade journals cite cases where coupons are very effective in achieving the goals of awareness, trial, and usage. Recent advances in technology and knowledge have further enhanced the ability of companies to execute, track, and analyze the effectiveness of couponing promotions. New delivery executions such as Account Specific promotions, On-line and Internet sites In-store promotion programs and targeted direct mail delivery have supplemented the traditional newspaper FSI and provided new levels of targeting and efficiency. The number and type of marketers distributing samples, coupons, and offers in targeted promotions have increased significantly in the last several years reflecting the growing desire of these advertisers to impact the best potential consumer.

Distributing coupons and samples via direct mail marketing has a number of features and benefits that make it an attractive alternative for many marketers.

Targeting - Highly specialized mailing lists make it possible to select and reach potential customers that most closely match the user profile of a product. The target audience can be expanded or reduced to meet reach, budget, and redemption goals.

Cost Effectiveness - Multi-advertiser direct mail programs allow advertisers to reach large numbers of the target audience at low rates. With more targeted audiences which typically result in higher redemption's, mail delivered coupons have a cost-per-redemption comparable to or better than other promotion methods.

Waste and Fraud Reduction - Mail delivered coupons targeted to the most desirable consumer reduce waste and reduce the possibility of misredemption or fraud.

Control - In addition to the audience selection, mail delivery of coupons allows the advertiser to control other elements such as timing, geography, test panels, and deliverability.

Impact - Mail demands people's attention! For the most part, people deal with their mail daily, apart from the clutter of newspapers, magazines, shopping, etc.

Personalization - Direct mail allows advertisers to take advantage of technology that allows for personalization and inter-activity to further engage and interest the prospective consumer.

By it's nature, direct mail is flexible and applicable to a number of marketing goals. It can be used strategically to support general advertising campaigns or tactically for a specific promotional effort. Marketers use direct mail as a stand-alone promotional vehicle, and many times as a way to build a database of mail or promotion-responsive customers.

There are several commonly used forms of delivery available for direct mail coupons.

For marketers with larger budgets or desiring extra high impact, a "solo" direct mail package is often employed. These are usually a "self-mailer' brochure or flyer that is sent directly from a manufacturer or, perhaps in conjunction with a retailer, in the case of an Account Specific program execution.

The most popular and cost-effective format is the multi-advertiser or co-operative mail program. In these programs, a number of advertisers share the cost of targeting and reaching large groups of consumers with a common interest, product preference or geography.

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    COUPONING SCHEMES ON THE INTERNET

Promoters and con artists are making money by fraudulently marketing and misrepresenting coupon related business opportunities featuring coupon certificate booklets, distributorships and work-at-home coupon clipping services. These promoters market these coupon-related schemes as business opportunities to unknowing consumer and charitable organizations including:

Another scam relates to coupon clipping services. Promoters make exaggerated claims about the income and profit potential for work-at-home coupon clipping services. You can identify these scams by some of the advertising claims such as:

Certificates Booklets - The investor purchases a distributorship to sell coupon certificate booklets (containing 50 certificates each of which are redeemed for $10 worth of grocery store coupons) and other distributorships at a reduced price from the promoter. The investor is then to sell the booklets to consumers for $20 to $50 each and distributorships in which the investor will get a percentage of each distributorship's sales.

Consumers who buy the certificate booklets have to complete and mail in a form selecting 40 to 60 products from a list and include a self-addressed stamped envelope and a processing fee in order to receive the coupons. The promoters promise hundreds to thousands of dollars in earnings from these business ventures.

In theory, the investor makes big profits selling booklets and distributorships to consumers and the consumer save money using the coupons to buy groceries. In reality, the promoter is the only one who makes money. Consumers find that the booklets have significant restrictions and that they have paid for complicated forms and requirements, difficult procedures, substantial processing and handling fees, additional postage costs and they end up with nothing to show for it. The booklets are very hard to sell due to their limitations and hidden costs.

The buying and selling or transferring of coupons violate most manufacturers' coupon redemption policies and therefore voids the coupon. The distributorships are generally based on a pyramid scheme, which is illegal and may violate federal law by making misleading or exaggerated claims regarding potential earnings.

In conclusion, before you enter into a business venture like this, you should find out:

1. The total cost, including fees, postage and supplies;
2. The details of the companies refund policy;
3. Check with the Better Business Bureau;
4. Find out who will pay you, whether you will be paid by salary or commission, and when you will get your first paycheck;
5. Get all promises in writing.

Remember, if a deal sounds to good to be true, it probably is!

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        HOW TO DEVELOP A SUCCESSFUL FSI COUPON

In order to develop a successful FSI coupon you must first determine what your marketing objectives and goals are for your product or brand.  There are several factors and variables involved that will determine how your FSI will be accepted by the consumer and thus, what affect you FSI will have on sales and product movement.  Among these factors are:

    1. The type of product/category for your coupon;
    2. The sales volume and market share held by the brand;
    3. Frequency of purchase for the category;
    4. Face value of the coupon;
    5. Expiration date "Length of time for the promotion";
    6. Distribution or circulation of the FSI;
    7. The present state of the economy; and
    8. The related competitive activity.

The proportion of new buyers depends considerably on the market share of the brand.  Other variables that may impact an FSI's redemption rate include:

    1. Related promotion support (in-store sampling, displays, shelf talkers, etc.);
    2. Product availability;
    3. Seasonality of the product;
    4. Effectiveness of ad copy and ad placement;
    5. Coupon size and number of coupons per page.

A study entitled, "The Advertising Exposure Effects of Free-Standing Inserts"  indicated that integrating advertising and promotion has a greater affect on brand sales than what is represented in coupon redemption rates alone.  This is achieved by combining a four-colored FSI coupon with an impactful advertising message that creates brand awareness and an incentive for the consumer to purchase the product now.  The study revealed that the combined use of advertising and promotion in an FSI is more effective in increasing incremental sales as well as providing image enhancement and brand recognition.

Full page FSI's redeem higher than half-page.  Promotion Decisions, Incorporated research revealed that when comparing the benefits of full-page FSI ads to half-page ads, full-page ads redeem 17.5% higher; have 9.0% more incremental sales; 27.5% more new and former users of the product; and result in a greater number of repeat purchases.

In developing your FSI coupon, Santella & Associates recommends the following:

1. The ad should simply highlight the benefit of the product  and be visually uncluttered and uncomplicated.  You have a brand image and an offer to convey and creativity plays a key role in getting your ad noticed.  The coupon should compliment the ad;

2. The coupon should be large enough to be easily read by the consumer.  Use clearly defined terms that make the decision easier for the consumer;

3. Display the name of your product/brand boldly;

4. Place no more than two coupons per page with a pictorial reinforcement.   Time release coupons are more efficient for faster consumer response (possibly using expiration dates of one and three months);

5. Combine your market leader brand in an FSI with a new or weaker brand to strengthen sales of the new or weaker brand;

6. Use lower value coupons good on any size to generate more volume movement;

7. Do not use self-destruct (overlay) coupons.   Beverage manufacturers should not issue small adhesive bottle cap coupons.  We recommend that these manufacturer's use a coupon that has perforated edges that can be torn away from the packages.  This would allow the manufacturer to issue a larger coupon with a barcode that can be scanned at checkout, thus reducing hard-to-handle fees and invoice deductions from the retailers.  I realize that bottle cap coupons are not FSI's but I feel it is an important point for beverage manufacturers to realize;

8. Include the 128 extended barcode on your coupons to improve processing efficiencies and ultimately reduce your costs;

9. Use higher face value coupons that require multiple purchases, where possible;

10. Consider the market and demographics of your present and potential customer base.

11. Coupons form a contract between the issuer and the retailer as well as the consumer.  Legal copy is intended to protect the issuer from fraud and misredemption and should include:
    
    A.   The product name, size, variety and any other purchase requirements.
    B.    The face value or  the "maximum value allowed" on free coupons.
    C.    Statement indicating "Void if copied, transferred, purchased or sold."
    D.   Handling fee to the retailer.
    E.    Indicate "One coupon valid per item" or "May not be combined with any other offer."
    F.    Redemption address.

12. Manufacturer's should audit your Redemption Agent every two years and conduct an   annual audit program of Retailer Clearing Houses.  This can improve communication and provide you with an opportunity to identify, review, and clarify administration of your coupon program and the responsibilities of each party.  The audit program of Retail Clearing houses ensures that your retail partner's are reimbursed promptly, ensures that there is an adequate accounting of transactions and reduces the opportunities for fraudulent misredemption.

13. Establish a Coupon Redemption Policy and the legal terms and conditions to provide disclosure of information essential for redemption.  This will also provide legal protection against fraud/misredemption by providing a contract with consumers and retailers.

14. Perform a Legal Review of the Contract with your Coupon Redemption Agent, Printers and Suppliers.  The basic areas to cover include the costs of coupon processing and the related reporting services, retailer verification methods, misredemption detection techniques, processing and payment turnaround time, manufacturer's right to audit (including the use of a third party auditor), data storage and reports, destruction of coupons, customer services provided, confidentiality, insurance and indemnification.  There are additional areas that should be covered based on the specific needs and concerns of the manufacturer.

15. Finally, Develop a Corporate Deduction Policy which determines if the deduction is caused by a coupon adjustment.  The policy should describes how to document the original coupon invoice number, date, amount, retailer name and the reason for the deduction.  Determine how you will direct your inquiries to the retailers and discuss the situation and the options for settlement with the retailer.  Establish procedures for dealing with the day-to-day issues such as invoice deductions and retailer inquiries.  The policy should describe the factors involved in determining whether the deduction will be accepted or denied.
    
    A coupon invoice deduction is an amount deducted from a manufacturer's product invoice in lieu of non-payment of the manufacturer's cents-off coupons.  This practice has affected the industry in the past and this issue has received renewed attention recently, as retailers, manufacturers and redemption agents continue to discuss the issues such as chargebacks and payment efficiencies.

The following are factors that we feel are important to know when making your decisions:

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  HOW TO DESIGN A COUPON

1. Purchase Requirements - The purchase requirements should be prominently shown and stated in simple, easy to read language. Multiple purchases should be clearly stated and shown next to the face value. Avoid complicated offers, where possible. 
   
2. Product Name & Logo – Place the product name in the center and also the logo, if room permits.
   
3. Manufacturer Coupon – Place the words "Manufacturer Coupon" at the top center of the coupon in Bold type.
   
4. Size – The coupon should be 6" x 2 1/2" (with a tolerance to 3" x 2 1/16"). Larger coupons are hard to handle and smaller ones are difficult to read.
   
5. Expiration – The expiration date or the word "No expiration" should be placed at the top center next to the words Manufacturer Coupon. You should always include the month, day and year.  The use of "No Expiration Date" coupons should be limited.
   
6. Picture of Product – A picture of the product should always be displayed.
   
7. Color – Your coupon should be four color with contrast from the ad. You should not use distracting background colors.
   
8. Terms of the Offer – the legal terms for the offer should be simple and easy to read. It should also indicate that reproductions will not be accepted and that there is an 8 cent handling fee and the name and address of the manufacturer, P.O. Box address where the coupon should be sent for reimbursement.
   
9. UPC Code – use the standard 12 digit UPC code which includes the Number System Character "5"; your Manufacturer Identification Number (MIN); Family Code; Value Code and Check Digit. The UPC code should always be printed in Black on White background.
   
10. UCC/EAN 128 Extended Barcode – Always use the extended barcode which can be in one of 5 different formats and include a 5 digit Offer Code; 4 digit Expiration Date; 8 digit Household ID; or a 1 digit Null Code.
    
11. Physical Qualities – The coupon should be printed with the texture and weight for easy handling and efficient processing. The coupon should also be perforated or includes dotted lines to indicate where to cut the coupon.

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GUIDELINES TO CREATING AN EFFECTIVE COUPON

1. THE OFFER: The coupon offer should be clear, specific, and visible including the purchase requirements such as quantity, size, etc.
   
2. FACE VALUE: The face should be visibly prominent.  Use lower face values on coupons good on any size to generate more volume movement and higher face values on coupons that require multiple purchases.  Where product movement is your objective, consider using a coupon for one Free with multiple purchases.
   
3. MANUFACTURER COUPON: Place the words "Manufacturer Coupon" at the top center of the coupon in Bold type.
   
4. EXPIRATION DATE: It should be clearly visible at the top center of the coupon and highlighted next to the words manufacturer coupon.  Shorter expiration periods limit your liability and promote faster response to your promotion, however, longer expiration dates increase your redemption rates.
   
5. PRODUCT: Display the name of your product/brand boldly for quick recognition.  Include your company logo to emphasize product recognition.
                                                                             
6. BACKGROUND: Use bright, clean colors for the background of your coupon.  Outline your ad with a thin border that contrasts with the rest of  the ad.
                                                                    
7. HEADLINE: Use a clear, Bold headline emphasizing savings.   Keep ad copy to a minimum using an eye-catching message.
                                                                                                                         
8. COUPON LOCATION: Coupons should be located at the bottom of the ad.
                                    
9. UPC CODE: The Universal product Code (UPC) should be placed in the lower right corner of the coupon.  The UPC must be in black on a white background and should be at 100% magnification.  You should also include the 128 extended barcode on your coupons to improve processing efficiencies.                                                                                                                      
10. COUPON SIZE: Coupons should be distributed in standard sizes and shapes.  The following sizes are recommended:
    
    Length: 6 inches with a tolerance of 3 inches;
    Width: 2½ inches with a tolerance to 2 1/16 inches.
    
    Place no more than two coupons per page with a pictorial reinforcement.  Print a dotted line around the coupon to show consumers where to cut out the coupon. 
                                                   
11. LEGAL COPY: Keep the legal copy to the minimum required by law.

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