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Improve Profit Margins
The only difference between a baseball cap supplied by
Bloomfield Creations and a baseball cap purchased from a
major brand such as Billabong or Nike is the brand attached
to that product. Those desirable brands increase the overall
margins on such products to over 1000%.
Bloomfield Creations does not claim to be able to offer
similar levels of performance to our clients but we can
help to increase your margins by enabling you to charge
a higher price for your goods or services. On-pack promotions
(goods packaged with your existing goods) can encourage
users to pay a premium for your product as can any gift
with purchase type incentive. Generally speaking the 'Gift
with Purchase' (GWP) product has a low purchase cost and
a very high perceived value allowing your customers to justify
paying the premium price for your product or service. Ultimately
the aim of promotions such as these is to enable your goods
to be sold for a higher price through the use or a GWP that
costs less than the increase in price resulting in an increase
in margins. Some typical examples might be:
- a bottle opener on a bottle of wine. Cost $1, Premium
$2, Profit $1
- sailing jacket with new boat Cost $90, Premium $200,
Profit $110
- free manicure set with bunch of flowers, Cost $2, Premium
$5, Profit $3
- golf umbrella with purchase of golf bags or clubs Cost
$7, Premium $20, Profit $13
The success of GWP promotions hinges on having a desirable
offer and suitable promotion of it. We commonly refer to
the 'perceived' value (PV)of a product in evaluating alternatives.
Using the above examples:
- the customer is willing to to pay a premium of $2 to
get a bottle opener with a PV of $5
- the customer is willing to pay a premium of $200 to
get a jacket with a PV of $350
- the customer is willing to pay a premium of $5 to get
a manicure set with a PV of $7
- the customer is willing to pay a premium of $20 to get
an umbrella with a PV of $40
Ring your account manager today to unleash our creative
team on a GWP promotion that will improve you bottom line.
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