Premium Offer - Definition & Types
What is Premium Offer?
Traditionally premium offer is defined as a sales promotion technique where the customers are given two or more products and they pay lower than the price of the combined products. It is an inducement for the customers to buy more products. In premium offers the customers get prizes, gifts, coupons, and vouchers etc. as incentives when purchasing products. At times, Premium is designed for loyal customers and sometimes to attract more customers. Premium offers also help generate lead for the products as many customers are deal hunters.
Types of Premium Offer
Premium offers are of following types:
1. Free premium: - These are the premium offers for which customers doesn’t have to pay anything they just have to purchase the product and they get the offer. The objective of these premiums is to reward loyal customers, increase brand awareness, make brands more user friendly.
e.g. get $10 worth free talk time
2. Self liquidating premium: - In, self liquidating promotion premium offers, he token amount needs to be paid to avail the offer like a gift or voucher. The objective is to attract more customers at lower price. This helps generate more revenue for the company.
e.g. Choose any 2 pizza's for $6 each & save $4
3. On Package premiums: - These premium offers are small toys or gifts inside the packs. These offers help a brand revitalize itself and explain a different usage for the same product. It also helps improve the visibility of the product.
e.g. get a free toy with this chocolate
Hence, this concludes the definition of Premium Offer along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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