Advantages of Premiums

• Can be effective in achieving specific goals.
• Allow collection of names for marketing database.
• Provide brand equity support.
• Can be a motivating part of a loyalty program.

Disadvantages of Premiums

• Can be difficult to measure sales.
• May have residual inventories.
• May require special handling for inventory shortages.
• Can incur costs for damaged or defecting merchandise.
• May receive complaints from consumers who did not receive premium.

Considerations for Premiums

• A premium item should reinforce the brand's image.
• A premium offer should allow for various redemption methods.
• An item offered as a premium should be thoroughly tested (establishes liability parameters, provides inventory safeguards.)
• Marketers should be aware of a premium's exact size, weight and packaging details.
• Marketers should consider premium mailing options (determine best packaging, determine shipping method, set premium cost.)
• Marketers should consider domestic versus imported premiums. If imported, allow extra time for production and testing, dealing with customs brokers and securing lines of credit.
• A premium item should have carefully written ad copy which includes, "while supplies last," offer dates, complete item description, retail value claims, and mail-in address.