Overview of Value-Added Packs

Bonus packs - bonus packs can preempt competitive events, increase consumption, prevent excessive competitive price discounting and encourage purchase in categories with low brand differentiation.

Advantages of Bonus Packs

• Reward or retain current users.
• Attract attention at point-of-purchase.
• Offer price reduction.
• Generate savings through potentially low and predictable costs.

Disadvantage of Bonus Packs

• May reduce sales volume.
• May have low appeal for non-users.
• Can extend production lead time.
• May generate retailer objections.

Source: PMA

On-pack and In-packs - Premiums or coupons inserted in or attached to a product.

Advantages of On-packs and In-packs

• Can differentiate the product at point of sale.
• May serve as a future reminder to buy.
• Can allow costs to be determined in advance.

Disadvantages of On-pack and In-packs

• Can be expensive to manufacture and distribute.
• May be refused by the retailer.
• Can be pilfered.

Source: PMA

Near-packs - near-packs are premiums, not attached to the product, that are offered with purchase.

Advantages of Near-packs

• Allows retailer displays.
• Can generate repeat purchase, especially if part of a set.
• Can generate trial for other products.
• Can allow costs to be determined in advance.

Disadvantages of Near-packs

• Are disliked by many retailers.
• May be displayed separately from product area.
• Allow pilferage.
• May be sold separately by retailers.

Source: PMA

Advantages of Specialty Containers

• May encourage more product use.
• May encourage future purchase, especially if part of a set.
• Can allow costs to be determined in advance.

Disadvantages of Specialty Containers

• May be refused by retailers.
• Generate extra production and handling costs.
• May require a stocking allowance.

Source: PMA

Advantages of Price Packs

• Allows price differentiation at point-of-purchase.
• Allows manufacturer to control liability.
• Can be used to promote a particular size or flavor.

Disadvantages of Price Packs

• Are regulated by the FTC. (Brand must have an established price, no more than 50% of annual volume can have price packs, only 3 price pack events per year are allows, there must be at least a 30-day period between each price pack.)
• Have long lead times.
• May downgrade a brand’s image.
• Can be unpopular with the trade. (Generates a new SKU, but no new traffic.)

Source: PMA