However leader brands are forced

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Rewards based on this overcapacity such as air miles or stays in hotels and resorts are highly valued by potential customers. In regard to subsidies retailers have two types of sponsors for their loyalty reward investments manufacturers of the branded goods sold by retailers and other partner companies presumably with higher margins who find it economically advantageous to pay retailers to attract additional business from their shoppers Disney restaurants theme parks etc.

The former finance most of the targeted coupons while the latter contribute the lion s share of the financing of turbo charged vouchers. Since manufacturers already invest significantly in retailer promotions targeted promotions are a welcome vehicle for brand owners to improve the effectiveness of these promotional investments. They are particularly attractive Chinese Overseas America Number Data to challenger brands because targeted coupon activities are extremely scalable—they can participate for a varying number of brands for a varying period of time. This scalability of the coupon activities makes them less attractive to leader brands. They prefer ceteris paribus heavier less scalable promotional activities like in store demonstrations big prize sweepstakes and the like which are less affordable for challenger brands.  to keep a fair share of these targeted coupon promotions as a defensive strategy against their challengers.





Overall retailer initiated loyalty systems are truly triple win marketing activities simultaneously benefiting retailers more loyalty more sales better profitability given their high fixed costs brand owning suppliers more effective couponing and an offensive tool for challengers and a defensive tool for market leaders and shoppers and consumers more appropriate product and price propositions . Given these substantial advantages for all parties involved retailer loyalty programs can be sustainably profitable across the whole value chain. As the percent of retail sales associated with promotions increases over time improving the effectiveness and the efficiency of promotional spending will continue to be of utmost importance.