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  Contact Details:
Andrew Rumpelt
Marx Promotion Intelligence
(518) 438-7665
andy.rumpelt@tnsmi-marx.com
News
February 1, 2006
 
FSI Buy One Get One (BOGO) Promotions Increased 48 Percent in 2005
New Report Details Growing Trend with Manufacturers
 

Minneapolis, MN, January 30, 2006 - 'Buy One Get One Free' (BOGO) Free Standing Insert (FSI) promotions increased 48 percent to 9.4 billion over 2005, according to Marx Promotion Intelligence/TNS Media Intelligence. The large increase was fueled primarily by three segments: Household Products, Dry Grocery and Health Care, where BOGO FSI promotions grew by 63%.

The information was released today in "Buy One Get One Free (BOGO) Promotions: a Growing Trend in FSI Promotion", the latest Promotion Guidepoint© paper from Marx Promotion Intelligence. Marx Promotion Intelligence, a TNS Media Intelligence company, is considered the industry standard for tracking FSI coupon activity.

"Through the increased use of FSI BOGO offers, manufacturers are implementing varying strategies depending on the product and category," said Andy Rumpelt, vice president of Business Development & Marketing at Marx Promotion Intelligence. "Health care and personal care manufacturers are becoming more aggressive by offering free refill-type cartridges with the purchase of base units. Additionally, food manufacturers are leveraging high equity brands to drive trial on other products, as well as fill up the kitchen cupboard with higher multiple purchase requirements to get the free item."

BOGO coupons have increased in both volume and face value over the last several years as manufacturers aggressively use BOGO coupons to deliver 'value', drive volume, retain loyalty, and build share. In 2005, there was a significant increase in non-food categories, which grew by nearly 80 percent; fueled by major household products companies like Proctor & Gamble, Reckitt Benckiser and S.C. Johnson & Sons (Figure 1).

BOGO Coupons Dropped (Millions)
2005 vs. 2004 Year

Sector 2004 2005 Act Chg % Chg
Food 3,440 4,186 747 21.70%
Non-Food 2,940 5,289 2,349 79.90%
Total PG 6,377 9,418 3,042 47.70%

Figure 1

The average BOGO coupon value also continues to rise, largely due to increased BOGO promotion on higher ticket items in non-food categories. Overall, the average BOGO face value increased to $3.33 in 2005, a jump of 118 percent versus $1.53 in 2002 (Figure 2). The average face value of a non-food BOGO is now $4.57 versus a $1.75 for food.

Average BOGO Face Value Trends
2002 Through 2005 Year

Sector 2002 2003 2004 2005
Food $1.21 $1.43 $1.34 $1.75
Non-Food $2.60 $3.94 $4.34 $4.57
Total CPG $1.53 $2.20 $2.72 $3.33

Figure 2

Across all of CPG, the most popular BOGO offer is 'Buy 2 Get 1 Free' and represents 45 percent of all BOGO offers. Within the Sectors, non-food BOGO offers tend to be smaller purchase requirements as compared to food items (Figure 3). The longer purchase cycle for non-food items and higher price points support the lower purchase requirement amounts. In contrast, food items, which include pet food, have much shorter purchase cycles and lower price points, which lend these items for pantry loading and high multiple purchase offers.

BOGO Purchase Requirements
% of Total BOGO Coupons Dropped
2005 Year

Purchase Requirements Food Non-Food
1 Unit 6% 13%
2 Units 38% 64%
3 Units 27% 13%
4 Units 9% 9%
5 Units or More 20% 1%

Figure 3

With the average face value of traditional cents-off coupons continuing to rise, BOGO offers will continue to be a viable option in the FSI consumer promotions mix. BOGO FSI promotions deliver a clear message to consumers of value, generally with the word, 'FREE', highlighted in the offer. BOGO promotions also increase awareness and enhance the ability of the sales force to garner stronger retailer support through enhanced merchandising and sufficient shelf and back room stock.

About Marx Promotion Intelligence
Marx Promotion Intelligence is the industry standard for tracking Free Standing Insert (FSI) coupon activity. Marx provides end users with real-time information and the tools to understand and act on the latest consumer promotion trends.

For additional information on this topic or other key consumer promotion issues, please contact Marx Client Services at (952) 925-5272 or visit the Marx website at www.tnsmi-marx.com.

About TNS Media Intelligence
TNS Media Intelligence in the U.S. is the leading provider of strategic advertising and marketing information - across media, brand, industry and market. The company's tracking technologies collect occurrence and expenditure data on more than 2.1 million brands spanning 20 media. The U.S. headquarters are located in New York City with sales locations in major markets across the country.

For further information, including this and prior press releases, please visit www.tns-mi.com.

About TNS
TNS is one of the world's leading providers of market information. The company delivers strategic market measurement, analysis, insight and advice to many of the world's largest organizations and most recognized brands. TNS' research helps its clients better understand the needs and wants of their customers, and its capabilities span market segmentation, advertising and communications, new product development, brand performance and stakeholder management. The company is also one of the leading providers of social and political polling. From its global network that spans 70 countries who together conduct research in more than 110 countries, TNS allows for local expertise and knowledge to be combined together with internationally consistent information and analysis.

TNS is listed on the London Stock Exchange (TNN) and is a trade mark of Taylor Nelson Sofres plc. Further information can be found on www.tns-global.com.