Scenario 15-4
General Mills brand breakfast cereals face strong competition in the dry cereal category from brands like Kellogg's and Quaker Oats.Still, General Mills brands like Wheaties and Cheerios maintain a strong share of the market.As a manufacturer, General Mills knows it must stimulate consumer demand for its brands, but it must gain retailer support for these brands as well.Its market research shows that some consumers are very loyal to certain brands of cereal, but most consumers show some level of variety-seeking behavior in this product category.As a result, General Mills is constantly examining different sales promotion tools to stimulate consumers to consider its brands when shopping for breakfast cereal.
-(Scenario 15-4) On the back of its Cheerios boxes, General Mills has printed a form to fill out for a cookbook offer.The booklet, entitled Healthy Snacks and Appetizers with Cheerios, is available to consumers for a nominal charge of $3.00 plus a $1.00 shipping and handling charge.This is an example of

Question

Quizplus · Accepted Answer

This is an example of a self-liquidating premium because consumers are required to pay a nominal charge of $3.00 plus a $1.00 shipping and handling charge in order to receive the cookbook offer. The cost of the premium is covered by the payment from the consumer, making it a self-liquidating promotion.

Scenario 15-4 General Mills Brand Breakfast Cereals Face Strong Competition in the in the Dry