WO2006010191A1

WO2006010191A1 - Marketing method

Info

Publication number: WO2006010191A1
Application number: PCT/AU2004/000984
Authority: WO
Inventors: Jagjit Singh Kaurah
Original assignee: Market-Club Loyalty Program Pty Ltd
Priority date: 2004-07-26
Filing date: 2004-07-26
Publication date: 2006-02-02

Abstract

A method of creating a chain of inducement for the marketing of at least one of products and services, wherein there are at least three members in the chain enrolled in a marketing scheme comprising the steps of, creating a register (4) of a plurality of members (1, 2, 3) in the marketing scheme wherein the members comprise suppliers (1, 5, 6) of, at least one of a product and service, and consumers of the at least one of a product and service, offering an incentive (18) to a first member (2) to introduce a second member (3) to purchase the at least of a product and service, from a first one of the suppliers, and recording the introduction of the second member by the first member to a first one of the suppliers as a rebate unit, wherein the incentive to the first member is based upon a purchase price of all products and services by the second member from the first one of the suppliers as an introduction rebate (18) from the first one of the suppliers and the second member obtains a purchase rebate (19) on the purchase price from the first one of the suppliers.

Description

MARKETING METHOD

Field of the Invention

This invention relates to a marketing method. In a particular non-limiting aspect, it relates to a marketing method which can provide incentives for both suppliers of goods and services and purchasers of such goods and services which ultimately benefit both groups financially by virtue of increased sales for the suppliers and rebates for the purchasers.

Background of the Invention

Various marketing schemes are in common use throughout the world. In one type of scheme, purchasers of goods or services receive credit points for purchasing from suppliers who are enrolled in these schemes. The credit points may be accumulated by the user and ultimately "spent" by obtaining free or reduced price airline tickets, by obtaining reductions in petrol charges or by buying goods or services in accordance with a rating of credit points associated with each of those goods or services.

Whilst such marketing schemes are generally successful, they suffer from the defect that there is no incentive for the purchasers of the goods or services to extol the virtues of the system to other potential purchasers and to introduce them to the marketing system concerned.

There are other schemes where purchasers are encouraged to involve other purchasers by providing them with incentive payments for enrolling new purchasers in the scheme. The newly enrolled purchasers may in turn enroll further purchasers in the scheme and along the chain the various members may obtain rebates or incentives based upon the amount purchased by the various people that they have sought to enroll in the scheme. Generally speaking, such schemes have a pyramidal structure which rewards those at the top of the pyramid very handsomely with reducing rewards going down the various levels of the pyramid. Because of the multiple layers of rewards involved, and the complexity of such schemes there is generally a high cost associated with their operation. This high cost ultimately translates to higher prices.

Thus, there is a need for a method of marketing which provides an incentive for purchasers to enroll new members in the marketing method whilst limiting the number of layers requiring incentive payments for their services.

Disclosure of the Invention

The invention provides in one aspect a method of creating a chain of inducement for the marketing of at least one of products and services, wherein there are at least three members in the chain enrolled in a marketing scheme, comprising the steps of, creating a register of a plurality of members in the marketing scheme wherein the members comprise suppliers of, at least one of a product and service, and consumers of the at least one of a product and service, offering an incentive to a first member to introduce a second member to purchase the at least one of a product and service, from a first one of the suppliers, and recording the introduction of the second member by the first member to a first one of the suppliers as a rebate unit, wherein the incentive offered to the first member is based upon a purchase price of all products and services purchased by the second member from the first one of the suppliers as an introduction rebate from the first one of the suppliers and the second member obtains a purchase rebate on the purchase price from the first one of the suppliers.

Suitably, a marketing entity may administer the scheme. Thus, the marketing entity may be responsible for creation of the register ie. the marketing entity may record enrolment of members in the marketing scheme, and identities of the members and suppliers as a rebate unit when a purchase of at least one of the goods or services has been made in accordance with the scheme. The marketing entity suitably arranges for collection and payment of rebates. Thus it may arrange for initially obtaining a primary rebate from a supplier in a rebate unit. This primary rebate may then be used to fund the payment of introduction rebates and purchase rebates to the first and second members respectively.

It is to be appreciated that the nature of rebate payment in each instance may be different. For example, the supplier may pay a rebate to the marketing entity which may be payable in cash. Typically, the primary rebate may be a cash amount calculated as a percentage of the amount spent by a member in purchasing goods or services from the supplier. Typically, a percentage rebate between 1% and 10% more preferably between 3% and 6% may be involved.

Thus, the marketing entity may use the primary rebate supplied by the supplier to fund the payment of the introduction rebate and purchase rebate. Typically, the marketing entity may retain a proportion of the primary rebate to cover administrative costs and provide for a profit margin leaving sufficient funds for payment of the introduction rebate and purchase rebate.

The introduction rebate and purchase rebate may be paid in the form of cash or credit. Alternatively they may be paid in any other form which could be considered to be an incentive to either the first or second member. Typically, the introduction rebate and purchase rebate may comprise at least one of a cash payment, a cash credit, a credit for payment in relation to at least one of goods or services, and credit points redeemable for at least one of goods and services.

As an additional incentive to suppliers, the marketing entity may pay each supplier an amount based upon the number of new members enrolled by a supplier without an introduction from a member. For example, a payment of between twenty cents Australian and five dollars Australian per new member may be given. More suitably, the amount may be between fifty cents and one dollar fifty Australian per new member. The members of the scheme may be individuals or organizations. Typically, the suppliers and first members may comprise educational organizations, marketing organizations, manufacturers, distributors, services providers, retailers, wholesalers, buying clubs, shopping centres, individuals and communications organizations.

The method of the invention may be used as an incentive scheme for employees ie. employees of an organization acting as the first one of the suppliers may be allowed to take up roles as first members in introducing second members to the scheme. This may entitle them to an ongoing rebate related to all purchases made by that second member through the first member's employer who happens to be the first one of the suppliers in the scheme.

Preferred aspects of the invention will now be described with reference to the accompanying drawing.

Brief Description of the Drawing

Figure 1 illustrates a block diagram of a typical marketing scheme employing the method of the invention.

Detailed Description of Preferred Embodiment

The various elements identified by numerals in the drawing are listed in the following integer list.

Integer List

1 Supplier 2 Member

3 Member/Purchaser

4 Marketing entity 5 Supplier

6 Supplier

8 Member/Purchaser

9 Member/Purchaser 10 Sign up step

11 Introduction step

16 Information transfer

17 Payment/Primary rebate

18 Payment/Introduction rebate 19 Payment/Purchase rebate

22 Introduction

23 Introduction

51 Payment/Primary rebate/Information

52 Payment/Introduction rebate 53 Payment/Purchase rebate

61 Payment/Primary rebate/Information

62 Payment/Introduction rebate

63 Payment/Purchase rebate

Referring to Figure 1, a typical array of suppliers and members who are purchasers involves a structure where there are basically three members in the supply chain from supplier to purchaser with a marketing entity for conducting the administrative arrangements for the scheme.

In the first layer of the structure moving from the top of the drawing page and gradually working down, one begins with a supplier of goods and services 1 who is also enrolled as a member of the scheme through the marketing entity 4.

The supplier acts as an agent to enroll a member 2 as indicated by the sign up step 10.

Following the sign up step 10, information 16 concerning member 2 is transferred to the marketing entity 4. After enrolment, member 2 may introduce a new member 3 to the supplier 1 by the introduction step 11. The supplier 1, transfers information 16 identifying the fact that member 2 has introduced member 3 to the scheme to the marketing entity 4 and the relationship of member 3 as being introduced as member 2 to supplier 1 is permanently recorded on a register such as a computer database.

Thus, whenever member 3 purchases any product or services from supplier 1 , supplier 1 puts aside a proportion of the purchase cost (say for example 5%) and provides it as a payment 17 forming a primary rebate to be distributed and used by marketing entity 4.

From this payment 17, marketing entity 4 makes a payment 18, as an introduction rebate to member 2 and a payment 19 as a purchase rebate to member 3. These payments will apply for the entire period supplier 1, member 2 and member 3 are enrolled in the scheme. Typically, where a 5% payment is provided by supplier 1, member 2 may receive an introduction rebate of say 1% and member 3 may receive a purchase rebate of 1% leaving the marketing entity to retain 3% of the total spent on goods and services by member 3 for profit and coverage of expenses. Continuing on down the page, to the line represented by supplier 5, it can be seen by comparison with the line represented by supplier 1, where member 2 is the first member in line with the supplier, member 3 now becomes the first member in line and is in a position to make an introduction step 22 for a new member 8.

As in the case of the first supplier line, supplier 5 provides payment in the form of a primary rebate and information 51 to the marketing entity and the marketing entity distributes payments 52 and 53 to members 3 and 8 based upon the value of member 8's purchase of product and services from supplier 5.

Continuing on down the drawing page, member 8 then becomes first in line to supplier 6 in the introduction step 23 for member 9.

Again as in the previous cases, supplier 6 provides payment in the form of primary rebate 61 and information to the marketing entity 4 to enroll member 9 in the scheme. This is a prelude to allowing payments 62 and 63 to go to members 8 and 9 based upon member 9's purchases from supplier 6.

The number of suppliers and members can continue on indefinitely down the drawing page and each individual member has the opportunity of signing up as many new members with as many suppliers as they like, to obtain the benefit of incentives from a number of members and suppliers.

It can be seen that this structure limits the number of parties in the chain receiving rebates, thereby limiting the amount of extra cost associated with the scheme. Furthermore, because the scheme provides incentives for purchasing members, the suppliers to the scheme would anticipate receiving more opportunity for purchasers to purchase their goods and services thereby increasing their turnover and improving their overall profit margins. The improvement in overall profit margin caused by increasing turnover should be sufficient to fund the primary rebates given to the members and the marketing entity by the suppliers. Even after funding the rebates there should be enough left from the overall profit increase to leave an extra amount of profit with the suppliers as well.

To improve the incentive for suppliers, the marketing entity may provide a rebate to a supplier who signs up a new member without an introduction from a previous member. Typically, the rebate may be between fifty cents and one dollar fifty Australian. Alternatively the rebate may comprise a percentage of that new members purchase value.

It is proposed that schemes of this type may be called "MarketClub Schemes". The following is a brief description of how MarketClub transactions may be processed:- Processing of MarketClub Transactions

The transaction process is simple and customers are able to pay in the normal way ie, cash, credit card etc and MarketClub does not stop the members from participating in other schemes linked to Credit Cards as an example.

The customer would show their MarketClub card and the data would be captured by any of the following means:

1. MarketClub stand alone, smartcard terminal supplied by MarketClub. The terminal simply connects to a phoneline, dials and downloads the transaction information to MarketClub servers once a day.

2. A MarketClub Virtual Terminal, that operates as a PC program in a supplier's computer at the point of sale.

3. Software that sits on a PC and links to a supplier's integrated Point of Sale system.

Summary of Benefits

• Can earn additional income by simply signing up customers.

• Improves net profits through customer pull, rewards, community benefit etc

• MarketClub can be used to advertise a supplier's business on its website and offer joint promotional opportunities.

• The administrative burden of operating the rewards/rebate program is outsourced to MarketClub.

Whilst the above description includes the preferred embodiments of the invention, it is to be understood that many variations, alterations, modifications and/or additions may be introduced into the constructions and arrangements of parts previously described without departing from the essential features or the spirit or ambit of the invention.

It will be also understood that where the word "comprise", and variations such as "comprises" and "comprising", are used in this specification, unless the context requires otherwise such use is intended to imply the inclusion of a stated feature or features but is not to be taken as excluding the presence of other feature or features.

The reference to any prior art in this specification is not, and should not be taken as, an acknowledgment or any form of suggestion that such prior art forms part of the common general knowledge in Australia.

Claims

1. A method of creating a chain of inducement for the marketing of at least one of products and services, wherein there are at least three members in the chain enrolled in a marketing scheme, comprising the steps of, creating a register of a plurality of members in the marketing scheme wherein the members comprise suppliers of, at least one of a product and service, and consumers of the at least one of a product and service, offering an incentive to a first member to introduce a second member to purchase the at least one of a product and service, from a first one of the suppliers, and recording the introduction of the second member by the first member to a first one of the suppliers as a rebate unit, wherein the incentive offered to the first member is based upon a purchase price of all products and services purchased by the second member from the first one of the suppliers as an introduction rebate from the first one of the suppliers and the second member obtains a purchase rebate on the purchase price from the first one of the suppliers.

2. A method according to claim 1 wherein a marketing entity arranges enrolment in the marketing scheme, and recordal of identities of the members and supplier in the rebate unit.

3. A method according to claim 2 wherein the marketing entity initially obtains a primary rebate from the first one of the suppliers based upon the purchased value of all products and services by the second member and uses the primary rebate to pay the introduction rebate and purchase rebate to the first member and second member respectively.

4. A method according to any one of the preceding claims wherein the rebate comprises at least one of a cash payment, a cash credit, a credit for payment in relation to at least one of goods and services, and credit points redeemable for at least one of goods and services.

5. A method according to claim 4 as appended to claim 3 wherein the primary rebate comprises at least one of a cash payment and a cash credit, and the introduction rebate comprises at least one of a credit for payment in relation to at least one of goods and services, and credit points redeemable for at least one of goods and services.

6. A method according to any one of the preceding claims wherein the first member comprises at least one of an individual, educational organization, a marketing organization, a manufacturer, a distributor, a services provider, a retailer, a wholesaler, a buying club, a shopping centre and a communications organization.

7. A method according to any one of the preceding claims wherein the supplier comprises at least one of an educational organization, a marketing organization, a manufacturer, a distributor, a services provider, a retailer, a wholesaler, a buying club, a shopping centre and a communications organization.

8. A method according to any one of the claims 1 to 7 wherein the first member is an employee of the first one of the suppliers.

9. A method according to claim 2 wherein the suppliers enlist new members and supply the marketing entity with information to record enrolment of the new member in the register.

10. A method according to claim 3 wherein the suppliers enlist new members and supply the marketing entity with information to record enrolment of the new member in the register and to record sufficient detail concerning the rebate unit to allow the marketing entity to determine and pay the amount of the primary rebate and the purchase rebate to which the first and second members are entitled.

11. A method according to claim 9 wherein the marketing entity provides an incentive payment to each supplier based upon the number of new members enrolled by each supplier without a referral by a first member.

12. A method according to claim 9 wherein the marketing entity provides an incentive payment to each supplier based upon the value of purchases by new members enrolled by each supplier without an introduction by a first member.

13. A method according to claim 1 substantially as hereinbefore described with reference to the accompanying drawing.

14. A marketing scheme when used to carry out the method of any one of claims 1 to 11.