Here are a few examples of when marketing promotions went seriously wrong for larger organisations.
Heinz recipe book was a printed recipe book promotional offer on its Pickering Fruit Pie Fillings. Heinz forgot to print a reply address, so no one could participate in the promotion.
Kraft Foods' 'Win a free camper van' promotion had a computer error that generated hundreds of winners. As the prize-winners' claims kept coming in, Kraft realised there was a problem. Some disappointed customers vowed never to buy the firm's food products again. Others sought legal action.
Typhoo Tea's Cash Pot Promotion.
In 1994 Cadbury Typhoo was reported to have had to make cash payouts of more than £1 million. According to Marketing Week Cadbury Typhoo's insurers were reported to have issued a High Court writ against the company seeking a 'declaration that some claims made by Cash Pot competitors are outside the rules of the competition'. Nevertheless, the expensive promotion apparently increased its market share to its 'highest level since its re-launch in 1982', but at what cost?
Coca-Cola's MagiCan. In 1990 Coca-Cola's US promotion was supported by a massive $100 million push. The MagiCan looked, weighed and felt like a regular can. When the tab was pulled, the winning cans had a mechanism inside that pushed real rolled-up dollar notes through the hole in the top of the can. Cash prizes ranged from $5 to $200. The winning cans had some extra liquid to ensure the cans weighed and felt the same. Inevitably there were a few duds. Most of them just didn't work, but in a few cases the seal that held the 'liquid that gives the can the feel of the real thing' had broken. Although it was not harmful, one small boy drank the liquid and public health officials were called in. Massive media attention followed; 750,000 cans were held back while each one was shaken to determine whether the seal was broken or not. An immediate TV and press campaign was put in to action to explain the promotion and to warn customers not to drink the liquid if the seal was broken (Marketing, 31 May 1990)
Hoover free flights to New York were offered to anyone purchasing any Hoover over £100. They didn't do the correct research and thought they would receive 5,000 responses, but actually received 600,000. The trade increased prices of the cheaper models to over £100, so that effectively any Hoover purchase qualified for free flights. The promotion cost £48 million, careers and corporate image.
If you are planning a big promotion, you might want to consider insurance
Insurance (indemnity insurance, redemption insurance, etc) is advised with all sales promotions, but particularly recommended with highly creative and high-risk promotions.