NZ invention set to win world-wide sales

Backgrounder Kachingo! - 1

October 9, 2001

KACHINGO!

NZ invention set to

win world-wide sales

Retail chains and their suppliers world-wide are searching for the most up-to-date and effective tools to increase sales while building customer retention and market share.

Shoppers on the other hand seem to be overwhelmed with sales promotion devices. They get plastic cards for this, bonus cards for that, coupons to get dollars off, games to play to win and a myriad of other methods designed to keep them coming back for more.

Kachingo! transcends existing sales promotions techniques. It embodies key elements for mass market appeal - ease of use, a real chance, instant rewards and a monthly big cash draw. And of course, retailers want to reward shoppers and recognise their value and importance.

And the bonus is, there’s no extra cost to shoppers. All you need do is shop at any one of the four Kachingo! retail partners' outlets and spend the required level or purchase any Kachingo! promoted item.

Retailers and manufacturers gain access to a sales promotion device that can provide them with real-time information about their products and promotions.

And now, Kachingo! in New Zealand has signed up three new international retail partners in BP, KFC (Restaurant Brands) and Woolworths (NZ) Ltd which includes 100 Woolworths, Big Fresh and Price Chopper supermarkets and Woolworths at Gull mini-markets nation-wide. They and their suppliers, join Super Liquor in forming the Kachingo! Village.

The current qualifying amounts for one line of Kachingo! are:

- $10 at KFC

- $25 at Super Liquor and BP, and

- $30 at Woolworths, Big Fresh and Price Chopper supermarkets, and $10 at Woolworths stores located at Gull.

For example, if I buy $50 worth of petrol at BP I get two Kachingo! Game Lines. If I also buy, say, a one litre of soft drink that is on Kachingo! promotion I would get an additional Game Line.

A world first

Kachingo! is a world first and it has been developed here in New Zealand. It is a revolutionary new marketing tool that is predicted to change the way New Zealand shops. Next stop - the rest of the world.

Kachingo! is the brainchild of New Zealand company Global Online Promotions Ltd (GO). GO has invested four years and about $10 million developing the unique software and designing the server for the unique Kachingo! product.

GO has protected its intellectual property with patents internationally and has offices in Auckland, Sydney and San Francisco.

Developers and investors

GO was formed to bring to market the Kachingo! invention of Christchurch-born entrepreneur Chris Berryman. The business model has been developed by a group of entrepreneurial New Zealand investors.

In 1999 Mr Berryman met GO chief executive officer Chris Aiken and in January 2000, Eric Watson and his company Cullen Investments and Strathmore Group became involved, providing the funding to get Kachingo! to market. Further investment has followed from Wellington-based Morrison & Co.

The investors are committed to taking Kachingo! world-wide.

How it works

Shoppers visit a Kachingo! partner’s shop and purchase goods. They must spend above a certain limit (see above) or buy a particular product on promotion to get a “game line” of Kachingo!. A line comprises six numbers plus a “power’ number. Shoppers receive special Kachingo! tickets in addition to their till receipts. They compare their numbers with published winning number prize lists to find out if they have won a prize. They can also take their tickets to any Kachingo! Retailer to be scanned.

Tickets

The Kachingo! ticket clearly identifies the details of each draw. It is issued at the same time as your till receipt. The ticket has the appropriate number of seven figure “game lines’ on it. For every additional Kachingo! promoted product you purchase, you get the specified number of game lines; i.e for every $30 spent at Woolworths Group supermarkets, $25 at BP and Super Liquor, $10 and KFC you get one line.

If you are an instant reward winner, a second ticket clearly shows what reward you have won, where to collect the reward and by when. Instant reward winners are still entered in the weekly and monthly draws through the Game Line ticket they would have received.

The Draws

There are three types of draw: daily, weekly and the Big Cash monthly draw.

Daily draw: $1,000 in one prize - there’s always a winner because winning numbers are taken from an issued ticket.

Weekly draw: $10,000 in one prize - there’s always a winner because winning numbers are taken from an issued ticket.

Big Cash Monthly draw: three divisions

- 3rd division, thousands of $20 prizes

- 2nd division, hundreds of $100 prizes

- 1st division, a minimum of $250,000 every month; one prize, from a live, random ball draw.

If there is no winner of the 1st division, the cash is added to the next month’s lottery.

Prize claims

Prizes can be claimed up to six months after the date of the relevant draw.

- Second and third prizes of $20 and $100 can be claimed from the store issuing the ticket or from Global Online Promotions.

- Prizes greater than $100 are claimed from Global Online Promotions.

To find out if you’re a winner, you can:

- visit www.kachingo.co.nz where all results are published daily

- have your ticket scanned at a retail partner store , or use the self checking units located in some stores

- check out in-store posters

- check out major metropolitan daily newspapers on Monday for weekly and monthly draw results

- view Teletext

- call 0900 Kachingo (0900 52244) - calls cost 99 cents a minute.

The Big Cash monthly draw is drawn live on television on the first Sunday of every month at 7.30pm, on TV2.

Retail Partners

Kachingo! retail partners are those businesses that have signed on to be part of the Kachingo! operation.

Current (from October 15, 2001) Kachingo! retail partners are BP, KFC in Auckland, Super Liquor and the Woolworths supermarket chain of Big Fresh, Price Chopper and Woolworths.

Super Liquor has been a retail partner since December 2000.

Suppliers

For suppliers, Kachingo! is a unique new sales and marketing tool.

Suppliers pay only for performance and the product enables them to gauge point-in-time information on the performance of their products. It also enables them to leverage on the chance of their customers winning the big prize.

Because suppliers can use the technology to target products at a specific consumer profile, the opportunities are myriad

International

Kachingo! is taking on the world. The rewards or customer loyalty industry in the United States is worth approximately US$175 billion a year. A competitor business in the United States has a market capitalisation of US$2.5 billion!

The Japanese market is potentially worth about the same amount as the US in terms of loyalty programmes.

Kachingo! has already opened offices in San Francisco and Sydney and has plans for expansion in Asia and the UK.

Website www.kachingo.co.nz

About Kachingo!

Kachingo! is a customer rewards programme invented in New Zealand. It is the only one to reward shoppers with Big Cash prizes and instant rewards just for shopping at any store within the Kachingo! village of partners. The village consists of BP, KFC (north of the Bombay Hills), Super Liquor and Woolworths, Big Fresh and Price Chopper supermarkets.

ends

Contacts:

Mary Vance ------------Deborah Pead
Managing Director ------Director
Global Online Promotions Pead PR
Tel: 0-9-309 4055 ------0-9-981 5556

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