Sales Promotion Planning — an Integral Element of the Marketing Mix
This article is e-printed from All-Business.com - June1, 2001
Pity the poor shopper who walks into a retail store and is bombarded by POP promotional messages. Save 50 percent off the suggested retail price of shoes. Buy a bottle of soda at full price and get another bottle for free. Buy two cans of soup and get a free box of crackers.
What do these offers have in common besides confusing the average consumer? They all are POP promotion tools that add value to a product. They encourage the consumer to buy a specific brand or to buy more than one or to buy a preferred brand and sample another. In short, they give the consumer more for their money by either reducing the cost or providing something for free.
...sales promotion is one of the building blocks of the marketing plan along with packaging, advertising, market research, public relations and events planning.
Sales promotions involve a finite time period, unlike advertising that can span several years. The impact of sales promotions is, therefore, easier to evaluate than advertising results. At the majority of marketing-savvy companies, in fact, sales promotion budgets are larger than advertising budgets, attesting to the desire for more immediate consumer response and quicker payback on marketing investment.
POP Promotions Contribute to Long-Term Brand Building
Since sales promotion tools are used for a short time period, marketers can be tempted to "shoot from the hip" and develop ad-hoc promotions in an attempt to quickly move product. This is a dangerous practice that is apt to backfire in the long run. Ill-planned and poorly timed promotions can interrupt the natural consumer product-use cycle, artificially inflate sales volume and even disrupt normal seasonality trends.
For example, if a consumer is loading his or her pantry with deeply discounted cat food yet still only has one cat in the house that eats the food, the cat food will not be consumed at a quicker rate. The myopic marketer who is only analyzing the short-term spikes in sales volume during the discounted promotion period will be disappointed by sales performance in the weeks following the promotion when sales trends decline and profit erodes.
The more successful POP promotions are those that are developed against a clear set of objectives. In fact, the example cited above for pantry-loading cat food meets the objective of removing a consumer from the market and precludes the purchase of competitive cat food brands. As part of a pre-planned campaign, this technique is extremely effective when defending against the launch of a competitive brand.
The example above illustrates that the sales promotion function has evolved from a quick in-and-out tactical effort to an increasingly pre-planned, long-range strategic campaign. Successful sales promotion programs develop from campaignable, ownable "Big Ideas" that extend over a minimum one-year period and more often, span several years. The promotion becomes intricately entwined with the brand or service by enhancing its image.
Think of the airlines' frequent flier programs that have been on-going for several years. Each year, enhancements are added to further entice the frequent flier to remain loyal to a particular airline. At the outset, these programs offered only free airline tickets and upgrades. Now the programs extend to value-added offers for hotels, car rentals, travel packages and even retail goods.
Consumer and Trade Promotion Objectives Are Closely Linked Promotion objectives fall under two broad classifications — trade promotions and consumer promotions. They share similar end goals but differ as to who is incentivized and how.
Trade promotions are targeted at the middlemen — those responsible for getting goods and services from a manufacturer into a retail establishment.
Trade promotions "push" product into the store, onto the shelf or on display and are therefore termed push strategies. Consumer promotions, on the other hand, are those programs targeted at the end consumer or purchaser. Accordingly, consumer promotions are termed pull strategies since they literally motivate the consumer to "pull" the product off the shelf or display and out of the retail store.
In addition to motivating trial, consumer promotions can build demand, build brand awareness, generate an impulse buy and even motivate multiple purchases. Various consumer-directed tactics are employed to encourage this type of buyer action. The list of consumer-directed tactics include coupons, refunds, rebates, sampling and free items to name a few.
POP displays serve as a bridge connecting trade and consumer promotions. The most powerful offers are those delivered directly to consumers in the retail environment, that is, at the point of purchase. Well-constructed and attractive display units — temporary or permanent pieces — showcase products for easy shopping for consumers with coupons in hand. A wooden rack filled with wine bottles and free recipe booklets suggesting which wines complement various foods help consumers plan meals. And if this rack is strategically placed near the meat section, the consumer need not search the store for ingredients.
When trade and consumer promotions work in tandem, the push and pull efforts reach a state of equilibrium. The trade incentives ensure that the right products are at the right place at the right time. The consumer incentives deliver motivated buyers to purchase the products. Together, these efforts ultimately deliver against the corporate objectives.
