A Communications Framework to Evaluate Sales Promotion Strategy

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  • Topic: Sales promotion, Marketing, Promotion and marketing communications
  • Pages : 5 (1597 words )
  • Download(s) : 411
  • Published : August 3, 2008
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1.0Introduction
Sales promotion was largely considered to be a tactical marketing tool in the past, mainly concerned for providing short-term incentives to encourage consumers to purchase/sale of a product or service. However, with the advent of loyalty programs and other sales promotional techniques aimed at brand loyalty thus repeat purchases, sales promotion practitioners have attempted to reposition their discipline due to the increased, intense, competitive environment that many organisations face. Managers therefore must fundamentally understand and evaluate the impact of their promotional strategies. A communications paradigm has four levels:

1. Ability to gain the consumers attention
2. Difficulty level of interpretation
3. Its persuasive capability (describing benefits or specific characteristics) 4. Promotional impact causing purchase intent.
The conceptual framework discussed in the article provides sequences with a brand by creating awareness, communicating the core benefits, promoting trial, and therefore optimistically a supported purchase. And if the consumer becomes satisfied with the product or service, repeat purchases and brand loyalty maybe established (Gardener, Elizabeth, Trivedi, & Minakshi. Journal of advertising Research, May/Jun98, Vol.38 Issue 3, p67, 5p). The four main types of sales promotion strategies that we will be analysing are: Bonus Packs, On-Shelf Coupons, Free-Standing Inserts (FSI) coupons, and On-Packs promotion. 2.0Sales promotion strategy definition

The Association of Promotion Marketing Agencies (APMA) introduced the following definition of promotion management: "the strategic and tactical marketing planning and execution for a brand using the full mix of business and communications designed to work in concert to influence behaviour in ways that build sales and reinforces brand image". Sales promotion strategies are actually a subsidiary of the overall Integrated Marketing Communication (IMC) mix. In spite of the pivotal role played by sales promotions, however, research within this area appears to offer little by way of oversimplified conclusions. Thus, while promotional impact has always been a topic of great interest to managers and researchers alike, there has been a somewhat disconcerting disparity in research findings (Gardener, et al. 1998). Some researches have discovered that consumer satisfaction with a promoted brand leads to increased repeat purchasing even after the promotion has been withdrawn (eg., Rothschild and Gaidis, 1981), while other research results suggest that consumers revert back to the pre-promotion behaviour (eg., Bawa and Shoemaker, 1987).

3.0Framework to evaluate promotions
The article presents a framework that has been designed to assist managers in evaluating the effectiveness of their promotion strategies. There are four primary promotional methods that companies use to demonstrate the use of the framework. These are FSI (free-standing inserts) coupons, on-pack promotions, bonus packs, and on-shelf coupon dispensers. Each method is evaluated in terms of its ability to communicate at each of the levels in the communication paradigm. Though since the articles publication in 1998, there have been new sales promotion strategies introduced. Some of which include:

Sales Promotion

However this article specifically discusses the previous four methods and how managers can evaluate there promotional influence.
3.1Free-Standing Insert (FSI) coupons
FSI coupons have been used as major promotional tools for years as a means of offering the consumer a one-time reduction in price and building brand awareness and loyalty as well (Gardener, et al. 1998). A generation and a half has grown up on coupons and considers them a valuable method to manage their budget. FSI coupons are distributed to mass audiences-traditionally disseminated to consumers through the 'Sunday paper' but now FSi's can be specifically channeled through various...
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