Promotions can broadly be classified into two types –
Consumer promotions and Trade promotions Both sales as well as marketing are allotted their respective budgets to carry out promotional activities. While marketing department uses its budget to run ATL and BTL activities, it also utilise it to run consumer promos targeted on a specific brand. Sales department on the other hand uses its budget to run trade promotions. Trade promotions may, and in fact should, vary from outlet to outlet within the same locality but consumer promotions tend to be homogeneous and would at least cover a region as big as a state. Consumer promotions are intended to reach the final customer. To ensure this happens there needs to be some change in packaging or it needs to be supported through ATL and BTL activities so that the consumers do get the promotion. Hence involvement of brand managers is a must over here. Trade promotions need to be designed differently for different channels (grocery, consumption centre, cosmetic store, chemist, bakery etc.). Almost all the companies are moving to a phase where they would have targeted trade promotions at the outlet level which would vary not just by the channel but also various factors like purchase history of the outlet, merchandising input provided by competition, etc. There a various types of promotions and the number are limited only by one’s own imagination. Each one serves a different purpose. One should try to view it from a product life cycle point of view.
New launch - Introductory pricing discounts, Activation, Free complementary products Growth - Short term rejuvenating promos just to ensure no decline in brand recall. Focus on developing association with specific occasions or elements. Some categories see promos intended to encourage repeat purchase Maturity - Launching new variants or leveraging the brand to help other brands in the portfolio (by giving them free with the existing brand to ensure...
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