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For many companies,
promotions are the biggest single expense. Understanding the
value and return on promotion spending is imperative. Marginal
gains in efficiency will lead to a significant impact on the
bottom line.
Category
Management
Category Managers face such promotion issues as:
- How efficient are the category promotions?
- Which product promotions have the most impact on
the category growth?
- How can I better optimize promotions for the category?
Sales
Management
Sales Managers
will ask:
- Which promotions worked or didn’t work?
- What is the most appropriate promotional timing and length?
- What was the competitive response to promotional activity?
- Do promotions only attract sales/reward consumers or new
consumers?
Brand
Management
Promotions are great business if they increase consumer sales.
Generally, a product is sold to retailers at a discount to
help fund the promotion. If there are no additional sales
as a result of the promotion, the discounted stock sold to
the retailer has been of no real benefit. Brand Managers will
want to understand:
- Have sales lifted during the promotional period?
- Did the promotion steal sales from competitors?
- Did the promotion have a long-term impact on consumer
sales?
Consumer
Purchasing Dynamics
In order to understand consumer purchasing dynamics as they
relate to promotion effectiveness, key issues will include:
- How responsive are consumers to promotions?
- Did sales increase based on advertising?
- How does the length of a promotion influence its effectiveness?
Strategic
Planning
Ensuring that promotional funds are optimally allocated to
maximize return is an essential element of strategic planning.
Key questions include:
- How effective are our promotions?
- For which brands is advertising most effective?
- What is my ROI for promotions and advertising?
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