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Belch: Advertising and
Promotion, Sixth Edition
V. Developing the
Integrated Marketing
Communications Program
16. Sales Promotion © The McGraw−Hill
Companies, 2003
to build databases for future direct-marketing efforts. As marketers continue to shift
from media advertising to direct marketing, promotional offers will probably be used
even more to help build databases. The technology is already in place to enable marketers
to communicate individually with target consumers and transform mass promotional
tools into ways of doing one-to-one marketing. 17
Short-Term Focus Many businesspeople believe the increase in sales promotion
is motivated by marketing plans and reward systems geared to short-term performance
and the immediate generation of sales volume. Some think the packaged-goods
brand management system has contributed to marketers’ increased dependence on
sales promotion. Brand managers use sales promotions routinely, not only to introduce
new products or defend against the competition but also to meet quarterly or yearly
sales and market share goals. The sales force, too, may have short-term quotas or goals
to meet and may also receive requests from retailers and wholesalers for promotions.
Thus, reps may pressure marketing or brand managers to use promotions to help them
move the products into the retailers’ stores.
Many managers view consumer and trade promotions as the most dependable way
to generate short-term sales, particularly when they are price-related. The reliance on
sales promotion is particularly high in mature and slow-growth markets, where it is
difficult to stimulate consumer demand through advertising. This has led to concern
that managers have become too dependent on the quick sales fix that can result from a
promotion and that the brand franchise may be eroded by too many deals.
Increased Accountability In addition to pressuring their marketing or brand
managers and sales force to produce short-term results, many companies are demanding
to know what they are getting for their promotional expenditures. Results from
sales promotion programs are generally easier to measure than those from advertising.
Many companies are demanding measurable, accountable ways to relate promotional
expenditures to sales and profitability. For example, Kraft Foods uses computerized
sales information from checkout scanners in determining compensation for marketing
personnel. Part of the pay managers receive depends on the sales a promotion generates
relative to its costs. 18
Managers who are being held accountable to produce results often use price discounts
or coupons, since they produce a quick and easily measured jump in sales. It
takes longer for an ad campaign to show some impact and the effects are more difficult
to measure. Marketers are also feeling pressure from the trade as powerful retailers
demand sales performance from their brands. Real-time data available from computerized
checkout scanners make it possible for retailers to monitor promotions and track
the results they generate on a daily basis.
Competition Another factor that led to the increase in sales promotion is manufacturers’
reliance on trade and consumer promotions to gain or maintain competitive
advantage. The markets for many products are mature and stagnant, and it is increasingly
difficult to boost sales through advertising. Exciting, breakthrough creative ideas
are difficult to come by, and consumers’ attention to mass-media advertising continues
to decline. Rather than allocating large amounts of money to run dull ads, many marketers
have turned to sales promotion.
Many companies are tailoring their trade promotions to key retail accounts and
developing strategic alliances with retailers that include both trade and consumer promotional
programs. A major development in recent years is account-specific marketing
(also referred to as comarketing), whereby a manufacturer collaborates with an
individual retailer to create a customized promotion that accomplishes mutual objectives.
For example, Coppertone’s promotion agency created an account-specific promotion
for “Spot the Dog Scavenger Hunt” that was based on the iconic Little Miss
Coppertone losing her dog in a Wal-Mart store (Exhibit 16-6). The in-store scavenger
hunt involved having consumers find clues throughout the store, fill in a game piece,
and receive a prize. The game piece promoted Coppertone’s rub-free adult and children’s
spray and included a $2 Wal-Mart–specific rebate coupon. The promotion
resulted in a 6 percent increase in Coppertone sales during the promotion.
Exhibit 16-6 Coppertone
developed an accountspecific
promotion for
Wal-Mart
519
Chapter Sixteen Sales Promotion