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Part Five Developing the Integrated Marketing Communications Program
Belch: Advertising and
Promotion, Sixth Edition
V. Developing the
Integrated Marketing
Communications Program
16. Sales Promotion © The McGraw−Hill
Companies, 2003
P&G argues that EDLP eliminates problems such as deal buying, leads to regular
low prices at the retail level, and helps build brand loyalty among consumers. Yet the
EDLP strategy has caused great controversy in the trade, which depends heavily on
promotions to attract consumers. Some retailers took P&G products off the shelf; others
cut their ads and displays of the company’s brands. Retailers prefer to operate on a
high/low strategy of frequent price specials and argue that EDLP puts them at a disadvantage
against the warehouse stores and mass merchandisers that already use everyday
low pricing. They also say that some products, such as those that are bought on
impulse, thrive on promotions and don’t lend themselves to EDLP. Retailers rely on
promotions like end-of-aisle displays and price discounts to create excitement and
generate incremental sales and profits from products like soft drinks, cookies, and
candy. 57
Critics of EDLP also note that while the strategy may work well for market leaders
whose brands enjoy high loyalty, it is not effective for marketers trying to build market
share or prop up lagging products. Moreover, many consumers are still motivated
more by promotional deals and specials than by advertising claims from retailers promoting
everyday low prices.
Despite the criticism, P&G says EDLP is paying off and volume has grown faster in
its brands that have switched to the pricing strategy. P&G extended its use of everyday
low pricing to international markets, including the United Kingdom and Italy. 58 P&G
continues to make changes in the way sales promotions are being used by packagedgoods
marketers. The company has taken steps in recent years to simplify its promotional
programs by cutting back on many types of promotions including bonus packs,
premiums, coupons, and cents-off packs. P&G has long been a bellwether for the
packaged-goods industry and its changes with regard to the use of consumer and trade
promotions are likely to create a ripple effect among other marketers. 59
Displays and Point-of-Purchase Materials The next time you are in a
store, take a moment to examine the various promotional materials used to display and
sell products. Point-of-purchase (POP) displays are an important promotional tool
because they can help a manufacturer obtain more effective in-store merchandising of
products. Companies in the United States spend more than $15 billion a year on pointof-purchase
materials, including end-of-aisle displays, banners, posters, shelf cards,
motion pieces, and stand-up racks, among others. Point-of-purchase displays are very
important to marketers since many consumers make their purchase decisions in the
store. In fact, some studies estimate that nearly two-thirds of a consumer’s buying
decisions are made in a retail store. Thus, it is very important for marketers to get the
attention of consumers, as well as to communicate a sales or promotional message,
through POP displays.
A recent measurement study from Point-of-Purchase Advertising International (an
industry trade association) and the Advertising Research Foundation estimates that the
cost-per-thousand-impressions figure for POPs is $6 to $8 for supermarket displays. 60
The CPM figure is based on findings that a grocery store display makes an average of
2,300 to 8,000 impressions per week, depending on store size and volume. Although
this study has shown that POP displays are very effective at reaching consumers, difficulties
in getting retail stores to comply with requests for displays often makes it difficult
for marketers to use them. 61 Moreover, many retailers are decreasing the amount of
signage and displays they will accept as well as the messages they can communicate.
Also, as account-specific promotions become more popular, some retailers are requiring
customized POP materials. For example, 7-Eleven has taken over the responsibility
for the production of all POP materials from vendors—who must still pay for them. The
goal is to give 7-Eleven complete control over its in-store environment.
Despite these challenges, marketers recognize that point-of-purchase displays are
an important part of their promotional programs. Many continue to develop innovative
methods to display their products efficiently, make them stand out in the retail environment,
and communicate a sales message to consumers. It should be noted that the
importance of creative POP displays is not limited to grocery or convenience stores.
Point-of-purchase displays are also important to companies that distribute their prod-