A Communications Framework To Evaluate Sales Promotion Strategy

1.0 Introduction

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.

2.0 Sales 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).

3.0 Framework 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.