Getting to grips with promotions
Kieran Killeen reviews a book which claims to document what makes sales promotions work

Price promotions don't work. That's a big statement from Roddy
Mullin and Julian Cummins in their new book Sales
Promotion (4^th edition), subtitled ‘How to create, implement and
integrate campaigns that really work' and
published by Kogan Page.

The authors attribute this price
promotions don't work claim to the fact that trading in the UK over the Christmas period 2006
was disastrous – the worst since records began in 1986. Figures indicate both a
small volume decrease of 1.8 per cent in January over the previous month and a
discounting of 33.7 per cent on goods sold in January over December: In other
words, discounting, even at that level, did not encourage consumers to buy.

But where do price promotions
deliver for a client and at what stage of a product life cycle? Surely they are
most appropriate at the launch stage as a trial mechanism, or at the declining
stage as a way of propping of a brand's faltering volume? The definition of
sales promotion needs to be re-defined, as far too often it has been a dumping
ground for everything un-sexy in brand marketing.

Sales promotion was originally
based on a “pile them high, sell them cheap” philosophy and ideally that's
where it should begin and end. There are few practitioners in marketing today who
are not interested in building brand equity and this is where the need for a
re-focus of definition is required.

Academics and practitioners should
remove the term ‘sales promotion' from their vocabulary, unless they are
talking about trade demanded price promotions and move towards selling the
benefits of promotional marketing. Interestingly, the book avoids
any reference to “measurability” and instead focuses on accountability. Does
this sound apologetic?

The authors suggest that far less accountability is undertaken in sales
promotion than in other fields of marketing. They put this down to individual
promotions seldom having the budgets that justify an additional amount for
marketing accountability; promotions can in often be measured by sales results
and there is often not the time to define success, set a KPI, measure and
evaluate accountability before the next promotion is due.

It reinforces the argument that sales promotion is a trade-related
activity as it is within the confines of a store environment that the task of
evaluating its activity is somewhat simplified. This is true when traditional sales
promotion strategies are adopted. Promotions should not be measured just by
sales results unless this is the only objective of the programme.

Understanding the strategies that sales promotion can deliver on
is essential. I would argue that there are only four strategic objectives that
sales promotion can achieve and they are trial, re-trial, upsizing and loyalty.

The first three points are measurable, but it is not wholly
relevant to measure loyalty as it does not
necessarily occur within a short time scale. Loyalty can take many months to manifest
arising from periods of prolonged usage.

On some occasions re-trial is also difficult to measure, as there
is a presumption that the consumer is a lapsed user and in many cases re-trial
techniques offer a discount off a second purchase at a later date.

FRUITY FUN Tango is one of the case studies included in the latest Sales Promotion book. The authors claim creating awareness is one of 12 aims which clients cannot realistically attain through sales promotion. But creating awareness is really a task for ads such as Tango’s Orange Man TV commercial.

This view differs from that expressed by the authors who suggest
that any one of twelve strategic objectives can be addressed using sales promotion
initiatives. Thankfully, they confirm that only one strategic objective can be
addressed per programme of activity and too often client briefs are laced with
fantasy and faint hopes which are immeasurable and impossible to deliver. For
what it's worth, here are the 12 points as outlined in the book:

1. Increasing volume (imagine a client seeking a decrease in volume!)
2. Increasing trial
3. Increasing repeat purchase
4. Increasing loyalty (is this not the same as No.3?)
5. Widening usage (is this not the same as No. 2?)
6. Creating interest (how do you measure that?)
7. Creating awareness (is this not the job of advertising?)
8. Deflecting attention from price
9. Gaining intermediary support (is this not a tactic?)
10. Discriminating among users
11. Restoring brand perceptions and deflecting attention from complaints after operational mishandling of customer accounts (ehhh, what? Surely this is a broad marketing requirement and does not fall into using sales promotion as a “plaster over the cracks” device).
12. Retaining brand perception on service failure (now, I'm really lost!)

Shortfalls aside, this book is full of some great case studies and
it does seek to build on the fact that there really is a strategic need for
sales promotion activity on the basis that it offers an opportunity to brand
build in a manner which depends on engagement with the consumer base. It is a
good read for all marketers who recognise that integration is critical to long
term brand health.

Kieran Killeen (kieran.killeen@marketingnetwork.ie) is managing director of Marketing Network