Sales promotions are ideal for temporarily increasing sales of FMCGs and durables, but can they also be used strategically?
Soft drinks like Pepsi continuously come up with promotions like, “Mera Number Aayega”. Indeed, some market categories, such as chocolates, ready-to-eat foods and personal care products, are almost totally driven by sales promotion. Are the marketers of these products caught in a trap, afraid to get off the promotional merry-go-round? Can sales promotion actually be used in a long-term, strategic way to build brands and not just temporary increments in sales volume?
Creating a brand is a time-consuming process because it involves organizational commitment and orchestrating the resources in the right manner and channel for building the brand’s image in the mind of consumers. In other words, branding creates predictability. It’s about creating a relationship with consumers. What the brand does today should help you anticipate what it will do tomorrow.
Promotion, on the other hand, is a short-term phenomenon. ACT NOW is the definition of sales promotion; tomorrow will be too late!
Whether it is price reduction, larger packaging, a tie-in with another product, a coupon or some other incentive, it is temporary. Does this mean that you shouldn’t run promotional campaigns? What should happen is this: Promotions should help build a strong brand.
Building a brand works towards building a strong consumer base. Think beyond coupons, giveaways and free trials! Sales promotions can attract a different audience and encourage people to try a product for the first time. You have the opportunity to influence people’s perceptions of a brand, and then, through on-going activity, retain those customers.
Marketers must recognise where sales promotions fit into the marketing mix and what goes beyond the promotion. There should be a synergy between brands and promotions.
Think strategically. Have the right kind of promotion for your brand! Think beyond coupons, giveaways, and free trials! At the same time, keep building your brand using other elements of the marketing communication mix. For instance, when Onjus was introduced, sampling along with consumer interaction was used as a promotional campaign. (They asked consumers to exchange two oranges for a free pack of the drink).
Formalise the promotion planning process to include a rationale for its existence and the timing of each promotion. Promotions are not tactical tools. Promotions reinforce what the brand stands for in the consumer’s mind. What the brand “communicates” should be synchronised with what the marketer wants consumers to think about the product.
Sales promotion is used not only for products or brands; it can be extended to technology and service. Samsung launched a scratch-card promo for its CTVs in June 1999. Thums Up used the same strategy. What differentiates the promotions is the industry? One was in the durable sector, which was aimed at growth. The other was in the FMCG sector, with the aim of increasing short-term sales.
What should an ideal promotion result in? Should the emphasis be on increasing short-term sales or on building the brand in the long run? A promo needs to have a short-term impact synchronised with brand-building efforts. Britannia successfully managed to increase sales by 20 per cent, and at the same time, the brand was built around the promo during the World cup.
The question still remains: “What makes a winning promotion?” Applying experience from past campaigns? Not necessarily, but also the fact that the promotion has actually helped in getting the brand off the ground. Promotions cannot go on forever, but at the same time they can help in building a bond between consumers and brands.