More than a Freebie!

Sales promotion factors influencing Brand-building

Everybody wants a deal. As soon as Mrs. Gupta enters the supermarket, she expects a freebie or a price off...

Till recently, sales promotion was a marketer’s tool to increase short-term sales. Today, it has become the channel for brand building, customer retention, and generation of long-term revenues.

Utility of Sales Promotion

Dissonance Reduction: The housewife, who buys one brand of washing machine, may get confused when she hears her neighbour praise a competitive brand. Sales promotions reduce this confusion in the consumers’ mind.
For instance, Hyundai Motor India announced the extension of warranty on all Santros it had sold. This was a promo aimed at rewarding existing customers, for having made Santro their choice.

First Move: Use promotion now or your competitor will! As Al Ries and Jack Trout say “Be the first to enter the consumer’s mind”.
Britannia was the first to launch the now famous promo, “Britannia Khao, Crorepati ban Jao”, centred on the popular TV game show “Kaun Banega Crorepati”..

Jump-start Effect: Sales promotion helps in getting the brand off the ground. A well-planned promo attracts consumers to your brand. The jump-start effect is often used in the retail context. When the consumer enters an outlet, she is attracted by the product being promoted, and ends up buying several other products as well.
Lipton Ice tea being strategically placed between the entrance and the food counters at FoodWorld.

Motivation: Promos leverage the key factors of customer motivation. They can urge trial, keep the consumer coming back for more, or help him switch to the brand being promoted.

Factors of Sales promotion in Brand- building

1. Construct: A “construct” is the way a promo is designed. Promotions should be constructed keeping in mind brand objectives and consumer behaviour. What is the effort a consumer or a dealer has to put in to get the benefits? Does he/she have to return crowns to win a free trip, or enter a contest to win something?

2. Length of the Promotion: The duration should be right! It should not last too long to let laggards in, and also not too short for the early adopters to get a chance to try it out.

3. Rural Promotions: A promo for a rural audience could be completely different from one designed for the urban market. Media penetration is not high in rural areas, therefore promos work well towards building the brand.
Wilkinson Sword India launched a rural promo for its safety blades, the top two prizes being 100gm of gold, and a motorcycle, both on the rural aspirational list.

4. Perfect Timing: The right time is when the consumer has the desire to spend. The turn of the millennium was the perfect launch pad for many urban campaigns. Festivals, occasions, events may be ideal for a rural promo. At the same time, a festive promo must be followed up with a local field level promotion also.

5. Zero Hour Glitches: Let there be no loopholes in the promo! Inventory Depletion should not be a problem. The minute the consumer sees the promo; the product should be made easily available. Bad timing can be disastrous. A leading publication was giving away ten CDs with a subscription. Many of the subscriptions were cancelled because it took more than twelve weeks for the CD to reach the consumer.

What next?: Follow up with other elements of the marketing mix. Brands need to be maintained after the promos also. After a successful promotion:

• Start working on a new campaign.
• Apply the learning gained from the promo.
• Set new targets for the sales teams. After the promo, they would have to work harder to achieve new targets.

Kill the Brand: If brands cannot be sold without a promo, it spells danger! Whether you give a premium or a price-off, it becomes irrelevant in the long run and the result ends up, being only an increase in short-term sales. The promotion should be planned to reap long-term benefits i.e. towards building a strong brand.

A dealer in second-hand cars had to close shop because he was able to attract customers only during heavy promotions. The investment made on attracting customers was not showing any continual returns.

Managing promotions to build the brand should be one of the final objectives. Promotions cannot be looked down as below-the-line advertising. Advertising and promotions now go hand- in- hand. Use one to reinforce the other!

Related Readings:
1. “Boosting sales through new product benefits, promos”; Parks, Liz; Drug Store News; Aug 2000.
2. “Promo Power”; Dobhal, Shailesh; Business Today; Oct 1999.