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Melanie Felgate and Andrew Fearne The use of promotions in retailing has increased rapidly in recent times, yet more often than not promotions are being implemented with an inadequate understanding of which mechanisms are most effective, for which products and for which shopper segments (Felgate et al, 2011). Despite this growth in the use of promotions, particularly in the Fast Moving Consumer Goods (FMCG) sector, consideration of their impact and effectiveness amongst academics has been limited. It has been identified as an important area for future research, as has the greater use of supermarket panel data to provide insights into how different shoppers respond to price changes, including promotions (Grewal and Levy, 2009). Moreau et al (2001) assert that a lack of understanding by retailers about consumer perceptions of promotions can lead to weaknesses in their marketing strategies. Thus, as the use of promotions continues to grow, it is increasingly important to gain a more complete understanding of how consumers actually behave in response to different promotional activities. This paper reports the use of loyalty card data from one of the biggest retailers in the world Tesco - to analyse the impact of promotions. The aim of the paper is to demonstrate how such data can bring significant benefits to retailers and manufacturers when deciding promotional strategies, over and above traditional scanner datasets, which the majority of existing research is based around. While the case study is based on data from the UK, it demonstrates how other major retailers with similar loyalty card schemes (e.g. Kroger in the USA, and Casino in France) could make use of this powerful source of behaviour data to gain a better understanding of the effectiveness of promotions in key (destination) categories. The paper also contributes to the existing promotions literature, through presenting a conceptual framework to test the moderating effect of shopper specific characteristics such as life-stage and region on promotional impacts. 2. Paul W. Farris and John A. Quelch (1987) Spotlights that a number of sales promotions benefits flow to manufacturers and consumers. Manufacturers can adjust to short-term variations in supply and demand and test how high a list price they can charge, because they can always discount it. Promotions induce consumers to try new products and lead to more varied retail formats, such as

everyday low pricing and promotional pricing; for retailers, promotions may increase sales of complementary categories (cake mix promotions may drive frosting sales) as well as induce store switching. They promote greater consumer awareness of prices. They help manufacturer sell more than normal at the list price and adapt programs to different consumer segments. Service marketers also employ sales promotions attract new customers and establish loyalty. Roger A.Stang (1976) indicates that several factors contributed to rapid growth of sales promotion, particularly in consumers markets. Promotions have become more accepted by top management as an effective sales tool; the number of brands has increased; competitors are using promotions frequently; many brands are seen similar; consumers have become price oriented; trade is demanding more deals from manufacturers; and advertising efficiency has declined.

3. Robert C. Blattberg and Scott A. Neslin (1990) Sales promotion is a key ingredient in marketing campaigns, consists of a collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade. Likewise, KusumAilawadi, Karen Gendenk and Scott A. Neslin (1999), observe that sellers useincentive-type promotions to attract new triers, to reward loyal customers, and to increase the repurchase rates of occasional users. Sales promotions often attract brand switchers, who are primarily looking for low price, good value, or premiums. If some of them would not have otherwise tried the brand, promotion can yield long-term increases in market share.