Promotional Mechanics

There are a number of different mechanics that can be used: Multi-buys

BOGOF (buy one get one free) and 2 for x to dri e o!ume sa!es " for 2 to dri e bas#et s$end and re%ard !oya!ty

Extra Free

&'g' ""( extra free to re%ard !oya!ty and encourage tria!

Link Promotions

&'g' Buy a sand%ich and a drin# for x to encourage cross category $urchase and dri e tota! bas#et s$end

Banded packs/free product inside

&'g' free mug %ith teabags to encourage tria!

Price promotions

&'g' )*$ off to re%ard !oya!ty and encourage s%itching to higher margin $roducts

On pack offers

&'g' co!!ect $oints+ ouchers and s%a$ for s$ort #it &ncourage !oya!ty and re$eat $urchasing

Samplin

&'g' tria! si,e $roducts or in-store tasting to encourage $urchase of ne% $roducts or encourage s%itching to higher $rice+higher margin $roducts

!hy Promote"
There are a number of reasons %hy retai!ers and su$$!iers $romote: Suppliers#

.timu!ate $rimary demand Fast acti ation of ne% $roduct de e!o$ment &ncourage brand s%itching Bui!d retai!er good %i!! /0it1 interna! short-term targets &ncourage tria! 2ombat com$etition acti ity 2onsumer engagement %ith the brand

$etailers#

&ncourage s%itching from retai! com$etitors &ngagement %ith retai!er brand 3ncrease tri$+bas#et s$end 3ncrease store traffic 4educe in entory 3ncrease ex$andab!e consum$tion

5hi!e $romotions are effecti e at $rom$ting $urchase6 their im$act can be detrimenta! if not managed c!ose!y' They are a cost to a business and can teach sho$$ers to buy on!y on dea! %hich can diminish brand e7uity6 and reduce o era!! category s$end in the !ong term'

Optimisin

Promotional Spend

The fo!!o%ing strategic $romotiona! $rocess has been de ised to he!$ o$timise $romotiona! s$end: Strate ic Promotional Process

1.

Prioritisation The better understanding a com$any has of $romotions6 the more in estment can be o$timised' 3t is im$erati e that su$$!iers #no% ho% $romotiona!!y res$onsi e the category is' The higher the !oya!ty a category has6 the !ess $romotiona!!y sensiti e it is'

2.

Promotional Strate y Before a $romotiona! mechanic is chosen6 there must be a c!ear $romotiona! strategy that meets the aim of /%hat change in consumer+sho$$er beha iour is desired1' This shou!d be in !ine %ith the category strategy and in turn %i!! a!so be in !ine %ith the retai!er1s and su$$!ier1s cor$orate strategies'

3.

Mechanic Selection 3t is im$erati e that the $romotiona! mechanic chosen %i!! resu!t in dri ing the desired beha iour i'e' increase $enetration6 gro% a erage %eight of $urchase6 im$ro e fre7uency'

4.

E%aluation 3t is im$ortant that the $erformance of $romotions are e a!uated to inform future $romotiona! acti ity' The e a!uation stage is not on!y about the financia! im$act but the im$act on sho$$ers shou!d a!so be considered' For exam$!e6 did the acti ity im$act the sho$$er beha iour intended (such as a erage %eight of $urchase)'