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Managing promotions

 

Promotions represent one of the key elements of marketing mix that is used by companies to influence the customer in their pursuit of different marketing and promotion objectives, such as providing relevant information to customers, increasing demand and/or differentiating the product. As such they have major potential to influence company's income statement, but organizations often face various challenges within the implementation.

Promotions represent one of the key elements of marketing mix that is used by companies to influence the customer in their pursuit of different marketing and promotion objectives, such as providing relevant information to customers, increasing demand and/or differentiating the product. As such they have major potential to influence company's income statement, but organizations often face various challenges within the implementation.

Highest impact is achieved when clear strategy is combined with coherent promotion management framework and excellence in promotion execution

Promotion management

Optimal promotion strategies take into account:

  • Superior strategies: Overall business/marketing and pricing strategy,
  • Market dynamics: competitor's position and their approach to promotion,
  • Characteristics of the sector,
  • Role of each promotion in defining the strategic direction and policies: Directions and strategic choice of promotion channels differ in accordance with promotion role (Traffic generator, Profiling, Profit generator, Category booster).

To ensure coherent promotion management companies should consistently execute all three steps in promotion management:

  • Learning: understanding the key levers of promotional sales and upgrading the promotional model.
  • Planning: defining promotional mix (product, price, advertising, and placement) in accordance with promotional objectives.
  • Evaluating: each promotion is evaluated in terms of two criteria: success (reaching goals) and profitability.

Excellence in promotion execution is ensured with clear execution process of all elements of promotion activities. During planning of promotion activities companies should take into account the burden of employees in back-office processes and through insurance of transparency of responsibility for execution, reduce the possibility of misunderstandings within the organization.

Promotions, as marketing tool, offer great opportunities to companies, but at the same time represent challenges that often demand changes both from company and marketing. Those changes are often reasonable in relation to the potentially huge impact of promotions on revenue and profitability of the company.

For a more detailed insight into the management of promotions, follow the link, where we are publishing entire lecture, originally represented at SOZ, 29.11.2016 by dr. Mitja Pirc.



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