Dec 21, 2010

Promotion Effectiveness Through Customers Perspective: Measurements and Improvements

Promotions are used extensively in marketing, and promotional expenditure has been slowly but steadily increasing worldwide over the past few years. Highly competitive market places compel marketers to increase promotional spending; in the USA, fast moving consumer goods (FMCG) Fast Moving Consumer Goods manufacturers invest 25 per cent of their marketing budget in consumer promotions. Despite their diminishing returns, promotions cannot be disposed of, as they are permanent competitive ‘weapons’ for competitors. Moreover, promotional strategies are evolving due to the diffusion of a retention culture among companies with several major competition lines.
The new focus on retention shifts promotions from outside the point of sale to the inside, from mass Media to direct media, from one-size-fits-all to cluster marketing, from traffic building to share-of-wallet building efforts. Promotional plans grow in complexity, as massive adoption of loyalty schemes makes it necessary to integrate continuity promotions with short-term price promotion. Companies believe that customer information is vital source of competitive advantage for them. However, in order to move from mass to information-intensive marketing companies should not dissipate their efforts in many directions, but focus on a few priority areas of intervention, depending on their marketing mix and competitive position. The Promotion
At last the key points that companies mostly adopt to keep themselves on the top-of-mind state in the customers’ mind are as: They use promotions drain increasing amounts of financial resources and become more complex while their returns are diminishing; for companies will therefore strive for ways to improve effectiveness and to obtain additional resources by making loyalty investments pay for themselves from customers perspectives. At the same time, the retention culture and the availability of individual customer information bring customer-specific promotional objectives to marketers’ attention, urging them to rethink generic goals. The discovery of customer heterogeneity and the ability to carefully segment and target the customer base, coupled with efficient direct media such as e-mail, SMS and electronic coupons, create conditions to expand the variety of promotional tools and actions.
In this scenario, a customer-focused approach, as opposed to the current product-focused perspective increases the possibility of measuring promotional effectiveness in three dimensions: 1) objectives, in that not only sales volume and market share effects can be tracked but also increasingly important customer-specific ones. 2) Time, in that promotional effect can be traced for longer periods of time and the fulfillment of long-term goals can be measured. 3) Space, due to geo-marketing analysis, sense can be made of the variability of promotional response in different market.

Latest Tweets about Marketing

Popular Posts