SALES PROMOTIONS RESEARCH 391Sales promotions research
Sales promotions can be pre- and post-tested. Sales promotions pre-testing is very similar to
advertising pre-testing. Consumers may be exposed to sales promotions ideas, in a focus
group setting or elsewhere, and may be invited to express their opinion about them. However,
since the objective of most sales promotions campaigns is to provoke immediate buying
behaviour, most promotions research will focus on behavioural response measures.
Promotions are essentially aimed at stimulating trial purchase and at increasing sales with
existing consumers. Th erefore, eff ectiveness measures will focus on the evolution of sales
compared with non-promotion periods, or on the comparison of diff erent types of promo-
tions as to their ability to generate extra sales.
When launching a new brand, or monitoring the sales evolution of an existing brand for
which sales promotions campaigns are being used, the following analysis using consumer
panel data can be carried out.^44 It is based on a decomposition of the market share of the
brand as follows:Market share = (Attraction × Conviction × Domination × Intensity)/Shock absorptionWhere: Attraction = Number of buyers of our brand/total number of buyers of the
product category.
Conviction = Number of loyal customers of our brand/number of buyers of
our brand.
Domination = Average volume of our brand purchased per loyal customer of
our brand/average volume of the product category purchased
per loyal customer of our brand.
Intensity = Average volume of the product category purchased per loyal
customer of our brand/average volume of the product category
purchased per buyer of the product category. If the intensity
rate equals 1, the loyal customers of our brand are buying the
same amounts of the product category as the average buyer of
the product category.
Shock absorption = Total purchases in volume of our brand by loyal customers/
total purchases in volume of our brand.Th e defi nition of a ‘loyal customer’ is based on repeat purchase within a specifi ed period of
time. All indicators are measured per period (monthly, bi-monthly, etc.). All measures are
volume-based. Th e attraction rate measures the penetration of the brand and is a measure of
the eff ectiveness of trial promotions. Th e conviction rate gives an indication of loyalty pro-
motions eff ectiveness, more specifi cally the success of repeat-buying promotion campaigns.
Th e domination rate indicates to what extent loyal customers are truly loyal. Th e higher the
domination index, the more exclusively loyal customers are loyal to a brand. It is an indica-
tion of the eff ectiveness of loyalty and basket-fi lling promotions. Th e intensity rate indicates
the extent to which the brand is capable of attracting heavy users of the product category. If
this indicator is larger than 1, the brand is capable of attracting a more than proportional
amount of heavy users. As such, it is also an indication of the basket-fi lling capacity of pro-
motional campaigns. Th e shock absorption index indicates to what extent the brand is vul-
nerable to competitive campaigns. Th e higher the shock absorption rate, the more the sales
are based on loyal consumers, and the less vulnerable the brand is to switching behaviour
caused by competitive actions. In Figure 12.5 , an example is given of the launch of a new
brand of detergent.
Th e eff ectiveness of promotions is oft en assessed by studying the evolution of sales over a
period of time during which several types of promotions have been implemented. By study-
ing the evolution of sales during the campaign, and comparing it with the sales level before
and aft er the campaign, the extra sales volume generated by the campaign can be calculated.M12_PELS3221_05_SE_C12.indd 391M12_PELS3221_05_SE_C12.indd 391 5/6/13 2:58 PM5/6/13 2:58 PM