460 The Marketing Book
promotions (generally a high cost activity) as
the main tactical weapon’.
Such indictments, published in leading
journals, have helped to prejudice many man-
agement academics and some practitioners
against promotions. However, it is worth
remembering that many of the most outspoken
critics (Jones included) are former top advertis-
ing practitioners. Advertising Hall of Fame
member David Ogilvy’s view is that: ‘The
manufacturer who finds himself up the creek is
the short-sighted opportunist who siphons off
all his advertising dollars for short-term pro-
motions’ (Ogilvy, 1985). It is also worth noting
that much of the criticism, including Jones’s, is
based on an assumption that ‘in most circum-
stances, promotions mean price reductions’.
The reality is that sales promotion needs to
be understood for what it is – a diverse and
versatile marketing toolkit, in which the major-
ity of tools emphasize creativity over simple
economics. The different promotional tools
vary in terms of:
1 Their targets(see Figure 18.1). ‘Push’
promotions target marketing intermediaries,
supporting the selling effort to get products
onto retailers’ shelves, while ‘pull’ promotions
target consumers and complement advertising
in persuading them to pick products off the
shelves again.
2 Type of benefits offered. One fundamental
distinction is between value-increasing and
value-adding promotions. Value-increasing
promotions alter the product/price equation
by increasing the product quantity or quality,
or decreasing its price. Value-adding
promotions leave the basic product and price
intact, and offer something different in terms
of premiums (free or self-liquidating),
information or opportunities. The benefits can
be instant (scratch-and-win competitions),
delayed (postal premiums) or cumulative
(loyalty programmes).
3 Product/market suitability. While canned beers
favour ‘13 per cent extra free’ offers, or
on-pack competitions and coupons,
unpackaged draught beers require special price
evenings, gamecard competitions and
promotional merchandise catalogues.
Promotions also vary in their popularity and
suitability internationally between countries
(Huff and Alden, 1998). In Japan, redeeming
coupons at point-of-sale is considered
embarrassing, and so competitions are the
most popular promotional tool there.
4 Consumer appeal. Consumers like extra
benefits. In the USA, 70 per cent of consumers
now hold at least one retailer loyalty card, and
over 80 per cent use coupons. However,
different types of promotion appeal to different
people. Research by Gallup and numerous
sales promotions agencies suggests that our
age, sex, nationality, socio-economic grouping
and ethnic origin can all influence which
promotions we prefer.
5 Marketing capabilities. Free samples are
obviously useful for encouraging product trial,
while a prize draw can provide a mailing list
for future promotions.
6 Implementation priorities. While printing security
is important for gamecards, accurate
redemption forecasting is vital for coupons and
giveaways, and anticipating competitor reaction
is important in price promotions.Space constraints prevent a detailed discussion
of each technique, but Table 18.1 provides
examples and notes on some of the most
popular forms of consumer promotions.
Academic research to develop a clearer
understanding of promotion has taken time to
emerge. Between 1965 and 1983 there were only
around 40 academic studies published about
promotion (Blattberg and Neslin, 1990). This
compares to over 200 studies of promotion
published between the mid-1980s and the mid-
1990s (Chandon, 1995). Despite the increase in
the amount of research, nearly all of it has
remained focused on value-increasing tech-
niques such as couponing. There have been
relatively few studies, such as those by Chan-
donet al. (2000) or Peattie et al. (1997), of value-
adding promotions.