Sales promotion 477
themselves in high-profile legal clashes with the
Customs and Excise Service over VAT
payments on sales promotions.
8 Fulfilment problems. Every year, between 200
and 300 promotions result in complaints to
the Advertising Standards Authority. Around 90
per cent of these are upheld for breaching the
Institute of Sales Promotion (ISP) Code of
Practice. About 20 per cent of all such
problems are not related to the sponsor, but
lie with the handling houses which oversee the
logistics of fulfilment.
Promotions encounter such problems because
they usually do not enjoy the rigorous planning
and control afforded to advertising campaigns.
Time pressure and a tendency for the imple-
mentation and evaluation of promotions to be
delegated too far down the organization con-
tribute to this situation, which was summed up
in a classic article by Roger Strang (1976)
entitled ‘Sales Promotions: Fast Growth, Faulty
Management’. Most promotional pitfalls can be
avoided by:
Greater attention to the promotional planning
process detailed in Figure 18.3.
Addressing the type of common sense
questions contained in the ‘compete using
promotions’ checklist (Table 18.3) while
planning the promotion campaign.
Adhering to the ISP Code of Practice.
There are also indications that sales pro-
motions are becoming more effectively man-
aged as the industry matures. American
companies now spend over $1 billion annually
on research related to promotions according to
US promotion industry figures.
The future of sales promotion
One golden rule of promotions management is
that overuse of any technique will blunt its
effectiveness. Innovation and creativity are key
success factors, and recent advances in packag-
ing and information technology have provided
many exciting new ways to offer customers
extra benefits.1 High-tech coupons. These may make coupon
clipping a thing of the past. Sinfonia Marketing
Systems in France has introduced the
Promocarte, a smart card which can hold and
automatically redeem coupon information
based on previous purchases. Instant Coupon
Machines are now being used in branches of
Somerfield, Budgens and Safeway, and are
claimed by their makers to raise brand sales by
an average of 184 per cent.
2 EPOS systems. These allow the banding of
products in a logical rather than a physical
sense. Safeway’s ‘Linksave’ and ‘Multisave’
promotions involve the EPOS system
identifying and refunding the price of the third
instance of a ‘buy two get one free’ product,
or automatically refunding a ‘piggyback’
purchase. This removes much of the
repackaging and logistical costs previously
associated with product-based promotions.
3 Packaging innovations. Increasingly versatile and
novel sample packs or encapsulations are now
used in letterbox drops or attachments to
products and magazine covers. Jacob’s ‘Fridge
‘em to Win’ competition used thermochromic
ink (which only showed the win/lose message
when chilled) on the wrapper of each Club
biscuit to encourage users to buy and
refrigerate them during the traditionally slow
summer period. Initial results showed a 48 per
cent increase in sales volume.
4 Customer database systems. Marks & Spencer
were pioneers in establishing a central
marketing database through which all sales
promotion campaigns could be managed. This
allows the generation of effectively targeted
direct mail campaigns, and the accurate
measurement of each campaign’s results. The
US Fairmont Hotel chain’s computer network
analyses the habits of regular business
travellers. This ensures that, wherever
travellers stay, their tastes in everything from