Promotion

Promotion is concerned with telling the target market about the right product. A promotion is a direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or the consumer with the primary objective of creating an immediate sale (10). Promotions are aimed at both consumers and middlemen for the purpose of keeping goods moving smoothly through the pipeline. This is accomplished by using a combination of push and pull strategies. A push strategy provides incentives to the middlemen to buy and resell the product, therefore pushing the goods on to the next stage of the pipeline to the ultimate consumer. A pull strategy provides incentives to the consumer to pull the product out of the end of the pipeline at the retailer level. Food marketers should use a combination of both strategies so that the product will flow easily from the manufacturer to the consumer. The ultimate goal of promotions is to induce behavior. Sales promotions refer to promotional activities other than advertising, publicity, and personal selling that stimulate interest, trial or purchase by final customers or others in the channel.

Consumer Promotion. Examples of consumer promotions are coupons, sweepstakes, contests, product samples, refunds, rebates, tie-ins, premiums, bonus packs, trade-ins, and exhibitions. These promotions are directed at consumers who purchase products at the retail level and are designed to provide them with an inducement to purchase the marketer's brand. Consumer promotions are part of a promotional pull strategy and work along with advertising to encourage consumers to create a demand for a particular brand.

Trade Promotion. Trade promotions in the food industry are sometimes known as promotions to the retailer. This term may be misleading as these promotions are targeted to distributors, wholesalers, and retailers. Trade promotions are critical because product cannot be sold to consumers if it is not first sold to the middlemen. Because the average supermarket stocks more than 10,000 items, promotions need creativity to break through the clutter. Trade promotions include activities such as promotional allowances, dealer incentives, point-of-purchase displays, sales contests and sweepstakes, and trade shows. Trade promotions are designed to motivate distributors and retailers to carry a product and make an extra effort to promote it to their customers (push strategy).

One of the most commonly used trade promotions in the food industry is the promotional allowance. These are payments made by a manufacturer to resellers (often off-invoice) for merchandising its products or running in-store promotional programs such as reduced shelf prices, special displays, or in-store advertising. Another common but controversial promotion is the slotting allowance (sometimes known as a stocking allowance or street money). Slotting allowances are the fees that are often demanded by the retailers to gain admission into their stores. The position taken by the retailer is that with increased competition, a proliferation of new products, and small profit margins, they are required to ask for these fees, claiming that they will be used to promote the products, redesign shelves, and reprogram computers. Most manufacturers feel differently about how slotting fees are used. One food industry source estimated that 70% of all slotting fees go directly to the retailers' bottom line (11). Many food manufacturers view slotting allowances as little more than corporate bribery.

Traditionally, food companies have spent more of their promotional dollars on trade promotions than on consumer promotions, in an effort to win shelf space in the midst of a rising tide of new products. Recently, however, expenditures on promotions to consumers have been growing while expenditures on promotions to the trade have been declining slowly. Of the three major areas of a company's promotional spending, consumer promotions, trade promo tions, and media spending, the three-year trend shown in Table 1 has appeared (12).

As an example, Kellogg Co., the world's leading cereal manufacturer, is one of the companies that intends to tilt its marketing strategy away from the trade and back toward the consumer. This comes on the heels of sluggish domestic sales. In addition to Kellogg Co., Kraft General Foods has decided to step up advertising for its Maxwell House coffee, a brand that stopped advertising in 1987 and lost its number one position in the coffee business (13) (Table 2).

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