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Why has promotional marketing gained so much credence amongst marketers in modern times and especially in the past two decades?

Promotional Marketing can be defined as a strategic and tactical planning program and the attendant execution exercises for a brand, using the full mix of business and consumer communication methods. It is designed to influence behavior in a way that builds sales and reinforces brand image. In effect, it is any marketing communication containing a reward, economic or experiential, which motivates a specific action by the target audience during a defined time period; clearly, it provides the reason to buy now. This broad field includes gifts and premiums, valueadded offers, consumer contests, point of purchase (P-OP) displays, event marketing, coupons, loyalty programs, sampling and in-store marketing. It is pertinent to note that promotional marketing is not about freebies. It is a battle for the consumer's mind and heart. With rising competition and increasing clutter in the traditional advertising media, more and more companies are now taking to promotions as part of their overall marketing strategy in a bid to create brand differentiation.

How is promotional marketing different from any other form of advertising? If advertising in any medium- brings awareness of a product, then promotional marketing goes a step further in demanding a call for action. Advertising differs from consumer promotion in that advertising gives consumers a reason to buy a product whereas consumer promotion gives consumers a reason to buy a product now! Though the former is very important in todays scenario, it is not enough to trigger sales. On the other hand, promotions do not just reinforce brand behavior. They also drive sales. They encourage the experience of a product or a service in a highly cluttered market. In such a scenario, there is only so much that traditional, above-the-line advertising can do. Advertising, over time, persuades consumers to buy products versus the competitions products by both creating an appealing image for the brand and communicating the brands positioning, (unique) point-ofdifference, and key consumer benefit. Conversely, consumer promotion provides an immediate, added-value incentive to buy a product now over and above the basic brand benefits. This incentive may be price or nonprice oriented.

Industry Size
The promotional marketing industry in India (not including film marketing) has been doubling every year for the past few years. The industry grew upto Rs 500 crore in 2004, shot up to Rs 1000 crore in 2005 and should easily grow to about Rs 8,000 crore by the end of the decade. More than 700 companies are engaged in such marketing activities around the country attesting to the widespread acceptance and adoption of promotional marketing. With the advertising industry in a recession globally, promotional

Why Promotional Marketing ?

Why has promotional marketing gained so much credence amongst marketers in modern times and especially in the past two decades?

marketing has been growing worldwide. The promotional marketing industry in the US has grown from about $98 billion in 2001 to $233 billion in the year 2002. Currently, the US promotional industry is easily worth over $500 billion. In Australia, the mass media spend was A$9 billion in 2001, while the spend on promotional marketing during the same period was A$24 billion. Promotional Marketing has taken up the marketers challenge and evolved from a short term, volume building, and tactically based discipline into a strategic range of communications options resulting in sales generation. Worldwide, promotion marketing has eclipsed advertising in developed as well as many developing countries. In India too, consumers love promos. Intelligent marketers are using their budgets creatively, combining advertising and promotions.

Caveats
One has to realise that sales promotions are a range of marketing objectives, not sales objectives for a definite period of time. Over the past three to four years, it has been discovered that while promotional marketing boosts sales during the promotion phase, these drop considerably as soon as the promotion is stopped. Hence, this is not an effective strategy for brand promotion in the long run. Also, the promotion has to be a clear brand-fit; in other words, it has to reinforce brand values. The promotion should be utilised to fulfil clear strategic objectives, needs to be innovative to create excitement and also requires marketing support to create awareness among the target group. This means if, for example, a brand of tea is giving a face cream as a freebie, it does little to create value for the tea brand. Freebies can build brands if they are a logical extension of the

product/service offering. Also, one must keep in mind that the market segment being targeted must desire the offering. Whirlpool's association with Ariel for its washing machines makes for a good brand fit example. In the case of freebies for instance, if there is no brand-fit, then the problem of debundling arises, where the freebies are sold separately from the product. In fact, seven out of 10 promos suffer from this problem. Too many promotions can be detrimental to the health of a brand. A brand, which is perpetually on priceoffs, would not only lose key brand attributes but also consumer interest. The consumer's reasoning being `if a product is cheaper now, does it mean I was being overcharged earlier'? Similarly, if a brand is always doling out freebies, sales would be affected when there are no freebies on offer. The rule need not apply to every market segment, though. For instance, promotions at McDonald's serve as a constant reminder to kids that it is a great place to come and eat. However, no matter the market segment, for any promotion to be successful it has to be a part of an overall marketing strategy and not a one-off salesdriving initiative. The advantages of promotional marketing are manifold ranging from a shortterm rise in sales to increased trials and sampling. Sometimes, companies also use promotions to address a specific objective. For example, during every cricket season, Pepsi routinely releases promotional ads featuring cricket stars. A brand like Mountain Dew stands for exhilaration because they routinely hold adventure sport events like bungee jumping, rock climbing etc. Going by its popularity and widespread acceptance, promotional marketing is here to stay. As the number of brands in the Indian market

grows, product differentiation will become a challenge and this differentiation will come from the experience each company provides through these campaigns.

Generate awareness and trial for a new brand. Stimulate re-trial. Encourage repeat purchases Generate purchase continuity.

Long-Term

Consumer Promotion Cant Dos

Overcome core brand problems. Pricing - Product Quality - Packaging Product Performance Fix weak brand positioning. Compensate for inadequate levels of or inferior advertising executions. Reverse a long-term, declining sales trend. Generate on-going trade feature and display support.

Provide alternate usage suggestions. Stimulate trade-up to larger sizes. Temporarily adjust pricing. Defend against competitive activity. Excite the sales force. Source: A White Paper by Kidstuff Promos & Events

Short-Term

Consumer Promotion Can Dos

Increase sales. Build market share.