For a regional retailer we prepared propositions for improving promotions – how to reach set goals through promotions
Promotions represent one of the biggest costs for retailers and this is also due to the fact that many promotions do not reach the set goals, and lower income and increase the message complexity. The execution of the promotions thus has an important effect on the already low profitability of the retailer.
A large retailing company with more than €2,000 million income per year wanted to find out how each promotion affects profitability and which promotions reach their set goals.
For different sets of promotions we defined the impact of each element of the marketing mix (placement, price, promotion, distribution) on the sale quantity, sale value, the price and number of purchases, as well as the profitability of the promotion:
• We carried out an in-depth analysis for three types of promotion activities: huge regular promotions, discounts on specific trade groups and activities with suppliers
• For each of the analyzed types of promotional activities we prepared a marketing mix proposition that would enable the retailer to reach its goals more effectively and with fewer costs.
With these activities we clearly showed the client the effect of the promotions on the profitability and in the short term increased the profitability whilst preserving the sales levels.