ROI, BOGO, and Coupons

Measuring ROI (return on investment) for advertising and marketing expenditures has never been easy. But as budgets and sales shrink, manufacturers continue to look for ways to prove that their promotional tactics are working. Consumer Goods Technology recently analyzed which type of manufacturers have the most success with specific trade promotion strategies. Their findings might surprise you, or at least lead you to adjust your plans.1098655_tag_icon_set

Keep in mind that in the new economy, effective trade promotions require attention to market mix as much as effective consumer promotions require attention to media mix.  The Consumer Goods Technology report found that new product introductions and list price management are most effective in shaping demand in the consumer products industry while promotion management and sales incentives did the most to boost sales in the food and beverage industry.

But what types of promotion work best on store floors?  These days, it’s all about appearing affordable to consumers and different strategies succeed in different retail environments. Check out these numbers:

  • BOGO or buy one, get one free is deemed most effective by 55% of grocers
  • Floor Displays/​Special Packaging/​Custom Products prove most effective in the mass merchant (38%) and warehouse club (39%) sectors
  • Coupons/​In-​store ads worked better (31%) than other trade strategies in drug store channels.

Review your trade promotion mix with your retailers and make sure your tactics are best suited to each channel.

[Source: 2009 Sales and Marketing Report, Consumer Goods Technology, 2009] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.