A Strategic Perspective on Sales Promotions

Gelb, Betsy; Andrews, Demetra; Lam, Son . MIT Sloan Management Review ; Cambridge  Vol. 48, Iss. 4, 
(Summer 2007).

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ABSTRACT (ABSTRACT)
 
While most managers would think long and hard before bringing to market a product that lacked patent protection
and could be easily imitated, many invest in sales promotions sweepstakes, coupons, time-limited price discounts,
free gifts or samples, special events, displays, membership rewards, consumer- directed promotions and so on that
are easier to imitate than the simplest new product. Others sign off on plans so generic that they seem unrelated
to the brand or company offering them, despite the fact that sales promotions may absorb a significant portion of
a companys promotional dollars currently a reported 31% of marketing budgets.

By contrast, a strategic focus considering how customers and competitors will react to any promotional effort, as
well as the message delivered and the stature in the marketplace of the brand delivering it leads to promotions
that defy or delay imitation and yield disproportionate benefit for companies that have already developed a strong
competitive position. The authors suggest that when all these strategic factors are aligned, the result is a
successful promotion, and they illustrate that with successful promotions conducted by General Motors, Home
Depot and Procter &Gamble, among others.

However, the authors caution, such promotional strategies require inventiveness, originality and swift action
qualities neither present nor encouraged in many corporate cultures in which familiarity and predictability are
prized. Managers in such organizations, then, not only must tailor a promotion successfully to its intended market,
they must also skillfully shepherd it through internal barriers. Knowing why, how and for whom sales promotions
will most likely be profitable surely will help in that regard.

DETAILS

Publication title: MIT Sloan Management Review; Cambridge

Volume: 48

Issue: 4

Publication year: 2007

Publication date: Summer 2007

Publisher: Massachusetts Institute of Technology, Cambridge, MA

Place of publication: Cambridge

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 Country of publication: United States, Cambridge

Publication subject: Business And Economics--Management

ISSN: 15329194

CODEN: SMRVAO

Source type: Scholarly Journals

Language of publication: English

Document type: Journal Article

ProQuest document ID: 224961508

Document URL: http://ezxy.ie.edu/login?url=https://search.proquest.com/docview/224961508?acco

untid=27285

Copyright: Copyright Massachusetts Institute of Technology, 2007. All rights reserved.

Last updated: 2018-10-09

Database: ABI/INFORM Collection,ABI/INFORM Global,Research Library

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