Efficient promotion

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The term Efficient Promotion (EP) means efficient sales promotion. Alongside Efficient Replenishment , Efficient Assortment and Efficient Product Introduction , it is one of the basic strategies of the ECR concept ( Efficient Consumer Response ). Cooperation between trade and industry is intended to enable a faster and more effective response to customer requests

Concept and objective

Efficient Promotion as a basic ECR strategy aims to eliminate inefficiencies in sales promotion and the stockpiling of larger quantities of goods at promotional prices (forward buying). EP includes the optimization of sales promotion through sales-specific use of promotional instruments and efficient coordination between trade and industry. In doing so, the clout of one's own sales organ and that of the sales agent should be increased and, in doing so, support the customer's wishes as much as possible.

Implementation of EP

In order to carry out a successful joint sales promotion, a structured approach is required. The following scheme is ideal and requires an adaptation of the respective cooperation, since the factors in the implementation can be very different in practice. Only aspects are explained that can be relevant to practical implementation.

1. Goal determination

The common goals are determined taking into account the role of the category (profiling, routine, addition, season). Despite possible target divergences (see conclusion), target values ​​can be found that are in the mutual interest of both partners. Promotion goals can be higher consumption, acquisition of new customers, higher customer loyalty or a higher level of awareness. During the practical implementation, the content, extent and time reference should be clearly and precisely defined

2. Doctoral selection

Various forms of promotion such as price campaigns, special products, events, etc. are available to achieve the agreed goals. When assessing the sales promotion, effectiveness or efficiency factors can be used.

3. Differentiation and implementation of the doctorate

During the implementation, placement and personalization have a central influence on the wastage of the promotion. The question of placement deals with how the customer should get in touch with the promotion. A doctorate based on the watering can principle usually does not lead to the desired success [1]. The sales promotion must be personalized. One example is the US retailer Mega Foods, where the customer identifies himself with his customer card before making a purchase and receives a series of offers that are only of interest to him.

4. Investigation

A success control through a target / actual comparison is an important component in order to be able to eliminate sources of error in the future.

Use

Studies show that a cooperative approach to planning and implementing sales promotions is more profitable than the conventional situation in which trade and industry work separately. This results in a variety of advantages. For example, through coordinated joint sales promotion concepts for product groups or products, there is no longer any duplication of work, and better timing saves time and money. The joint testing and analysis of the most diverse actions enables the most effective technology to be selected and thus facilitates future planning. For the manufacturer, this means a decline in promotional goods (forward buying). and therefore a more precise planning basis. The retailer can drastically reduce the inventory and thus reduce the capital tied up.

Conclusion

40 percent of the realizable savings through ECR can be realized through EP alone, but little attention has been paid to this component so far. This may be due to the fact that there are often conflicting goals between trade and industry.

It is generally only recommended to carry out DP projects if the companies involved have already gained relevant ECR experience. The five central starting points of EP are the integrated sales promotion campaign, the application of efficient sales promotion campaigns, systematic success monitoring, reduction of campaign volumes in the supply chain and permanent low price strategy. Ultimately, however, it must be said that only a complete application of all four strategies can lead to the success of the ECR concept.

See also

literature

  1. ^ M. Bruhn: Marketing. 5th edition. Wiesbaden 2001.
  2. ↑ a b c d e K. Fuhrmann: Planning and control of promotions. Johann Wolfgang Goethe University, Frankfurt am Main 2003.
  3. ↑ A. Busch, W. Dangelmaier (Ed.): Integrated Supply Chain Management. 2nd Edition. Wiesbaden 2004.
  4. ↑ a b c d e f g h A. Von der Heydt (Ed.): Handbook Efficient Consumer Response - Concepts, Experiences, Challenges. Munich 1999.
  5. ↑ a b c d G. Weiche: Efficient Promotion in Online Trade. In: G. Bergmann: Working paper on systematic marketing and management. No. 11, Siegen 2003.

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