Business Strategies in a Complex Environment: Prices and Promotional Activity

At present, this strategy is very sensitive not only because it is valued significantly by the end consumer, but also because it is a source of confrontation between manufacturers and distributors.

1. To integrate the price and promotional policy decisions in a department as a way to manage more efficiently

This will enable more prepared resources, to facilitate the dialogue with the other party, to better manage the analysis tools and to work with more information to provide more accurate conclusions on the buyer’s behavior.

Pricing strategies should not consist of an automatic annual increase based on variables such as CPI. This creates very strong points of discussion among manufacturers and distributors.

It is necessary to reconsider the offer price because the consumer will punish us immediately if what we offer does not help him.

Besides taking into account variables such as the manufacturer’s and the retailer’s margins, production costs, distribution and marketing, brand strength, it is necessary to consider other variables such as the elasticity of both the brand and the item in question, buyer’s knowledge of the chain and role of the brand or reference within the category.

It is possible that the prices may rise at a time different from the beginning of the year and that some references should keep the prices and others should increase by a significant percentage or even that minor increases may arise several times throughout the year.

 

2. To create promotions tailored to the consumer and the buyer

To understand the purchase parameters at a point of sale is critical to design more efficient promotions. These promotions are those which reach the selected consumer segment and provide more return on a much more controlled investment.

To rely on loyalty card information and studies of buyers at a point of sales is key to design this promotional activity.

Again, this cannot be done without the close cooperation among manufacturers and distributors.

 

3. Analysis of promotional results

If we enter the dynamics of sharing the business we manage, a critical activity in the promotional field is the analysis of the results obtained and decision-making based thereon.

To conduct analyses, at least quarterly, would be desirable to evaluate the promotional impact

The conclusions drawn must be accompanied with performance decisions relating to redoing or eliminating the action, changing the design or the performance of subsequent actions, redirecting the investment towards variable instead of fixed costs, tailoring the promoted items to the promotion typology and the buyer’s knowledge, changing the responsibility for design or implementation.

This involves automating the promotional analysis by focusing it as another phase of the promotion process, ensuring the necessary information to do it and developing the tools to carry it out.

 

Go to Business Strategies in a Complex Environment (introduction)

Go to Excellence in Sales and Implementation

Go to Shopper Marketing

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