Promotion ROI

Wiktor Miałkowski
Wiktor Miałkowski
22 February 2018

The situation we can see in the attached picture from Rossmann is a common one - the Producer introduces new promotional activities, and the previous ones are still on the shelves.

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The safest version of the promotions are activities based on standard SKU (here it is the promotion of regular gels). Its weakness lies in the fact that you often have to give a discount on the entire retail purchase, and after the promotion, the product goes back to the old price anyway. The second version is a product with an extra free product, i.e. 20% larger. This is very effective, because the product stands out on the shelf (promo flash) and moreover the entire investment of the producer is allocated to the user. Finally, the version with multipacks, which is a mix of 2 previous options, automatically increases the presence on the shelf, but it requires a price reduction on 1 product, and this is accompanied by high prices for co-packing.

It is definitely worth using different promotional activities alternately, but you also need to make sure that you resale. Retailers do the best they can, here the price promotion includes all versions of the gel in individual packages at the same time (regular and 20% extra product).

The problem is that the most cost-intensive 2-pack has become the most expensive for buyers.

TAGS: promo, Rossmann, ROI