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What has been the most interesting sales promotion you have engineered so far?
We do use promotions to increase our market share or shore up the month's sales, but not as a core tenet to grow our business. At the time of the launch of a new product, for example, the strategic reason of promotions is to drive trials. In the food category it is especially important as the model essentially works along the lines of high trials followed by repeat buying. The sooner the trials, the better your purchase.
An interesting promotion for us, then, has been for our fruit-based powdered drink brand, Tang. Tang is a fast growing brand but still small for us. The promotion was dubbed 'rocketman' and was carried out last summer.
Who did you primarily target with it - new or existing customers or both?
Last year we introduced a thick, pulpy mango version of Tang, a first for the brand in any country. This summer we rolled out a wet sampling initiative for this variant. The nature of the initiative ensured that the consumers targeted were not categorised as existing or new. It worked across the board. With this promotion, our target customer was anyone who walked into stores to purchase - among other things - cold refreshment beverages during the summer season.
What kind of promotion was it?
The product category in which Tang operates is such that it is usually not particularly on a shopper's grocery list when she enters a store. But what we found is that anyone who tries a glass of Tang was more likely to purchase it.
The reason we called the promotion the 'rocketman promotion' was because the way our representatives were dressed up for the initiative. They were carrying on their backs five-litre plastic canisters filled with pre-mixed, ready-to-drink Tang, ready to drink. This was the first time we undertook such a sampling exercise for Tang in the country.
Why was it designed so?
The idea behind this exercise was to give consumers a quick taste of the drink rather than depend on them to prepare it after getting hold of a pack. The 'tanks' gave our representatives mobility, rather than have them depend on the consumer finding her way to some corner of the store where the booth is set up.
What were the challenges?
We had to make sure that we had the right partnerships with the trade outlets, especially the key modern trade players in order to get the maximum return from the exercise. Also, as the beverage had to be prepared inside the store, we had to ensure that factors like right proportions, temperature, hygiene were maintained.
Who partnered you in it?
Our channel partners in modern trade were retailers like Big Bazaar, HyperCity, Walmart, Spencer's, Tesco and Reliance. The promotion was carried out across metros such as Mumbai, Pune, Delhi, Kolkata, Bengaluru and Chennai.
How effective was the exercise?
We mostly carried out this activation on weekends when the footfalls are higher. Our partners actually came back saying that there was a spike in their sales for Tang and hence they would ask for repeats of the activation. For 2013, we had set ourselves a very aggressive target of actually sampling five lakh consumers and we exceeded this by a long chalk.
Don't sales promotions incur high long-term costs for the company?
More than the costs, as I said before, promotions are no way to grow a business in the long run. Especially the food category where the purchase drivers are very different. You can't sustain growth in the category on the back of promotions. What you can do via promotions is increase consumption in the extreme short-term.
Let's take the example of another category, say toothpastes. If you are doing a one plus one free offer, you are loading the consumer up for twice the amount for a certain period. Whereas she would normally takes that time to consume a single tube. What you are doing is blocking off the competition from the second month's purchase. That is a great strategy to take up market share. But it is not such a great strategy from the monthly sales perspective as the sales will stay the same the following month. If you really want to increase your sales you should probably consider ways of telling the consumer why she should brush more often, thereby increasing the quantum of her purchase or give her variants of the same product, say one for regular use, another for tooth whitening, a third for sensitive teeth and so on.
The cost of a promotion depends on how weak or strong your brand offering is. I think the issue is that the cost of a sales promotion can't be borne by every company and at all times of the year. These things cost money and if you do it on a continuous basis, then there isn't much left for brand building. It's a trap that you can't fall into.
FROM THE HORSE'S MOUTH
Tang rocketman
Aim
Drive trials at the time of new launch
Target
Anyone who is in the market for cold refreshment beverages during the summer
Plan
The product category in which Tang operates is such that it is usually not on a shopper's grocery list when she enters a store. We found that anyone who tries a glass of Tang is likely to purchase it. So our representatives were to carry on their backs five-litre plastic canisters filled with pre-mixed, ready-to-drink Tang
Outcome
Our partners witnessed huge spike in their
Tang sales. For 2013, we had set ourselves an aggressive target of actually sampling five lakh consumers and we exceeded this by a long chalk
