A Communications Framework to Evaluate Sales Promotion Strategies

Elizabeth Gardener
State University of New York at Buffalo

Minakshi Trivedi
State University of New York at Buffalo

In a fiercely competitive marketplace, brand managers strive to understand the impact of sales promotions on consumers in order to select a suitable marketing campaign. Given the increasing importance of such promotions as a percentage of the total advertising and promotional budget (growth from 58 percent in 1976 to 72 percent in 1992, and increasing at a rate of 12 percent per year over the last 10 years), such studies are of significant managerial interest. Furthermore, the issue of getting the most out of each promotional dollar has become an extremely important one as managers study research results revealing that 80 percent of those responding to a promotional offer are, in fact, loyal customers who presumably would have bought the product regardless of the promotion (Levine, 1989). Understanding the enormous impact of promotions on sales and brand loyalty, companies use exhaustive measures in attempting to determine the effectiveness of promotional policy.