Volume 16, Number 3 Article by Sonal Kureshi & Preeta Vyas September, 2004
Joint Sales Promotion: Prospects and Issues :
Sales promotion, a short-term inducement offered to a consumer or trade has gained momentum as a promotional tool the world over. With the present levels of competition, managers are being pressurised to pool resources and show results within the constraints of tighter budgets. Increasing clutter and media costs have rendered advertising less effective and companies have resorted to joint promotions, with intra-company brands or with those of another company to increase sales at low cost.
In an attempt to examine the current practices of joint sales promotions and draw managerial implications for the same, Sonal Kureshi and Preeta Vyas reviewed advertisements for joint sales promotions for one year, in two dailies with a very wide circulation in central India, and analysed the contents.
The content analysis revealed that 'target market commonality' was the prime reason for companies offering joint sales promotion. Other reasons were: to reward and retain existing consumers, to extend the user base, to induce trial of a new product by cashing in on the established brand, to push slow moving brands/models, to counter competitors' offers, to clear inventory, to increase footfalls at retail outlets, to increase visibility and extend reach, and to enhance brand value. Usage of joint sales promotion was most prevalent in the consumer durable category, the free gift being the most common offering. There exists a prospect for using joint sales promotion in the non-durable category. The authors suggest a framework for planning joint sales promotions, which includes carrying out an audit of the brands and products, market and customer characteristics. Identifying a suitable partner, planning and co-ordination are the main issues for a manager wanting to use this tool. Such schemes are possible only if the objectives of the companies involved are not conflicting. Willingness to share information is critical.
Reprint No 04302
