Promotional programs yes but never without the "4 P's" of marketing

We are taking stock of the situation, and so, in summary, we can say that we should, at this point, have in mind that customer loyalty pathways, as well as the programs related to them, should take on a whole different connotation than what, instead, we are going to find in the market today.
But one of the frequently asked questions is: but then, compared to promotional flyers, should I change anything?
And in particular, what is there to change?

Table of Contents

Before we delve into this topic, we need to talk about something very important, because it underlies all marketing-centric reasoning and, we cannot avoid pointing it out.

We refer to the 4 “P’s” of marketing, which are as many representative levers and which are studied when preparing on the fundamentals.

The marketing mix is that set of variable actions put in place so that a marketing plan, aimed at positioning a product or service in the market, can be truly effective and successful.

This is what is normally called the “4Ps” strategy because 4 are the strategic elements of which it must be composed:

  • Product strategy or product strategy: represents those ideas that show how a product or service can serve a particular purpose, whereby I cause a change in the behavioral styles of people who approach it. Let’s take an example: have you ever heard of Active Cruise Control? It is that system by which a vehicle “notices” the obstacles in front of it and the distance from them, and then slows down or accelerates according to the parameters set in the vehicle, preventing collisions; there, we have explained the great added value of this product, which some cars can mount as an accessory, with an extra charge. Imagine being on Rome’s Grande Raccordo Anulare, or Milan’s ring road, where you are constantly accelerating and braking, but with this wonderful system (I guarantee it because I have it), we can be comfortable driving in those conditions. There, we created the product strategy aimed at solving a problem!
  • Price strategy or price strategy that we put in place when we go to define precisely the continuous selling price of the product; we say that it is an important accessory, which qualifies the driving level and provides high safety standards to the car, so we position it for this at a medium/high price, in view of the fact that it is a high-level option. In this case we implemented the pricing strategy and its positioning.
  • Place strategy or distribution point strategy, which is how we intend to make the product available in the market. We say that we operate through car dealers, as it cannot be purchased separately from the vehicle, so we use car dealer salespeople to illustrate the features of the product, spread the peculiarities and then sell it and …
  • Promotion strategy or promotion strategy , which is precisely represented by all the tools we deploy to reach our target audience. When we talked earlier about dealer salespeople, they will also be part of the promotional strategy because, promoting a product does NOT necessarily mean giving a discount, but rather making it known, just as it is made known by advertising in all its channels (whether television, audio, web, social, etc.), through direct sales, etc.

PROMOTIONAL DISCOUNTING is one of the means by which a product can be promoted.

If then product “X” is constantly found on the flyers of small or large retailers, it means 2 things:

1.Either a company swoons and risks bankruptcy to continuously promote in terms of price its product or service or …

2.Consider these aspects in the price as well so you can then promote it and by meeting the parameters you have given yourself previously, you can then bring value to your cause.

Of the two, definitely the latter, otherwise do you know how many failed companies we would have encountered on a daily basis?

When we go to launch a product or service, we must keep well in mind what we said, just a few lines ago, in order to position ourselves in the market in the way that best suits our goals.

But when should we “push” on the accelerator? When we want to sell more … how can we do it?

First, we must always remember that any product or service must be able to stand on its own feet, so it must be able to sustain itself and establish itself in the market.

The relevant market has to be analyzed, the goal we want to achieve at the level of market coverage defined, i.e., how many customers we want to reach, what market share we want to achieve, and, according to these goals, the strategy is to be developed.

Of course, depending on what I have to sell, the scenarios, the possibilities, the target market, etc., change and, consequently, so does the strategy.

If I sell a new type of washing machine detergent I can choose some avenues, if I sell security doors I can choose others….

In the first case, that of the new detergent, we can give ourselves the maximum possible target, that is, to reach the total number of households in Italy (if we make the distribution nationwide), while in the second case, I will have to consider the cycle of changing a security door and relate to the total number of households.

From the promotional point of view, we come back to repeat, that promotions are about getting people to try and learn about the product, then increasing the number of customers to build our value in terms of share but also in terms of the margins we are going to create.


Obviously, if I go to place my detergent (for example), on promotion once a month, I will allow everyone to always buy it on promotion so, if I have not taken this into account when constructing the selling price, I will risk going under margin, if not actually making a loss.

This means, going back to the initial talk about promotions, that when we constantly see products on promotion, thus being able to buy them all the time at a far lower price than normal, companies have taken this into account initially, so the base selling price is increased; then, depending on how many (albeit always a few), sales are made at full price and how many on promotion, the contribution margin per product is averaged.

Of course, we have to consider one thing; each product is born with its own contribution margin and therefore with the guideline to which one must adhere if one wants to bring home the necessary margin.

If a product is always on promotion it means that, the company’s contribution margin already includes a defined number of promotions on an equally defined quantity.

Moral of the story?

Of course, we have to consider one thing; each product is born with its own contribution margin and therefore with the guideline to which one must adhere if one wants to bring home the necessary margin.

If a product is always on promotion it means that, the company’s contribution margin already includes a defined number of promotions on an equally defined quantity.

Moral of the story?

In other sectors, such as apparel, footwear and fashion, in general, we notice more of a phenomenon of clear separation between high-end products that are generally unaffected by market-related problems, and mid- to low-end products with a substantial “every day low price,” i.e., year-round low prices, but that is another story.

The bulk of the market is made up of promotions, which is the main thing we buy. Yes, because more than products and services, we are used to buying promotions of products or services.

Going back to our reasoning, it is clear that, we every time we go to schedule a promotion, we are not doing the work of checking if, within the 4 levers we talked about, we have not touched the keys in the right way but we are repeating promo actions because we are doing it almost automatically, repeating actions that have already been done, just because we don’t have the right timing that allows us to make all the necessary considerations (the world goes fast for everyone and this is a decidedly common issue), doing actions with a priori reasoning done on the basis of “the scale of good” or evaluated “offhand” …. Well, in these cases, we are not there according to the standards that we should maintain when we go to plan a promotion that should be an event.

It is our understanding to date that promotions are generally not planned in this way, and so it means that this is something that will necessarily need to be worked on.

This means that you are not questioning the flyer, you are not questioning the printed paper or the promotions, but you want to make people think about the way these promotions are put in place.

We depart from this point for a deeper look … namely, promotions can be even less effective, if not completely ineffective, for four main reasons:

1.if they have not been properly planned, but are simply the result of something else (I did not make time to prepare and accepted what the supplier proposed, I had not studied the alternatives to see if there was a possibility of inserting something more effective instead of what I am inserting in handout, etc.), instead of responding to a precise need of one of the parties, if not even both, as it should always be;

2.if they have not been planned at the most suitable time, so there is not the exact seasonality, there is too little time since the last promotion we did on that product;

3.if there is a concurrence of similar products being promoted, thus decreasing their effectiveness

4.If you have wrong pricing strategy.

So let’s go back to what we were saying earlier, which is that often, for what we know on a daily basis, promotions are often hastily planned, generally no major basic preparation is done, to understand instead how the last ones went, including in relation to the proposed price ranges, the number of sales per customer, the repurchase rate, etc.

All this, of course, affects effectiveness and, on the consumer side, induced reasoning is also generated, i.e., “so if I can’t find it here anymore on promotion … I’ll find it in another store of another chain, still with the same promo …”

It is clear that here we enter the field with a very specific strategy, which merges elements of marketing related to promotions with what we said before, regarding customer loyalty, basically bringing to the market a new possible path by which we can, on the one hand hook the customer, on the one hand make him interact with us therefore make him loyal to, last but not least, put him in a position to buy products and not promotions!


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