The impact of alternative promotion strategies on the spirits category: evidence from the UK
| Published date | 01 October 1999 |
| Date | 01 October 1999 |
| DOI | https://doi.org/10.1108/10610429910296037 |
| Pages | 430-443 |
| Author | Andrew Fearne,Adam Donaldson,Phil Norminton |
| Subject Matter | Marketing |
PRICING STRATEGY & PRACTICE
The impact of alternative
promotion strategies on the
spirits category: evidence from
the UK
Andrew Fearne
Senior Lecturer, Food and Industry Management, Wye College,
University of London, Wye, Ashford, Kent, UK
Adam Donaldson
Senior Consultant, Druid Systems plc, Staines, Middlesex, UK
Phil Norminton
Consultant, A.C. Nielsen, Headington, Oxford, UK
Keywords Sales promotion, Pricing, Marketing strategy, Consumer behaviour,
Wine and spirits, United Kingdom
Abstract There has been a general increase in the use of promotions within UK multiple
grocers over recent years, during which the spirits category has grown in both volume
and monetary terms. The results from an econometric analysis of weekly cross-sectional
store data and cluster analysis of consumer panel data suggest that promotions have had
a slight positive impact on the volume of sales, particularly over the seasonally important
Christmas period. However, some promotions, especially multibuys, appear largely to
reward loyal buyers, doing little for either volume or monetary growth of the spirits
category. Other promotions, such as price and gift offers, appeal more to consumers who
do not purchase spirits so frequently and also attract people who are less brand and store
loyal. The case study provides clear evidence of the differential impacts which different
promotional methods have on sales growth and the need to carefully target different
promotional offers to different groups of buyers.
1. Introduction
In recent years promotions have gained importance within UK multiple
grocers as a means of achieving competitive advantage. The significant
decline in real (i.e. inflation adjusted) levels of consumer expenditure during
the early 1990s would certainly have helped to foster the image of
promotions as a way of attracting price sensitive consumers. Indeed, the
evidence from consumer surveys (see Figure 1) supports the notion that
consumers are becoming more aware of promotional activity and more
active in seeking out promotional offers.
The key question that arises is whether promotional activity leads to overall
category growth or reduced levels of consumer expenditure and more brand
switching.
This paper reports the results of a study, commissioned by United Distillers,
one of the world's largest manufacturers of gin, vodka, rum and whisky, on
the impact of alternative promotions within the UK spirits sector in multiple
grocers.
The paper is in six parts. A brief summary of recent research into the
effectiveness of alternative promotional activity is presented in section 2,
followed by a description of the key characteristics of the UK spirits sector,
The current issue and full text archive of this journal is available at
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Achieving competitive
advantage
430 JOURNAL OF PRODUCT & BRAND MANAGEMENT, VOL. 8 NO. 5 1999, pp. 430-442, #MCB UNIVERSITY PRESS, 1061-0421
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