The promotional planning process and its impact on consumer franchise building: the case of fast‐moving goods companies in New Zealand
| Published date | 01 December 1998 |
| DOI | https://doi.org/10.1108/10610429810244701 |
| Pages | 557-567 |
| Date | 01 December 1998 |
| Author | David Stewart,Bridget Gallen |
| Subject Matter | Marketing |
Introduction
There has been much interest and discussion concerning the increasing
proportion of a brand’s promotional budget that is being allocated to sales
promotion, often at the expense of advertising expenditure. There are a
number of reasons for the increase in sales promotion expenditure, such as
escalating media costs and media clutter, managerial short-term focus, the
increasing demand for managerial accountability, and changes in consumer
decision making (Schultz, 1987). Another significant reason for increasing
sales promotion expenditure is the change in the balance of power from
manufacturer to retailer which puts considerable pressure on manufacturers
to offer trade promotions (King, 1991).
There are a number of well-documented negative effects which the increase
in sales promotion activity has on the long-term strength of a brand (Buzzell
et al., 1990; Mohr and Low, 1993). However, it has also been suggested that
the promotional planning process itself is equally responsible for many
problems associated with the increase in sales promotions.
The objective of the research reported here is to analyse the promotional
planning process of product/brand managers in fast moving goods
companies in New Zealand, and to determine the key factors that impact on
the promotional planning process. In particular, the research focuses on the
budgeting process and its impact on consumer franchise building.
The promotion mix
The ability of advertising and other promotion elements to deliver carefully
prepared messages to targeted audiences has given the promotion mix a
major role in the building of brands. In previous decades, marketing
managers often failed to recognise the importance of co-ordinating and
integrating the promotion mix as the various elements were planned and
managed separately, often by different people with different objectives,
budgets, and views of the market. However, the focus of the 1990s has been
for marketing managers to co-ordinate all their marketing activities and
make a decision as to which element of the promotion mix bests meets the
promotion objectives of the marketing plan (Warner, 1992).
The two elements of the promotion mix that have received particular
attention over the past decade are advertising and sales promotion. This has
been due to the increasing allocation of the promotion budget to sales
promotion at the expense of advertising.
JOURNAL OF PRODUCT & BRAND MANAGEMENT, VOL. 7 NO. 6 1998, pp. 557-567 © MCB UNIVERSITY PRESS, 1061-0421 557
The promotional planning
process and its impact on
consumer franchise building:
the case of fast-moving goods
companies in New Zealand
David Stewart
Senior Lecturer, School of Business & Public Management, Victoria
University of Wellington, Wellington, New Zealand
Bridget Gallen
School of Business & Public Management, Victoria University of
Wellington, Wellington, New Zealand
Sales promotion
expenditure
Carefully prepared
messages
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