What can be the effect of sales promotion on brands and branding?

Question

What can be the effect of sales promotion on brands and branding?

Answer 1

Creating a brand is a time-consuming process because it consists of creating expectations for how the brand should behave based on its core values. In other words, branding is creating predictability. What the brand does today should help you anticipate what it’ll do tomorrow.

Promotion, on the other hand, is short-term by definition. It has the character of urgency. Act NOW. Tomorrow will be too late. Whether it is a price reduction, a larger packaging, a tie-in with another product, a coupon, or some other incentive, it is temporary. Here today, gone tomorrow. Unless your brand is that of a discount store, where low pricing and purchase incentives are an inherent part of the brand concept, promotion can potentially hurt the brand.

Does this mean that you shouldn’t run promotions? Not at all! At least not without doing some homework first. Besides, you do not really have a choice, do you?

It means three things:

A good promotion must justify its existence. Something like a new store opening, a company anniversary or a celebration of some sort, all can be good reasons for running a promotion. Do not try to fool the consumer with a fake justification (e.g. "The boss had a dream and made me mark all the prices down," etc.). You won’t fool them after a few times, and you’ll lose credibility and jeopardize your branding efforts. There is a plethora of books and other resources that can help you justify running a promotion almost at any time you wish. One of my favorite sources of inspiration is Chase’s Calendar of Events, which should be on the desktop of every brand manager. The key point is that a promotion should never exist solely based on a whimsical reason for being

Try to find justifications that tie in to your brand’s persona: Birth dates and anniversaries are good; spring or Back-to-School are less good. Häagen-Dazs could do an annual promotion on or around July 9th for its Dulce de Leche ice cream to coincide with the Argentine National day. (The flavor and the name originated in Argentina.) Other flavors can tag along for the ride. A summer ice cream promotion, with no other justification than summer, may have the same dates and the same result on sales, but would not enhance the brand. Sure, what we suggest requires some homework, but it is essential for running promotions that can actually help build your brand.

Formalize the promotion planning process to include a mandatory rationale for the existence and the timing of each promotion. Look at every promotion not only for the tactical job it can do in the short term but also as a communications tool. It is one of the many voices of the brand and it can help you if it says the right things.

"Brand Building Promotions" are very rarely seen because they require extra work by the promotion tacticians (often the Product Manager) to accomplish a strategic purpose that few companies have formalized. You can change that, but you’ll have to use your imagination. You may have to do research into historical events or odd characters (like Ray Kroc or Sylvester Graham who promoted Graham flour). Also research your consumer’s habits (when do they use your product; how do they use it; what other products do they use it with?). Wherever you find your inspiration, exercise your creativity to create brand-centric promotion opportunities that will have the desired effect on sales and further your branding strategy at the same time.