Exhibit 17.1 Tiger beer in-store display and promotion.
Promotions are a crucial element of the marketing
mix. They contribute to a large proportion of total sales for most product categories,
and help to build brand awareness, engage with customers, and foster brand loyalty.
But how effective are promotions? Considering that the proportion of
on-promotion sales is so high, one would imagine that manufacturers can barely afford not
to evaluate their impact.
This chapter provides an overview of the various types of trade and consumer
promotions, emphasizes the importance of evaluating and rationalizing them, and discusses the
metrics and techniques used to evaluate their effectiveness. It presents an elementary approach for
assessing promotions in terms of volume, value, and profit gains. It also explores the
concept of market modelling for promotion evaluation, and outlines the essential structure
of such models.
While this chapter covers the metrics, analysis, applications, model validity
and fitness tests, and watchouts and guidelines, Volume IV’s
Marketing Mix Modelling chapter
goes into the details of econometric-based techniques for evaluating promotions.
