Efficient Promotion
Efficient Promotion describes efficient sales promotion and is one of the basic strategies of the ECR concept (Efficient Consumer Response), which aims to reduce costs and respond more efficiently to consumer needs through cooperation between retail and industry. Efficient promotion is designed to ensure a faster and more efficient response to customer demand. Furthermore, inefficiencies in sales promotion are to be eliminated and the stockpiling of larger quantities of goods at promotional prices is to be reduced in order to keep storage costs low and thus also the tied-up capital.
Approach to Efficient Promotion
In order for both sides of the cooperation between retailer and manufacturer to profit optimally, a concept is required according to which Efficient Promotion is designed. In order to achieve the goal of optimizing sales promotion through the use of sales-specific promotional tools, an ideal scheme is usually followed, which can be individually adapted to the specific needs of the cooperation partners. First of all, a precise objective is required that corresponds to the interests of both cooperation parties involved. This objective should include a clearly defined time frame, content, scope, and a concretely measurable desired result. Possible goals can be the acquisition of new customers, the increase of the turnover by a certain percentage or the increase of the degree of popularity. The promotional tools to be used, such as promotional weeks, discount campaigns or events, are then selected. Both effectiveness and efficiency aspects can be taken into account for the sales promotion measures. Once the goals and means of promotion have been defined, the promotion is carried out. Here, it has been shown that a personalized promotion is most effective. A promotion that is widely distributed without specifically addressing the consumer attracts less attention than a direct approach. This can be done in various ways, whether it is a specific reference to a promotion during the order process or through letters and emails. The choice of approach should be tailored to the individual case, because not every form of approach is suitable for every efficient promotion. It is essential to evaluate the campaign after it has been completed. A target/actual comparison should be carried out to determine whether the targets set in advance have been achieved. In addition, this evaluation helps to plan future campaigns even more efficiently.
Benefits and risks for the cooperation partners involved
Studies have shown that cooperation between retailers and manufacturers in the planning and implementation of sales promotion activities is more productive, time-saving and cost-effective than if each carries out these activities on its own. In many areas, jointly planned and executed promotions can avoid duplication of effort and optimize timing. As there are often conflicts of interest between retailers and trade when carrying out Efficient Promotion, it is only advisable to carry out Efficient Promotion when sufficient experience with ECR is already available.
