Spar InfoTech, Inc.
Promoting Multi-Brand Package
Background: A special package had a number of different brands which were sold as a single item. An example would be when multiple brands are packaged together to allow the consumer to use all the brands to make a meal. The individual items were also sold separately. The individual brands were all promoted but the package with multiple brands was not promoted since it was believed promoting the package would encourage buyers to break up the package to sell the individual items separately at full price.
Analysis: It was found that different classes of trade purchased the combo package and other classes of trade purchased the individual brands.
Recommendation: Promote the special package at a high discount since it focused on a class of trade that did not react to promotions on the individual brands.
Net results: Promotions on the special package were successful and didn’t have any cannibalization or negative impact on the individual brands.
Learnings: It is risky to accept opinion, myths or common sense without quantifying the impact of the decisions that occur from these beliefs.