Spar InfoTech, Inc.
Promoting Different Sizes of the Same Brand at the Same Time
Background: Two different sizes of a brand were usually promoted at the same time on the theory that only promoting one size would result in a cannibalization of the non-promoted item by consumers.
Analysis: It was found that retailers would only promote one of the sizes at retail and pocket the discount on the non-promoted size.
Recommendation: Stagger the promotions of the two sizes so that only one size at time was on promotion.
Net results: Overall revenue and profits from promotions increased while promotion costs remained flat.
Learning: If promoting different packages of the same brand it is necessary to confirm that retailers are discounting both sizes to the consumer.