Content area
Full Text
INTRODUCTION
Sales promotion is an action-focused marketing event aimed at causing a direct impact on the behavior of the firm's customers.1 It is one of the most fundamental elements in the marketing plans of many companies, especially those that produce frequently purchased consumer packaged goods.2, 3
The increase in sales promotion expenditures, sometimes at the expense of the advertising budget, has been repeatedly pointed out in the last few decades.4, 5, 6, 7, 8 According to Joyce, the use of promotions by manufacturers of consumer packaged goods has increased eightfold since 1996.9 In relative terms, some studies have found that promotional expenditure is the second-largest manufacturer expense after the cost of goods.10 Ruiz noted that, in Spain, the budget dedicated to promotional actions was 60 per cent, as opposed to 40 per cent designated for advertising.11 At present, it is estimated that promotion represents between 65 per cent and 75 per cent of the common budget.3 Gomez et al indicate that promotion spending accounted for approximately 70 per cent of manufacturers' marketing budgets in 2002, compared with less than 25 per cent two decades ago.12 Furthermore, 56.3 per cent of Spanish companies assert that they use promotional actions in their direct marketing plans more frequently.13
One of the main reasons why corporations have changed the marketing budget assignation in favor of promotions is to obtain faster and higher-level results. Advertising informs consumers, fosters consumer attitudes and increases purchase intentions, exerting an indirect effect on sales. On the other hand, promotion impels sales in an immediate way by acting directly on purchase behavior.14 Promotions are mainly intended to create an immediate sale by offering the consumer an extra incentive to buy the product. Often, more than 50 per cent of the total sales volume is sold during promotions.1 In the United States, 74 per cent of retailers agree that promotions increase the profitability of businesses.15
According to Van Heerde et al , the sales increase caused by a promotion can have different origins. On the one hand, it can be a consequence of category extension, meaning an increase in total sales of a product category.16 Consumers, motivated by promotion, increase their usual...