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Promotion is a common marketing management tactic, whether initiated as an active attack or as a reactive response. In either case, experienced companies often handle it skillfully, achieving their promotional purposes and goals; while less experienced companies may execute it clumsily, spending money and effort without achieving their immediate intentions, often leaving a legacy of problems for future marketing efforts.

In some promotional projects, we use the "Promotion 4P Strategy" to help clients design and review promotions, balancing qualitative and quantitative aspects, and balancing immediate and subsequent marketing operations, so that clients benefit comprehensively.

I: Purpose

Depending on the attributes of new/old brands, new/old products, new/old markets, new/old channels, or special operational needs of the enterprise, promotional purposes and goals vary, but generally fall into the following eight categories, achieved through a combination of TP (Trade Promotion) and CP (Consumer Promotion):

  1. Eye-catching: For the launch of new brands or products, to grab attention.
  2. Channel opening: TP activities for new products, new brands, new regions, or new channels, to lay and strengthen channels.
  3. Water storage: Preparing for peak seasons, to win various seasonal battles.
  4. Volume increase: More specifically, to boost market consumption and sell-through.
  5. Suppression: To suppress, squeeze, or block competitors, winning by voice, momentum, or profit; of course, there are also unethical and illegal "shelving competitors" promotional tricks, which have occurred in recent years and are not worth advocating.
  6. Luring to kill: Tactical promotions that deliberately provoke competitors into a bloody fight, causing them to lose blood.
  7. Revitalization: Mainly CP, supplemented by TP, to revitalize old brands and products, awakening or injecting new vitality. Last year's Coca-Cola cute packaging series is a typical case.
  8. Binding: Aimed at binding channel partners to stock up, making them unable to pay or stock competing brands, locking distributors to serve us exclusively. Of course, this tactic must be combined with corresponding cooperation terms and benefit mechanisms to be truly effective; otherwise, channel partners can bypass it by opening accounts under the names of cousins or brothers-in-law.
  9. Quenching thirst: Enterprises use heavy promotions to quickly recover funds. Such promotions are not uncommon, especially as China's industrial environment becomes increasingly difficult; this is often a last resort.

II: Portfolio

Different promotional purposes require careful selection of product portfolios. New product launches and brand revitalization are promotional arrangements at the marketing strategy level, covering new products and related "strategic products," with clear cycle planning. Other purposes are mostly tactical-level actions, using points to leverage volume and points to leverage surface, with core methods being trade promotions to leverage channel push.

There are many promotional problems arising from product portfolio design; here are two examples for consideration:

  1. Offering trade discounts on already hot-selling products often stems from channel complaints about low margins or even price inversion on bestsellers. The long-term solution should be to rationalize the price chain; otherwise, such continuous "promotions" will erode the price band and increase financial verification burdens.
  2. Lacking the concept of bundled promotions, often selling single items at a loss without driving other items. "Combination" and "suite" promotions are actually "hook and bait" methods.

III: Policy

Promotion policy design not only determines whether the plan can be executed and short-term goals achieved, but also whether promotional aftereffects will occur, such as price chain damage, price erosion, profit drag, channel "addiction" (no promotion, no stocking), cross-region dumping, verification conflicts, goodwill damage, and team morale decline. Poorly considered promotion policies generally include the following:

  1. No quantity limits on promotions, leading to large distributors hoarding, limiting overall profitability, and increasing seasonal smoothing management.
  2. Excessive tiered reward levels, one of the main causes of cross-region dumping.
  3. Emphasis on uniform promotions, lacking regional case-by-case promotions, resulting in unnecessary promotions in some areas and lack of targeted promotions for certain regions and customers.
  4. Product price increases without supporting promotions to drive sell-through, leading to loss of customers and market share.
  5. Vague trade promotion verification design, causing conflicts in account reconciliation between manufacturers and distributors, affecting cooperation enthusiasm.

IV: Pipeline

Having clear purposes and goals, and planning appropriate product portfolios and promotion policies, does not guarantee smooth implementation and goal achievement. Without clear team division of labor, logistical support, and supporting progress control measures for timely feedback and plan adjustment, promotion failure is inevitable.

I believe everyone has experienced that many companies, after issuing promotional documents, simply wait or urge customers to pay and ship, ignoring competitor dynamics, resulting in reduced effectiveness and inability to adjust in time. Of course, due to industry differences, the points discussed above may vary greatly in different companies' promotion management, but don't easily dismiss the reference value of cross-industry promotion management.

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