two cents: promos in tough times
As published on Bazaar Magazine monthly article: Loaay’s Two Cents
Why are the current marketing campaigns mostly about Sales and Promotions and are hardly about Services and Quality?
With the current financial crisis many companies have a hard time managing their stock or pushing their services. And like how teenagers are drawn to junk food as their first choice for dinner most Marketers and Sales Managers are drawn to ‘SALES’ and ‘PROMOS’ as their first choice for their financial hunger. So, naturally, the media gets flooded with ‘50%’ this and ‘FREE GIFT’ that. Out of fear that any spending other than sales-related activities may be needless in such times, companies reduce and even eliminate Branding, Corporate Social Responsibility, Sponsorship, Event Marketing budgets and more.
Here’s what history shows us: Throughout all financial crises and recessions sale offers and promos kick off for a while. Companies that start first gain some advantage. Others that get more aggressive in the second round manage to win some customers and a little profit. However, after the ‘50%’ becomes ‘90%’ and the ‘buy one get one’ is ‘buy one get two’ all companies lose their momentary advantages and consumers are back again to square one: “Which brand do I choose?” Short-term gains from desperate promos burn profit margins and dilute the brand’s strengths on the long-term. Dull discounts don’t solve the problem. They just delay the impact. Big brands that are in it for the whole nine yards need to behave rationally and show some discipline. And to those that are short-sighted and panicking, remember what The Godfather, Vito Corleone, said to Johnny Fontane in The Godfather I: “You can act like a man! (Then, after slapping Johnny on the face) What’s the matter with you?”
Promos come and go, but creative brand management is the sure winner in the long run. If companies have to do some promos for now, they need to find ways to keep them fun and engaging. An offer like “Order your own coffee drink mix at our stores at 50% off and we’ll name it after you for a month, if it gets to be a best seller this weekend (so, hint, hint: get your friends and family to order lots of it this weekend)” is much more memorable for the consumers and profitable for the brand than “50% off on our coffee”…and that’s just my two cents.
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