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The Path to Loyalty Step 2 Published Version.pdf


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The Path to Loyalty – Step Two | The Institute of Promotional Marketing

The Institute of Promotional Marketing
The Institute of Promotional Marketing is the only UK trade association that truly represents brand owners who use
promotional marketing and the agencies and suppliers servicing them.

Problems

Our mission is to protect, promote and progress creative and effective promotional marketing across all media
channels. We aim to achieve this through our renowned education programme, our highly-regarded legal advice
services, our annual awards scheme and a ground-breaking research programme.
This White Paper is the latest product of that research programme, and is aimed at extending our understanding of
the different promotional techniques that convince consumers to buy products in store.
The IPM defines promotional marketing as:

Solutions

Any marketing initiative intended to create a call to action that has a direct and positive impact on
the behaviour of a targeted audience by offering a demonstrable, though not necessarily tangible,
benefit. Promotional marketing content can be delivered via any media.
In our previous White Paper, we explored the impact of price-based promotions, which are increasing in their usage,
driven largely by the demands of the major retailers.

In this White Paper, we are exploring how marketers should be analysing the real impact on both the bottom line and
also brand equity of a range of different promotional techniques. We also look at how successful promotions must be
matched with the right stock levels – if consumers cannot find a promoted product on shelf, then that can be more
damaging than not having the promotion in the first place.
Obviously, in the current economic climate, the pressure from retailers on brand owners to run price-based
promotions on an almost permanent basis is massive. But brand owners must find ways to prove to retailers that
such a focus is short-termism, and that a balanced portfolio of promotional techniques will work far better for the
longer term health of both brand and retailer.
Of course, promotional marketing is not the exclusive preserve of FMCG brands selling through the retail channel.
But IPM research has shown that in 2009, out of a total spend on promotional marketing in the UK of £36 billion,
branded goods manufacturers spent a total of £25.6 billion on promotions in retailers (mainly, but not exclusively, the
big supermarkets), £14.4 billion of which went on price promotions.
If brand owners spend just a fraction of what they can save by reducing their use of price promotions, then they will
be able to drive extra sales without sacrificing margin, and grow their bottom line and brand equity at the same time.
We will be continuing to develop this line of argument with future White Papers in our Path to Loyalty series.
If you are a brand owner, an agency or a service provider who can help us further build the case for added-value
promotions, we would be very interested to hear your comments and any supporting evidence you want to share
with us.
Annie Swift Chief Executive Officer, The Institute of Promotional Marketing

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Resources

That research conclusively demonstrated that while price promotions have their place in the promotional marketer’s
armoury, they should be used with caution. An over-reliance on price promotions, to the exclusion of other, valueadded, techniques may not actually deliver real profit increases and will almost certainly destroy brand values in the
longer term.