Discounts and advertising: what to spend more? | Предприниматель

Discounts and advertising: what to spend more?

We offer you the perfect recipe.

Two weeks to increase sales by 10 times ! Is it feasible ? In April of this year, the company Barnaul ” Altan “, which has been producing pasta under the brand Granmulino, one retailer of St. Petersburg offered buyers a 20% discount on the entire product range . Advertising campaign in support of the brand was to show a short video on local TV in the first few days of the action.

And that was enough , as buyers began to literally sweep the company’s products from store shelves . High demand did not last long . After the action , he began to fall. But sales in the network is now 25 % higher than they were prior to the action .Coupon Offer – quite an old trick . Marketers have long understood that the buyers make a purchase decision already in store shelves , in addition to easily shift their focus from one brand to another. Such coupon offer ( or gifts for purchase), are intended to attract people to the first purchase. Some people , even after the completion of the action will not have time to buy it

Valery Pokornyak , owner and CEO of ” Altan “, argues that the sales point promotions are more effective than any direct advertising . This is the same manipulation , only more profitable for the consumer. Mark Granmulino was launched in 1997 , and since then the company has spent almost nothing on its advertising. At first this was not money, because the money went to the expansion of production and the search for channels.

Pokornyak then realized that the successful sale possible and without hype .

One founder of the ” Altai” entered the St. Petersburg store , ” Roundabout “, where each customer can get a free bag of flour if they buy two packs of pasta. According Pokornyak in one hand was given only one set, since the turn of the pasta lined up considerable. In 2006-2007, he was a franchisee of Petersburg “Pyaterochka” and ever since realized how discounts and gifts increase sales .

As a general rule , food manufacturers on advertising spend on advertising 10-20 % of revenue. Granmulino advertising budget was never greater than 2 % of sales (2008: earnings ” Altan ” has made 460 million rubles , 90 % of which is accounted for pasta ) . Only two years ago , the company started to shoot video . Sometimes they are broadcast on regional grids federal channels , but only for a few days and only in areas where it is necessary to promote a product . Outdoor advertising ” Altan ” is rarely used , often combining it with the campaign of the network that work together. Perhaps this is all without counting the posters Granmulino on trucks that transported the pasta and leaflets for the dealers.

Despite this, Valery Pokornyak still considers advertising an important sales tool. He says that if at the expense of only promotions could win the market , the company Procter & Gamble would have long ago stopped broadcasting the commercials on television. Necessary to resort to all methods of brand promotion .And choose for themselves a comfortable proportion.

The company ” Altan ” in order to attract buyers who use the yellow tags . This color in stores indicates the presence of the goods at a discount. According to the owner , ” Altana “, only large companies can afford to share with discounts , so afraid of the other losses. But if you prepare properly , you can get a plus . Necessary to provide the product in stores three times more than usual. It is not necessary to spare money for a good calculation.

As explained Pokornyak to be seen by the buyer , it is necessary to have a large “commodity spot .” Best of all, if the goods are placed on pallets , as they always produce more sales even at a lower discount than the racks.

What is the size of the discount should be set ? According to Irina Ilina , regional manager of the “Altai” , a small discount of 5.3 % did not give any result. All the same, there is a point at which the price of the product will be lower, so it’s best to set a discount of at least 10 %.

The action is considered successful if it spent less than 6 % of revenues. Experience shows that the 9/10 stocks always pay off , and in the time of the sale of shares may increase by 50-500 %. But selling products at a discount for more than one month is unprofitable , and less than a week is ridiculous . Buyers can not immediately see action in a store, where there are always new offers . A yellow price tags boost demand by 10-15 %. Such measures can hold out for 2-3 months. And if you then do not make any effort , then sales will fall to that level or even lower.

But before the conduct promotions , you need to establish relationships with vendors. To date, the Stavropol Territory ” Altan ” sells the same amount of pasta , as in the Altai. And in Pyatigorsk Granmulino can buy pasta at 70 % of retail outlets. Since sales in these stores , we are motivated by commodity researchers and wholesale customers bonuses for sale. Murmansk company ” Guimet ” , located in the north -west of Russia , has a share of 7% of total sales . Previously supplier of pasta they had our competitor – Chelyabinsk company ” McFee .” Then “the Guimet ” Altai wanted to sell products, but sales did not go well . After the termination of the contract with the ” McPhee “, the company made ​​contact and company Pokornyak . And if the ” Altan ” believe that sales increased due to the yellow price tag , the ” Gimee ” think that this contributed to the empty shelves .

How to build relationships with retailers – that’s another story.

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