Kruger, Michael W.
March 1987
Marketing Science;Spring87, Vol. 6 Issue 2, p147
Academic Journal
This article presents information regarding steps of mastering trade promotions. While the data required for promotion analysis are usually available to the company, on a computer, or in a file cabinet, or easily purchased-the cost of massaging the data into a usable form has been very high. Typically, shipment records are in a form suitable for order handling and accounting, but not suitable for analysis of deals. It is pointed out that one type of problem in their discussion of "pseudo-promotions," the deals may have been forgotten entirely. Other problems involve double-counting of deal cases, shifting of account records as sales areas or account names change, and handling of deal costs in ways that make sense to accountants but seem curious to the modeler. The cost to the manufacturer of preparing the data is often far greater than the analysis cost, and taxes scarce internal systems analysis resources. This often leads to deal analysis being tried on a pilot basis, but not thoroughly implemented. Another bather to implementation of a uniform trade promotion analysis program is the presence of internal evaluations done by junior marketing or sales management. These suffer not only from potential lack of objectivity, but also from a lack of time, expertise, data, and consistency of approach. While the true cost of these procedures to the organization is high, they are opportunity costs and do not show up directly.


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