Promotion Fatigue
January 31st, 2011 § Leave a Comment
There is an interesting bit in Ad Age about the diminishing impact of price promotion on sales among packaged goods companies the past year. It says:
“SymphonyIRI Group reports that even though the percentage of packaged goods sold on price promotion increased markedly for the second consecutive year, the average volume lift per promotion fell.”
There could be a couple of reasons for the decline, which the Ad Age story mentions. One is the recession. Another is the “drumbeat” of offers online, which will soon include Google Offers. Overall, in response to a super abundance of deals there is simply “a level of promotion fatigue,” according to Susan Viamari, the author of the SymphonyIRI report.
It is a reminder that price promotion is short-term. Long-term, Ad Age quotes Utpal Dholakia of Rice University saying, “it has very little effect.”
