Tuesday January18, 2004

By Alazar Ahmed

alazarahmed@yahoo.com

Throng of trophies

An automobile, a TV set, and the like are things that most people yearn to own. The fact that somebody dreams to entitlement of ownership logically instigates definition of how to get them: purchase or free gifts. It is fact of life to gaze at the number of automobiles made ready for prizes and rewards. This kind of sales promotion was first introduced by East Africa Bottling Company, later taken up by archrival Moha Soft Drinks S.C. Now, every firm is doing it: electronics agents, photo film agents, detergent industry, etc. The catalogs of rewards are free gifts (free drink, automobiles, free air ticket to historical places, etc), or extra products. Sometimes companies outsource the promotion to another firm. The aqua industry used to give free 500 ml purified mineral water if a customer buys a lubricant brand worth 300 birr and above. 

In the local marketing context, a sale promotion seems a controversial phenomenon. The National Lottery Authority had claimed that it is the office that was vested with authority of approving the promotion program. The rationale is plausible.   Nobody would prefer a prize from the authority if a sales promotion sponsoring company offers two packages: product for satisfaction and prize for excitement, while the national lottery offers only unlikely prizes which are a matter of luck. This would mean reshuffling of sales of lottery (revenue of the authority) to the coffer of other companies. The other side of the argument is that customers are calculative to which products they are ready to risk the fruit of their sweat.

All prizes are not released at once. Sales trends are indicators when there is a rewarding figure, number, symbol, etc to float. At the dawn of the program, the award will be offered to fan the suspense to the climax. At noon, one more is offered and it goes on like that till sales boom at meteoric rates. Just one thing to heed, the marketer systematically releases rewarding items after making sure that they stock bundles of treasures out of their strategy.

Some products in the market are at odd with such strategies. Expensive and technically complex products require customers’ in-depth and pre-purchase analysis. In acquisition of such items, customers pay much attention to the quality of the product and the price list of competitive products. Offers from other sources such as distributors instead of agents will be taken into account. Customers do not look at the prize behind what an agent vows to offer. You need a reason. Because it is a lifetime asset.  Some customers are so tailored with certain brands that it is too hard to divert them from their hard-core behavior. Customers prefer to look at what the brand is all about, not only at the prize.

However, low priced and non-durable items can be subjects in suspicion of such programs. People buy items and long to see what may follow acutely: reward or nothing. Consumers look for the generic product and prize at a moment of purchase. This is a sign of success for the promotional objective. Who knows? Customers might gradually be drawn to the firms customers loyalty rank. They might adore the taste and benefit of the product for some time. But quality assurance at this stage is mandatory. If marketers can’t guarantee quality, the sales promotion is prone to fail.  Now what a company should think of is whether it affirms the expectation of customers in all respect.

All seasons are not in favor of some products. Sales trends could fall down to zero. Silk cloths, soft drinks, icy foodstuffs are not looked for in winter and blankets are not demanded in 40C° summer. The fact is that sales are below daily or weekly standards and a firm can figure a way out. At zero level sales, sales promotion strategy can be advised as a healing approach. 

It is unprofessional to chase each and every practice of competitors. Most local firms are echoes of their competitors than practitioners of their own vision. Sales promotion is a case in point. The local soft drink industry is quite a good example. When one firm does something, the others do in the same way with no change of tactics. A firm ought to be foreseeing and visionary. In other words, it is wise of a marketing firm to set out what it needs and specifically sort out the weak flanks of its competitors. However gigantic competitors’ footprints are, there are usually weak flanks and a firm should never be myopic to attack. A firm can build up its outsmarting strategic plan and serve customers in an analytical approach.

The other thing that most sales promotion programs lack is a sense of reality. Look at the electronics industry too. They always promise to make an award if a customer purchases a TV set costing 3000 birr. I don’t have the guts to risk my three thousand birr for a highly improbable gift of an automobile. Call me a risk aversor. Neither do I look for a cheap item in haste. I, as a customer, would look inside and then fathom the outcome. If a customer views it from such a vantage point, most strategies are found unrealistic.

Bless or curse, the National Lottery Authority, it made sales promotion a short lived activity. It is a program of three months and the authority claims 15% of the payment of the program. So a firm should develop high probability of sales earning in a very short period of time with prior analysis of cost and benefit. It is not a “live ever after” concept. It is a program and a program has a time of inception and completion. Some questions might be raised. Why are we doing it? When should we do it? How can it be logical? What is the total budget for it? What would be the logical approach of presentation? What is the nature of the product in sale? What is the estimated revenue and profit out of it? How should the trophies be rewarded along the period?

It is a trophy of promises after a consumers’ journey of decision-making. There are a lot of ups and downs, illusive lanes, and a lot of expectation. Never mind. Just look around. And be courageous and take sound actions. But, fast-minded, logical, and realistic actions.