Forward-buy and stock-up

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However, elasticity alone may not be enough to measure the real effect of a promotion. There are several other rather difficult-to-measure promotional effectiveness indicators.

Let's start with forward-buying, or "buying bias." This namibia whatsapp phone number is the premature purchase of a discounted item. For example, a buyer plans to throw a birthday party in two weeks. During his usual weekly shopping, he sees juice with a good discount and a suitable expiration date - and decides to buy the product cheaper now, rather than put off the purchase for later.

This effect of the promotion will affect the fact that when the cost of the goods returns to the base, sales will fall even lower than they were on average before the promotion. Because the shift in purchase "eats up" future sales. During the promotion period, what is sold is what would have been sold later anyway.

The second similar indicator is stock-up . This is what they call buying for future use, in which the promotional price “works” a little differently than in the first case. For example, a buyer saw a discount on chicken eggs. This is a product from his regular consumer basket - he buys them every 2-3 days. Therefore, he decides to buy not one package, but three at once - for the whole next week. It turns out that the retailer needs to subtract losses from the profit from the promotion, or rather - unearned revenue. This will happen because the buyer will not come for eggs in 2-3 days, as usual: he bought them for future use and now he will not need the eggs for a long time.



"Cannibalization" and halo
The third parameter is "cannibalization" , when a discount on one product "cannibalizes" ("eats up") the purchase of another product. For example, a discount on Domik v Derevne milk reduces sales of a similar product TM "Vesyoly Molochnik", which is sold in the supermarket at the base price. That is, a promotion on one product does not allow you to receive the usual revenue from another: consumers who usually buy Vesyoly Molochnik will see a discount on Domik v Derevne and are more likely to choose it.

The fourth parameter is halo, or the "positive halo effect" . When buying a discounted item, customers also buy other products. For example, a discount on chips provokes an increase in lemonade sales and vice versa. This is a positive effect of the promotion, but it is also rarely taken into account when planning.