Judging by the rise of the U.S. stock market over the last year (about 15%) along with a slightly lower unemployment rate (about 7.3%), many might assume the upcoming holiday selling season should be a good one. However, many forecasters believe that is not the case. Not only do they predict consumers will be tight with their spending because economic conditions are not as good as they seem, these prognosticator also see problems with the short holiday selling season. If one counts Thanksgiving as the start of the holiday season (though many now view Thanksgiving day as the start), there are only 26 days for consumers to complete their Christmas shopping.
Because of the twin concerns of consumers’ reluctance to spend and the short selling season, marketers are resorting to rolling out more promotions that offer hefty incentives. According to this New York Times story, for retailers (and product manufacturers) this means building demand through both heavy advertising and sales promotions. As we observe in our Sales Promotion tutorial, sales promotion involves special short-term techniques for getting customers to engage in some activity. While there are several different objectives of sales promotion, the main goal for holiday season promotions is clearly to increase sales.
As we see in this story, the methods being utilized to build demand are varied and include deal-of-the-day promotions or “flash sales,” where a product may carry an extremely low price for a short period. To promote their sales promotions, retailers will be spending heavily on advertising.
A key take-away from this story is seeing how crucial it is that two methods of promotion, advertising and sales promotion, work together to meet marketing objectives.
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