Abstract:

In Germany, retailers frequently use costly, store-wide theme promotions to increase consumer traffic and overall sales. Until recently, promotions were considered a necessary cost-of-doing-business and payback analyses for these events were restricted to the sales side of the equation. To a great extent, consumer reaction to promotions were disregarded because of shortcomings in existing data sources. The 1992 introduction of Nielsen Single Source household panel in Germany is an alternative which fills this information gap. Single Source covers purchases of all Fast Moving Consumer Goods through all outlets, and links household purchases with objectively collected retailer promotion information at the individual household level. Using Single Source, we are investigating consumer response to a June 1993 promotion campaign with which a major German retailer - Tengelmann - celebrated its 100th anniversary. During the month of this event, advertising and aggressive trade promotions were executed in a wide variety of product categories. The effects of the heavy promotions can clearly be seen by looking at changes in penetration rates, unit sales per occasion and total cash bill values across time. Both in total and in many categories, Tengelmann gained a large number of new buyers but these effects were only temporary. The case study demonstrates that data sets having the capability for multi-category analysis in conjunction with analysis of total purchase trip values and retailer loyalty bring real value to retailer event evaluation. Increased category/brand sales under promotion conditions can now be analysed from the consumer side, e.g., separating buyers into stockpilers versus new buyers, and identifying whether the latter are brand- and/or store-switchers.