{"id":1459,"date":"2021-02-04T10:00:00","date_gmt":"2021-02-04T09:00:00","guid":{"rendered":"http:\/\/i360.trejka05.pl\/?p=1459"},"modified":"2021-07-14T13:11:40","modified_gmt":"2021-07-14T11:11:40","slug":"why-do-promotional-lotteries-help-to-boost-sales","status":"publish","type":"post","link":"https:\/\/i360.com.pl\/en\/dlaczego-loterie-promocyjne-przyczyniaja-sie-do-wzrostu-sprzedazy\/","title":{"rendered":"Why do promotional lotteries help to boost sales?"},"content":{"rendered":"

Organising a sales promotion (particularly a promotional prize draw) helps to boost sales of the promoted product. This phenomenon is linked to the influence of demand determinants, such as: a switch from the most frequently purchased brand to the promoted one<\/strong> (in the case of retailers: a change in the point of sale where purchases were previously made), an increase in the frequency of purchases<\/strong> and an increase in the number of units of the product purchased<\/strong> (due to an increase in consumption or for the purpose of building up stocks). Recognising, understanding and skilfully utilising these relationships during the design phase promotional prize draw<\/a> helps to achieve success, i.e. an increase in sales.<\/p>\n

Why do promotional lotteries help to boost sales?<\/strong><\/h2><\/p>\n\n\n\n

Organisers of sales promotions<\/a> They aim to achieve an increase in sales of the promoted product during the campaign, compared with the level recorded before the promotion began or the average level over a selected period. This objective is particularly important for organisers of promotional lotteries, where participation is free of charge or linked to the purchase of the promoted product, service or other proof of purchase. Experts in this field often use the term \u201edemand drivers\u201d, which are intended to generate an increase in sales. These are described later in the text.<\/p>\n\n\n\n

Researchers have already made numerous attempts to carry out a decomposition \u2013 that is, to determine the percentage contribution of demand factors that drive sales growth as part of a promotional campaign. To discover the golden rule for organising a promotional lottery that leads to increased sales, one must ask oneself: is the increase due to customers changing their purchasing habits, or are the organisers bringing forward future sales as part of the campaign, because the promotion encourages buyers to make purchases sooner (which may lead to a drop in sales in future periods), or is it that sales are increasing because consumers are buying more to boost their consumption or build up stocks of a particular product?<\/p>\n\n\n\n

The breakdown of the increase in sales volume associated with a promotional lottery involves dividing the number of additional products sold into several groups. These groups are identified on the basis of the criteria that guide customers who contribute to the increase in sales during the promotional campaign.<\/p>\n\n\n\n

There are two measures of decomposition:<\/p>\n\n\n\n

  1.  based on promotional flexibility,<\/li>
  2.  based on sales (measured in units of product).<\/li><\/ol>\n\n\n\n

    A measure based on promotional flexibility<\/strong> It relates to the ratio between the sales generated by the promoted product and the sales lost by other products not being promoted at that time. It shows the increase in sales generated by the promoted product, assuming a constant level of sales for the entire product category to which the promoted product belongs. Put simply, elasticity refers to the number of purchase transactions. This measure allows us to identify the likelihood of changes in consumer behaviour due to the influence of specific demand factors; for example, how the expected number of purchase transactions changes during a promotional lottery. It also shows the extent to which sales of brands that are not currently being promoted will decline \u2013 assuming that the size of the product category to which the promoted product belongs remains unchanged during the promotion.<\/p>\n\n\n\n

    A measure based on sales measured in units of product<\/strong> In turn, it shows the increase in sales, taking into account changes in the overall level of the product category. This means that it relates to a specific number of product units. The metric is also intended to show by how many units sales of non-promoted brands will decrease, assuming that the size of the promoted product\u2019s category will change as a result of the promotion. This is based on the assumption that part of the category growth caused by the promotion will result in increased sales of brands not covered by the promotion.<\/p>\n\n\n\n

    The results of research analysing the factors underlying sales promotions show that a change of brand is a determinant of demand, generating an increase in sales of approximately 74% during the promotion. The remaining 26% is generated by bringing forward purchases and an increase in consumption levels.<\/p>\n\n\n\n

    Demand factors shaping the structure of purchases<\/h3>\n\n\n\n

    Experts in the organisation of promotional lotteries identify a number of factors that lead to an increase in sales during a sales promotion campaign. The main examples cited include: growth<\/strong> frequency of purchases<\/strong>, a change in the brand previously chosen \/ a change of retail outlet<\/strong> and an increase in the number of units of the promoted product sold<\/strong>, which is acquired through one-off purchases. Sometimes, the latter example can be further divided into two categories, namely: an increase in the number of units of the promoted product sold for the purpose of building up stock, and for the purpose of increasing current consumption.<\/p>\n\n\n\n

    Quantitative relationships between demand factors that shape the structure of purchases<\/h3>\n\n\n\n

    Numerous attempts have already been made to describe the quantitative relationships between the impact of the factors mentioned and the increase in sales resulting from sales promotions, in particular promotional lotteries. All the variables mentioned above are independent of one another, which means that statistical methods cannot be applied to them to calculate their impact on volume growth.<\/p>\n\n\n\n

    An interesting example is the behaviour of buyers of ground coffee, which has made it possible to identify correlations between switching brands, an increase in purchase frequency and stockpiling at 14\/84\/2 \u2013 14% of additional sales is generated during promotions because 84% of buyers switch their habits in favour of the promoted brand, whilst only 2% wish to build up a stock of the product in question. Such relationships can, of course, be identified for other product categories. They will vary, but the second determinant (brand switching) will always dominate. The increasing importance of the stock-building determinant can be observed in the case of products with a long shelf life. This is easy to understand when considering the example of a promotional prize draw for a selected brand of washing-up liquid (which can be stored for a long time) or yoghurt (which has a relatively short use-by date).<\/p>\n\n\n\n

    Experts are also seeking to establish cause-and-effect relationships between the outcomes (level of sales growth) generated by promotional campaigns and the characteristics of a given product category. The effects are directly proportional to the prevalence of a given product category and its propensity to be stocked (shelf life).<\/p>\n\n\n\n

    For the organiser of a promotional lottery, the level of profit depends on the increase in sales and the costs associated with organising the entire event. This is particularly important in the case of a promotional lottery, which involves a fee for the issue of an organising licence granted by the Director of the Tax Administration Chamber. These costs may include fixed costs (the level of which does not depend on the number of products sold, e.g. promotional communications) and opportunity costs (the loss of profit that would have been achieved had the price of the promoted product not been reduced).<\/p>\n\n\n\n

    In summary, organising a sales promotion such as a promotional lottery helps to boost sales because participants:<\/p>\n\n\n\n

    • are changing their shopping habits by choosing a different brand or shop,<\/li>
    • they buy the promoted product more often,<\/li>
    • They buy larger quantities of a product in a single purchase in order to increase their consumption or build up stocks.<\/li><\/ul>\n\n\n\n

      A properly planned promotional campaign should take into account the fact that winning over customers of competing brands is only effective if the rewards, communication and media are tailored to their lifestyle, expectations, beliefs and preferences. This fact is the hardest for brand and category managers to accept, but it is a decisive factor in success, which can be measured by an increase in market share.<\/p>","protected":false},"excerpt":{"rendered":"

      Zorganizowanie promocji sprzeda\u017cy (szczeg\u00f3lnie loterii promocyjnej) przyczynia si\u0119 do wzrostu sprzeda\u017cy promowanego produktu. Ze zjawiskiem tym zwi\u0105zane jest oddzia\u0142ywanie determinant popytu, takich jak: zmiana najcz\u0119\u015bciej kupowanej marki na promowan\u0105 (w przypadku retailer\u00f3w: zmiana punktu sprzeda\u017cy, w kt\u00f3rym dotychczas dokonywa\u0142o si\u0119 zakup\u00f3w), wzrost cz\u0119stotliwo\u015bci zakup\u00f3w oraz wzrost liczby kupionych jednostek produktu (w zwi\u0105zku ze wzrostem konsumpcji…<\/p>","protected":false},"author":2,"featured_media":1460,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-1459","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-aktualnosci"],"taxonomy_info":{"category":[{"value":18,"label":"Aktualno\u015bci"}]},"featured_image_src_large":["https:\/\/i360.com.pl\/wp-content\/uploads\/2021\/02\/loteria-promocyjna-wygrana.jpg",640,427,false],"author_info":{"display_name":"Tomasz Makaruk","author_link":"https:\/\/i360.com.pl\/en\/author\/autor\/"},"comment_info":0,"category_info":[{"term_id":18,"name":"Aktualno\u015bci","slug":"aktualnosci","term_group":0,"term_taxonomy_id":18,"taxonomy":"category","description":"","parent":0,"count":44,"filter":"raw","term_order":"0","cat_ID":18,"category_count":44,"category_description":"","cat_name":"Aktualno\u015bci","category_nicename":"aktualnosci","category_parent":0}],"tag_info":false,"_links":{"self":[{"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/posts\/1459","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/comments?post=1459"}],"version-history":[{"count":0,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/posts\/1459\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/media\/1460"}],"wp:attachment":[{"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/media?parent=1459"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/categories?post=1459"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/tags?post=1459"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}