Plexus recently hosted a webinar with Devon Rick, Managing Partner at IMI International, exploring pitfalls and best practices for running promotions in 2024. Dozens of key stakeholders in multiple industries, including FMCG, retail, sports, and food and beverage, from Australia and abroad, turned in to hone their promotional plans.
A trade promotion is a free-to-enter competition that is conducted by brands and businesses to promote their products and services to help gain a wider exposure. They come in many forms; some common examples include purchasing a product to claim free branded merchandise, and an Instagram Story giveaway draw.
Legislation requires that the specific act of entering these competitions must be free for all entrants as the main condition of holding the promotion. However promoters may choose to limit who is eligible to enter within their promotion’s terms and conditions. These T&Cs are legally required for every promotion and outline factors such as entrant eligibility requirements, and how the winner will be determined.
In short, yes. During the webinar, Rick noted that trade promotions are still a quick, easy and effective way to build exposure in physical and digital spaces if they are thought through strategically.
A promotion is not useful when a perfect storm of misaimed marketing, poor prize selection and unrealistic objectives combine. For example, an overly novelty prize that leans too heavily into a business’s brand heritage may only attract the most loyal customers, not new ones. Furthermore, the impractical – and perhaps also irrelevant – nature of the prize might then drive even the most devoted consumers away, instead of more sales and participation. The result? A massively underperforming promotion that does little to build brand nor the bottom line.
In Australia, many states do not require businesses to apply for a permit to run a promotion, which makes them an appealing contribution to their marketing strategy. However, that is not to say promotions are not bound by rules. Failure to abide by regional jurisdiction and a lack of legal due diligence can risk fines, customer dissatisfaction and even legal repercussions.That said, check out this guide for a detailed breakdown of the various regulations and legislation that may be applicable to your promotion.
There are three main motivators for running a promotion:
Building the brand by appealing to customer values
Enhancing trade relationships (between a goods/services company and a retailer, for example)
Driving sales and volume
As Rick explains, companies often try to have their promotions meet all three goals, instead of focusing on just one, which usually leads to failure. A clearly defined objective helps crystallise the intentions of the promo.
As Rick explains, companies often try to have their promotions meet all three goals, instead of focusing on just one, which usually leads to failure. A clearly defined objective helps crystallise the intentions of the promo.
"When the right thing is done well, the other things become byproducts.”
His preference is for promotions that increase volume.
“I’m a big fan when people are unapologetically focused on maximising volume. I think everyone wins in this instance. You see huge overlap between brand and trade when it comes to running a good volume promotion.”