UNIVERSITY OF GHENTlib.ugent.be/fulltxt/RUG01/001/458/062/RUG01-001458062_2011_0001... ·...

UNIVERSITY OF GHENT

FACULTY OF ARTS AND PHILOSOPHY

ACADEMIC YEAR 2009-2010

SALES PROMOTIONS: A MANUFACTURER’S PERSPECTIVE

Masterproef submitted in fulfilment of the requirements for the degree of

Master in Multilingual Business Communication

Ans Ginneberge

Promoter: Prof. dr. G. Jacobs

I

Bedrijf Stagebegeleider Afdeling Taken Talen tijdens

de stage

Stageperiode

Naam : Sara Lee Coffee & Tea

Belgium

Straat : Potaarde

Postnummer + Gemeente :

1850 Grimbergen

Telefoon : 02/260 06 11

Pascal Deckers Trade Marketing - Promoties: evaluaties van promoties bij de topklanten met aanbevelingen naar het management / REPRO tool verder uitbouwen (= internationale promo evaluatie tool)

- Business Reviews: ontwikkelen van category strategy voor de topklanten, in samenwerking met Marie (trade marketeer)

- Customer visits: ondersteuning van de Key Account Managers met krachtige argumenten en visueel sterke presentaties.

Nederlands,

Engels, Frans

28/04/2010

–

30/09/2010

II

ACKNOWLEDGEMENTS

This dissertation results from a four month lasting internship at Sara Lee in combination with

a lot of weekends and evenings of hard work. Evidently, I would not have been able to

complete this assignment successfully without the help of some people. Therefore I would

like to thank all of them.

First I would like to thank all my colleagues at Sara Lee for making the internship a very

pleasant and instructive experience. I especially want to thank Pascal Deckers and Marie

Andrieu, who were my supervisors. Thank you for teaching me a lot of new things and for

giving me a lot of responsibility.

Second, I would like to thank my friends. They were really supportive when I had to work

hard during the summer holidays and were always available for some fun activities when I

needed it.

Finally, I would like to thank my parents. Thank you for giving me the opportunity to study

an extra year and for encouraging me to pursue my dreams.

III

TABLE OF CONTENTS

List of tables

List of figures

INTRODUCTION ................................................................................................................................................................... 1

TRADE MARKETING: A DEFINITION ............................................................................................................................. 2

CHAPTER 1: COMPANY PRESENTATION ..................................................................................................................... 3

INTRODUCTION .......................................................................................................................................................................................... 3

1 COMPANY HISTORY ........................................................................................................................................................................ 4

2 FINANCIAL INFORMATION ............................................................................................................................................................. 5

3 CORPORATE IDENTITY ................................................................................................................................................................... 7

3.1 Mission statement ........................................................................................................................................................... 7

3.2 Vision statement .............................................................................................................................................................. 8

3.3 Values .................................................................................................................................................................................. 8

4 PRODUCTS ....................................................................................................................................................................................... 9

4.1 Coffee ................................................................................................................................................................................... 9

4.1.1 Multi Serve ........................................................................................................................................................................................ 10

4.1.2 Single Serve....................................................................................................................................................................................... 12

4.1.3 Other coffee products .................................................................................................................................................................. 13

4.2 Tea ..................................................................................................................................................................................... 14

5 CLIENTS ........................................................................................................................................................................................ 14

5.1 Colruyt .............................................................................................................................................................................. 14

5.2 Delhaize group .............................................................................................................................................................. 15

5.3 Carrefour group ............................................................................................................................................................ 15

6 COMPETITION .............................................................................................................................................................................. 16

6.1 Private Label .................................................................................................................................................................. 16

6.2 National brands ............................................................................................................................................................ 17

6.2.1 Rombouts ........................................................................................................................................................................................... 17

6.3 Nescafé Dolce Gusto .................................................................................................................................................... 18

7 SWOT-ANALYSIS .......................................................................................................................................................................... 20

7.1 Strengths ......................................................................................................................................................................... 20

7.2 Weaknesses..................................................................................................................................................................... 21

7.3 Opportunities ................................................................................................................................................................. 21

7.4 Threats ............................................................................................................................................................................. 21

IV

CHAPTER 2: THEORETICAL FRAMEWORK .............................................................................................................. 22

INTRODUCTION ....................................................................................................................................................................................... 22

1 THE IMPORTANCE OF SALES PROMOTIONS .............................................................................................................................. 23

2 TYPES OF PROMOTIONS .............................................................................................................................................................. 24

3 IMPACT OF PROMOTIONS ON RETAILERS’ AND MANUFACTURERS’ SUCCESS ...................................................................... 28

4 VOLUME INCREASE DUE TO CATEGORY DEMAND EFFECTS OR BRAND SWITCHING? ......................................................... 29

5 DRIVERS OF CATEGORY DEMAND ELASTICITY......................................................................................................................... 30

6 ADVERTISING VERSUS SALES PROMOTIONS............................................................................................................................. 31

7 WHY DO CONSUMERS RESPOND TO SALES PROMOTIONS? .................................................................................................... 32

8 CONCLUSION ................................................................................................................................................................................ 34

CHAPTER 3: THE INTERNSHIP .................................................................................................................................... 36

1 PROMOTIONS AT SARA LEE ....................................................................................................................................................... 36

2 PROMOTION EVALUATION ......................................................................................................................................................... 36

2.1 Data collection .............................................................................................................................................................. 37

2.2 The template .................................................................................................................................................................. 39

2.3 Analysis ............................................................................................................................................................................ 40

2.4 Conclusion and recommendation .......................................................................................................................... 41

2.5 Evaluation of the promotion evaluation process ............................................................................................ 41

3 OTHER ASSIGNMENTS ................................................................................................................................................................. 42

3.1 Updating of reports ..................................................................................................................................................... 42

3.2 Sales analysis ................................................................................................................................................................. 43

3.3 Customer management homepage ....................................................................................................................... 43

3.4 Other ................................................................................................................................................................................. 43

CHAPTER 4: CONCLUSION ............................................................................................................................................. 44

INTRODUCTION ....................................................................................................................................................................................... 44

1 KEY LEARNING POINTS ................................................................................................................................................................ 44

2 FEEDBACK ON MTB PROGRAM ................................................................................................................................................. 45

3 CONCLUSION ................................................................................................................................................................................ 46

BIBLIOGRAPHY ................................................................................................................................................................. 47

ANNEX .................................................................................................................................................................................. 49

V

LIST OF TABLES

Table 1 Key financials Sara Lee (www.beursduivel.be ) .......................................................................... 5

Table 2 Overview of promotion types ................................................................................................... 27

LIST OF FIGURES

Figure 1 Evolution Sara Lee share price in the last five years (www.beursduivel.be) ............................ 6

Figure 2 Corporate identity Sara Lee ....................................................................................................... 7

Figure 3 Values of Sara Lee...................................................................................................................... 8

Figure 4 Positioning of Sara Lee coffee brands ..................................................................................... 10

Figure 5 Sara Lee vacuum assortment .................................................................................................. 11

Figure 6 Sara Lee Anvar assortment ...................................................................................................... 11

Figure 7 Douwe Egberts Aromettes ...................................................................................................... 12

Figure 8 Sara Lee Single Serve assortment ............................................................................................ 13

Figure 9 Rombouts Multi Serve assortment.......................................................................................... 18

Figure 10 Nescafé Dolce Gusto: assortment available at retailers ....................................................... 18

Figure 11 Nescafé Dolce Gusto: assortment available exclusively in the online shop .......................... 19

Figure 12 Swot analysis ......................................................................................................................... 20

1

INTRODUCTION

Last year I graduated as a Commercial Engineer. Although this education provided me with a lot

theoretical knowledge, I felt like I missed some practical knowledge to start working. Therefore, I

decided to start the MTB program. This extra education would help me to gain practical experience

and at the same time improve my language skills.

Because of my background as a Commercial Engineer with a specialisation in marketing, I decided to

look for an internship at the marketing department of an international company. I started to browse

the company website of all well-known consumer goods companies. One announcement

immediately caught my attention: a five month internship as a Trade Marketer at Sara Lee. Although

doing an internship for five months would mean I would miss out on the summer holidays, I was

really enthusiastic about this internship. Luckily I was accepted and now, four months later, I am still

very pleased with my decision.

This dissertation consists of four chapters. The first chapter contains a company description of Sara

Lee. The second chapter provides a theoretical framework about the growing importance of sales

promotions. In the third chapter, I will give an overview of the different tasks I performed during my

internship. Finally, in the fourth chapter I discuss my personal experience with the internship and

MTB.

2

TRADE MARKETING: A DEFINITION

“Het beoefenen van marketing met de handelspartner of retailer als klant. Het begrip

weerspiegelt de ontwikkeling waarbij de fabrikanten de retailers traditioneel als doorgeefluik

gebruikt hebben, en waarbij zij vandaag die retailer als een volwaardige (en machtige !)

gesprekspartner ervaren. Op het meest operationele niveau, beperkt trade marketing zich in

de bedrijven tot zuivere trade marketing verkoopspromotie en ondersteuning van

accountmanagement. Meer strategisch evolueert trade marketing naar een synoniem van

'customer business development' en channel development.”

“Trade marketing wordt gevormd door alle marketinginspanningen van de leverancier die

gericht zijn op de schakel tussen fabrikant en consument, de retail, teneinde - in een

permanente op win-win gerichte samenwerking met deze schakel - te komen tot optimale

proposities voor de producten en diensten van de leverancier en de

assortimentscategorie waar de producten en diensten toe behoren om aldus de shopper

extra te stimuleren tot koop van het merk van de productcategorie waarbinnen de

producten vallen.”

(http://www.trademarketingassociation.nl/index/read/pagesID/105/criteria/definitie)

(http:/www.trademarketingassociation.nl/index/read/pagesID/105/criteria/definitie

CHAPTER 1: COMPANY DESCRIPTION 3

CHAPTER 1: COMPANY PRESENTATION

INTRODUCTION

The objective of this chapter is to provide the reader with the most relevant information about Sara

Lee Coffee and Tea Belgium. Sara Lee Coffee and Tea Belgium is a division of the international

company Sara Lee. Therefore, some of the information will focus on Sara Lee Corporation and other

sections will focus on the Belgium Coffee and Tea division.

In the first section of this chapter, I will give a description of the company. In the second section,

some financial information is provided. Next, I will discuss the corporate identity of Sara Lee. Fourth,

I will provide an overview of the product assortment of Sara Lee Coffee and Tea Belgium followed by

an overview of the most important clients. In the sixth section, the competition of Sara Lee is

discussed. Finally, I will make a SWOT analysis of the company.

This chapter is based on information of the global Sara Lee website, the brand websites and my

personal experience working in the company for the past four months.

In order to increase the readability of this dissertation, I will use the abbreviation SL C&T to refer to

Sara Lee Coffee and Tea Belgium.


1 COMPANY HISTORY

This section focuses on the origin of SL C&T. Because Douwe Egberts is the leading brand of the

company, I chose to write this section from a Douwe Egberts perspective.

Douwe Egberts has been a coffee manufacturer for more than 250 years now. The origins of the

company are to be found in The Netherlands. In 1753, Egbert Douwes and his wife Akke Thijsses

opened their first store. In this store all sorts of colonial products were sold, the most important ones

being coffee, tea and tobacco. Business went well for the family and in 1919, Douwe Egberts started

to operate on a national scale. And the success story continued, after the Second World War Douwe

Egberts started its international expansion, opening subsidiaries in France, Spain, Denmark and, in

1948, Belgium.

In Belgium, the first Douwe Egberts store was located in Antwerp and was focused on the selling of

tobacco. It was not until a few years later that the first packages of roasted coffee were sold. The

activities of Douwe Egberts in Belgium continue to grow and in 1969 the company opened a

distribution centre in Grimbergen. In the early nineteen seventies, the Grimbergen site was

expanded further with an office building and a factory, forming Douwe Egberts Belgium as it is today.

In 1978, another major change took place, Douwe Egberts formed an alliance with the American

company Consolidated Foods, better known as Sara Lee. This alliance, together with some other

acquisitions, led to the foundation of Sara Lee/DE in 1984. In 1986, the takeover of Jacqmotte and

Chat Noir amplified the brand portfolio and made it into what it is today.

The last milestone in the history of Douwe Egberts is the introduction of Senseo in 2001. Senseo, an

innovative product that originated from an intense collaboration between Douwe Egberts and

Philips, meant a true revolution in the coffee market. Thanks to this invention, it is now possible to

quickly make one cup of coffee. The machine proved to be a success as in the first four year after the

launch more than fifteen million machines were sold worldwide.


2 FINANCIAL INFORMATION

Sara Lee is a global manufacturer of consumer products reporting Net Sales of 10,8 billion dollars for

fiscal year 2010. The company consists of 6 business units: North American Fresh Bakery, North

American Retail, North American Foodservice, International Beverage, International Bakery and

International Household and Body Care. This last business unit will be discontinued in the next year.

In the table below, the key financial information about Sara Lee is shown.

TABLE 1 KEY FINANCIALS SARA LEE (WWW.BEURSDUIVEL.BE )

When we take a closer look at the share price of Sara Lee over the past five years, we can clearly see

the impact of the financial crisis that hit the entire world in the summer of 2007. The share price

reached an all-time low in March of 2009. Since then, the share price has kept increasing gradually.


FIGURE 1 EVOLUTION SARA LEE SHARE PRICE IN TH E LAST FIVE YEARS (WWW.BEURSDUIVEL.BE)

In the beginning of August, Sara Lee published the results of fiscal year 2010. Sara Lee reported

strong results for all six business units. These strong results were driven by improved operating

income across all five continuing business units. Especially North American Retail and International

Beverages showed impressive results. But also the discontinued International Household and Body

Care reported strong results.

SL C&T Belgium is part of the International Beverages business unit and thus contributed to the

strong results of fiscal year 2010. However, it will be very challenging to obtain the same results in

2011. The reason for this is to be found in the skyrocketing coffee prices.

In August, coffee prices reached a twelve-year high (www.businessweek.com, 30.07.2010). Because

of this enormous raise in the price of raw materials, the profit of the company will suffer. Therefore,

the company is obliged to take measures if they want to preserve their profit. One of the measures

taken by SL C&T is an increase of the consumer price of 4,5%. (www.ten-brink.nl) Furthermore, the

company is closely monitoring all expenses in order to save costs wherever possible.

http://www.beursduivel.be/

http://www.businessweek.com/

http://www.ten-brink.nl/


3 CORPORATE IDENTITY

This section deals with the three key pillars for having a successful business: the mission, vision and

values.

FIGURE 2 CORPORATE IDENTITY SARA LEE

3.1 MISSION STATEMENT

The mission of a company clarifies the identity of the company, it states the reason why a company

exists. With its mission statement the company communicates the overall objective of the company

to its stakeholders. By stating such an overall objective the company makes sure that everyone in the

company strives toward the same goal.

The mission statement of Sara Lee is the following:

“To simply delight you… every day.”

This mission statement leads us to conclude that Sara Lee will offer every-day products and services

that will bring joy to the consumer. However, the mission does not specify what type of products the

company will offer. This means that as long as products meet the criteria of delighting people, they

are candidates to enter the assortment of Sara Lee.

When we put the mission statement to the test by taking a closer look at the wide range of products

produced by Sara Lee worldwide at the moment, it becomes clear that the mission statement has

been put into practice successfully.

•To simply delight you... every day.Mission

•To be the first choice of consumers and customers around the world by bringing together innovative ideas, continuous improvement and people who make things happen.

Vision

•Act with integrety•Use imagination•Be inclusive•Work as a team•Have a passion to excell

Values


3.2 VISION STATEMENT

Whereas the mission of a company focuses on the present situation, the vision of a company reflects

its aspirations for the future.

“To be the first choice of consumers and customers around the world by bringing together innovative

ideas, continuous improvement and people who make things happen.”

With this vision statement, Sara Lee indicates what it wants to achieve in the future and how it is

planning to do this. This leads us to conclude that Sara Lee wants to be a market leader in all

segment in which it operates. To reach this market leader position, they will focus on innovation,

continuous improvement and people management.

During my internship, one of the first introduction sessions I had was related to continuous

improvement. This shows that the vision of the company has really got across to all employees.

Therefore, I conclude that the vision is also put into practice successfully.

3.3 VALUES

The third pillar of success is the values respected in the company. These are the crucial

characteristics that are shared throughout the company and that are necessary to realise the

mission.

Sara Lee emphasises five values that are essential to the company.

FIGURE 3 VALUES OF SARA LEE

The first value of Sara Lee is to act with integrity, model and inspire high levels of integrity and trust.

Secondly, Sara Lee highly values the use of imagination. The company wants it employees to

Act with integrety

Use imagination

Be inclusive

Work as a team

Have a passion to excell


challenge the way things have been done in the past, by seeking exposure to new ideas and new

ways of looking at things. The third value is inclusiveness, hereby Sara Lee wants to proactively

develop a culture where people with diverse perspectives, styles and experiences feel valued,

included and enabled to contribute to business success. Fourthly, teamwork is an import value, Sara

Lee aims at building teams that achieve great things together. The last value is to have a passion to

excel, to enthusiastically contribute to the success of Sara Lee.

4 PRODUCTS

In the following section, I will present the products produces by Sara Lee. I will only elaborate on the

products produced by SL C&T as this is the department where I did my internship.

SL C&T manufactures a broad range of products. Obviously the two major categories that can be

distinguished are coffee and tea.

4.1 COFFEE

Within the coffee category, Sara Lee C&T Belgium is present with three brands: Douwe Egberts,

Jacqmotte and Chat Noir. Each of these three brands has a specific positioning in order to minimise

cannibalisation between brands.

Douwe Egberts has the largest share within the brand portfolio. This brand is positioned as a

qualitative coffee that brings sociability to everyone’s home. (“Het ruikt hier naar Douwe Egberts”)

The second brand is Jacqmotte. In the communications about Jacqmotte the focus is on the aroma.

(“Jacqmotte. Schepper van aroma”) Therefore it can be concluded that Jacqmotte is a more premium

coffee brand. Finally, Chat Noir, is the fighter brand of Sara Lee. This means that the price of Chat

Noir is lower than that of Douwe Egberts and Jacqmotte and therefore the gap with the private label

brands is less big. Chat Noir is of particular importance in the south of Belgium, however it is

distributed in the whole country.


FIGURE 4 POSITIONING OF SARA LEE COFFEE BRANDS

Sara Lee does not only offer different brands, but also different types of products. Two main

categories can be distinguished: Multi Serve and Single Serve. In the next sections, I will further

elaborate on these segments.

4.1.1 MULTI SERVE

The first segment that can be distinguished within the coffee category is Multi Serve. Multi Serve

refers to the fact that coffee is made for different people at the same time. This type is coffee is

made using a traditional filter coffee machine.

Within this segment a further distinction can be made based on the type of packaging. Firstly, a

vacuum pack can be used. This is the oldest type of packaging and it is still the most used type within

the Multi Serve segment. The vacuum pack is made in two sizes, 250g and 500g, and is used for all

three Sara Lee brands, Douwe Egberts, Jacqmotte and Chat Noir. In the figure below, an overview

can be found of the different flavours that exist within this segment.

• Jacqmotte

Premium brand

• Douwe Egberts

Main brand

• Chat Noir

Fighter brand


FIGURE 5 SARA LEE VACUUM ASSORTMENT

The second type of packaging that can be used is the box also referred to as Anvar. Anvar packaging

is used for the more premium products. The majority of Jacqmotte varieties are sold in these boxes,

which is in line with the premium brand positioning. However, also Douwe Egberts coffee is available

in Anvar packaging.

FIGURE 6 SARA LEE ANVAR ASSORTMENT

The last packaging method is to put the coffee in a cane. This type of packaging is used for the latest

innovation of Douwe Egberts, the Aromettes. In fact, it is not the cane that makes this product

innovative, the innovation is to be found in the production process. This production process contains

an extra step compared to the traditional process. To create the bean-shaped Aromettes, the coffee

is compressed after roasting it, whereby the best of the aroma is contained in the centre of the bean.

In this way the Aromettes offer a more aromatic coffee compared to the vacuum varieties. The

second advantage of the Aromettes is the ease of dosage. Because one Aromettes bean equals one

measure, the struggle with measures is no longer necessary. The Aromettes have entered the market

at the end of August 2010, therefore it is still unclear if the customers will appreciate the product. It


will be very interesting to see if the Aromettes can generate on top sales for Douwe Egberts or if they

will cannibalize on the other brands.

FIGURE 7 DOUWE EGBERTS AROMETTES

4.1.2 SINGLE SERVE

In 2001, Douwe Egberts and Senseo revealed the result of their partnership: Senseo. With this

innovation, Douwe Egberts wanted to capitalise on the changed needs and wants of the coffee

drinkers. Because society had become increasingly individual and the number of persons within each

household had declined, the traditional coffee was no longer fit to fulfil all these needs. Senseo made

it possible to quickly make an individual cup of coffee and this with a wide range of flavours.

Apparently, this was exactly what the coffee drinker was waiting for. Senseo quickly captured market

share.

Senseo offers 4 ranges of products: Senseo Mainstream, Senseo Selections, Senseo City Sensations

and Senseo Indulgences. Senseo Mainstream is responsible for the majority of the Senseo sales, the

other products are referred to as satellites.

Following the success of Senseo, Sara Lee introduced Douwe Egberts pads and Jacqmotte pads.

Again, these product introductions have proved to be very successful, especially the Douwe Egberts

pads which continue to gain market share.


FIGURE 8 SARA LEE SINGLE SERVE ASSORTMENT

4.1.3 OTHER COFFEE PRODUCTS

Next to the Multi Serve and Single Serve segment, Sara Lee also produces instant coffees, filter

coffees, beans and ice coffees, referred to as ready-to-drink.

The instant coffee segment has been available for more than fifty years now, but only receives minor

marketing support. Similarly, the beans and filter coffees are part of the assortment but are rarely

supported with advertising or promotions.

The ready-to-drink segment, in contrast, has only been introduced last year and the product range

has been extended this summer. In June of this year, Douwe Egberts introduced Ice Cappuccino and

Ice Macchiato. These ice coffees are made with fresh milk and therefore are to be found in the

refrigerators of the supermarket. The introduction of the new products was supported with an

extensive marketing campaign, which consisted of a television commercial, advertising on bus

shelters, in-store sampling and couponing.


4.2 TEA

In the tea segment, Sara Lee C&T Belgium offers one brand, Pickwick. The name Pickwick was used

for the first time in 1936, but the tea has been available for as long as Douwe Egberts exists, since

1753.

The assortment offered by Pickwick can be divided into four categories: black tea, green tea, herbal

tea and fruit tea. Within each of these categories, different flavours are available.

5 CLIENTS

Sara Lee is a consumer goods firm and therefore the end goal is to sell as many products as possible

to the end-consumers. However, the end-consumers cannot buy the products, when these are not

available in the supermarkets. Therefore the clients of SL C&T are the retailers.

In Belgium, Sara Lee products are available in almost every supermarket. However, the majority of

Sara Lee sales take place at three retail groups: Colruyt, the Carrefour Group and the Delhaize Group.

Because of the importance of these three retailers, which all have a market share of approximately

25%, I will present their main characteristics in the next section.

(http://www.retailactueel.com/941006/drie-supermarktketens-strijden-om-marktleiderschap-belgië)

5.1 COLRUYT

Colruyt has continued to grow in the last couple of years. Depending on the source, Colruyt is the

market leader or the second player in the Belgian retail market. The key to the success of Colruyt is

to be found in their positioning. Colruyt is known for its low-price policy. Colruyt guarantees the

lowest price for all products and this at all times. This means when other retailers offer a promotion

to their customers, Colruyt will adjust their price accordingly. This policy has important consequences

for the manufacturers. That is, when their products are being promoted in one supermarket, Colruyt

will adjust the price as well. Therefore, manufacturers have to take this into account when planning

their promotions budget. (www.colruyt.be)

http://www.retailactueel.com/941006/drie-supermarktketens-strijden-om-marktleiderschap-belgi%C3%AB

http://www.colruyt.be/


5.2 DELHAIZE GROUP

Delhaize positions itself as a high quality supermarket chain. In Belgium, Delhaize Group operates

with different brand names. These different brands differ in there store size, specialty and

exploitation. The first brand name is Delhaize “De Leeuw” supermarket. This is the leading chain of

Delhaize in Belgium. The second largest chain of Delhaize Group is AD Delhaize. In the past years, this

has been the most important source of growth for Delhaize in Belgium. The next brand is Delhaize

city. These stores can be defined as neighbourhood stores in the city where only own brands are

sold. Fourth, there are the Proxy Delhaize stores, characterized by their emphasis on fresh products

and own-label products. The fifth shop concept is Shop’n Go. These stores are located at gas stations

and want to reach customers that value proximity, facility and longer opening hours. Finally, in 2009,

Delhaize introduced a new shop style, Red Market. With these shops, Delhaize wants to capitalize on

the increasing importance of discount stores. The Red Market shops combine a low pricing strategy

with the offer of high quality products, which is the strength of Delhaize. (www.delhaizegroup.com)

5.3 CARREFOUR GROUP

Carrefour Group was the market leader in Belgium in 2009. However, Carrefour has lost this position

in the last year due to reorganisations and now is the third player in the retail market.

In Belgium, Carrefour has three different store formats: Carrefour Hyper, Carrefour Market and

Carrefour Express.

Carrefour Hyper is the hypermarket of the Carrefour Group and offers an extensive range of both

food and non-food products. Carrefour Market, previously known as GB, is the brand that Carrefour

uses for their supermarkets. Finally, Carrefour Express are the convenience stores of Carrefour.

These are characterised by their flexible opening hours and their nearby location.

Carrefour wants to position itself as a feel-good store where customers feel at ease and can find

qualitative products. (www.carrefour.eu)

http://www.delhaizegroup.com/

http://www.carrefour.eu/


6 COMPETITION

In the next section, I will present the main competitors of Sara Lee. When strolling through the coffee

aisle in the supermarket, it becomes clear that the Sara Lee brands fill up an important part of the

shelf space. The remaining shelf space is mostly filled with private label brands. Therefore in this

section I will go into detail into the characteristics of these private label brands and why these are so

important in the current retail environment. Furthermore, I will briefly present the main A-brand

competitors of Sara Lee in both the Multi Serve and Single Serve segment.

6.1 PRIVATE LABEL

Private label products are products that are owned by the retailer. They are manufactured by a, to

the customer, unknown manufacturer, and sold with the retailers brand name. Consequently, the

products are exclusively available at this specific retailer. Thus, the clients of Sara Lee are at the same

time its most important competitors.

Examples of private labels are Delhaize,365 by Delhaize, Graindor by Colruyt, Carrefour and

Carrefour Selection.

In general, the packaging of the private label products is much simpler than the A-brands and they do

not use marketing campaigns. Therefore the costs of producing a private label product are

considerably lower than for their branded counterparts, leading to a lower price. Since the nineteen

nineties private labels have gained importance in the retail industry, attaining a value share of 30% in

2008 (AC Nielsen).

The most obvious explanation for the increasing success of private labels is the slacking economy

which leads customers to search for money-saving products. However, the research agency

SymphonyIRI has investigated this subject and came to the conclusion that the economic conditions

is only one of four explanatory factors for private label success. The other three factors that have a

major influence on the market share of private labels are: store concentration, store execution and

the reputation of the private label. The higher the retailer scores on these three factors, the better

the private label brands will perform, especially in combination with difficult economic times.

The previous explanation for private label success especially focuses on the reasons why customers

buy private label product, but private labels also offer several benefits to the retailers. Firstly, adding

private labels to the assortment gives retailers the opportunity to set themselves apart from the

competition and in this way increase shopper loyalty. Obviously the image of the retailer will have a

huge influence on the quality perception of the private label products. However, also the opposite is


true. When retailers offer high- quality private label products, this will have a positive influence on

the store perception. Secondly, retailers gain higher margins on private labels than on national

brands and thus can improve there profit by selling private label products. However, private labels

are not necessarily profitable as the also bring along addition costs and take away shelf space from

the national brands. Thirdly, private labels can improve the negotiation power of the retailers. This is

related to the store loyalty private label brands can create. When store choice precedes brand

choice, retailers have the strongest position in the negotiation process. Finally, private label can

increase category sales, which results in a greater turnover for the retailer.

In conclusion, both consumers and retailers can gain advantages of private label products. Therefore

retailers offer a vast assortment private label products. Similar to the Sara Lee assortment, retailer

offer premium brands, main brands and discount brands.

(http://www.marketingonline.nl/nieuws/bericht/economische-recessie-geen-voorwaarde-groei-

winkelmerken/

http://nl.wikipedia.org/wiki/Huismerk_(product)

http://be.nl.acnielsen.com/site/documents/Nielsenvoedingsuniversum2009.pdf)

6.2 NATIONAL BRANDS

As mentioned above, the Sara Lee brands and the private label products occupy the majority of the

shelf space. Therefore, I will limit myself to the presentation of one additional competitor in the

Multi Serve segment and one in the Single Serve segment.

6.2.1 ROMBOUTS

In 1896, Rombouts was founded by Frans Rombouts in Antwerp. This was the beginning of a

successful family business. In 1958, on the occasion of the World’s fair, Rombouts invented the

individual coffee filter. Nowadays they are still the largest player within this segment. In 1968,

Rombouts joins forces with Cafés Malongo, a French coffee roaster and in this way expands its

territory. Then, 15 years ago, Rombouts launched 1,2,3 Spresso. These espresso doses made it

possible to very quickly make a cup of espresso.

Although Rombouts offers both Multi Serve and Single Serve products, it are especially the Multi

Serve products and the coffee filters that are available in the stores. As can be seen in figure 9

Rombouts offers both the regular coffee flavours as some specialty products. (www.rombouts.com)

http://www.marketingonline.nl/nieuws/bericht/economische-recessie-geen-voorwaarde-groei-winkelmerken/


http://nl.wikipedia.org/wiki/Huismerk_(product)

http://be.nl.acnielsen.com/site/documents/Nielsenvoedingsuniversum2009.pdf

http://www.rombouts.com/


FIGURE 9 ROMBOUTS MULTI SERVE ASSORTMENT

6.3 NESCAFÉ DOLCE GUSTO

In the September 2009, a new player entered the Single Serve market, Nescafé Dolce Gusto. Nescafé

Dulce Gusto is a product of Nestlé and the machines are made by Krups. With Dolce Gusto, Nestlé

wanted to position itself between Senseo and Nespresso. The main difference with Senseo is that the

Dolce Gusto machine uses a pressure of 15 bar, as opposed to approximately 1,5 bar for Senseo.

Nespresso machines use an even higher pressure, 19 bar, and are more exclusive as the cups are not

available in the supermarket.

The introduction of Dolce Gusto was supported with a lot of marketing activities, such as in-store

presentations. This was necessary to familiarise the customers with the machine and to emphasize

the benefits it offered.

Dolce Gusto offers a wide product range, most of which are coffee specialties. The figure below

shows the assortment that is available in the supermarkets. (www.dolce-gusto.be)

FIGURE 10 NESCAFÉ DOLCE GUSTO: ASSORTMENT AVAILABLE AT RETAILERS

http://www.dolce-gusto.be/


FIGURE 11 NESCAFÉ DOLCE GUSTO: ASSORTMENT AVAILABLE EXCLUSIVELY IN THE ONLINE SHOP

If Dolce Gusto becomes a very successful, this is a major threat for Senseo. The reason for this threat

is that Senseo and Dolce Gusto use a different type of machine. Therefore, when customers trade in

their Senseo machine for a Dolce Gusto machine, they can no longer use Senseo pads. However, as

Dolce Gusto primarily offers specialty coffees and Senseo also offers a wide range of mainstream

products, it can be assumed that Senseo will be able to preserve its sales.


7 SWOT-ANALYSIS

FIGURE 12 SWOT ANALYSIS

7.1 STRENGTHS

Because Sara Lee C&T is a subdivision of Sara Lee, it can benefit from the global support and

experiences of other businesses. For example, new product innovations are shared and if they are

suited for the Belgian market, they can easily be introduced.

As mentioned in the section 5 (Products), Sara Lee C&T manufactures products with different brand

names. Thanks to this diversified brand portfolio, Sara Lee can address a wide range of consumers.

The third strength of the company is that is the market leader in the coffee segment. This position

makes it easier to negotiate with the retailers.

Finally, product innovations, such as Senseo in the past and more recently Aromettes, are a strength

for the company. By introducing new products, the company can increase its market share and

differentiate itself from the competition.

Strengths

• supported by international group

• brand portfolio

• market leader

• innovations

Weaknesses

• dependence on Senseo machine

Opportunities

• new product introductions f.e. espresso capsules

Threats

• Increasing price of coffee

• Private label

Sara Lee C&T


7.2 WEAKNESSES

An important weakness of Sara Lee is the dependence on the Senseo machine. When consumers

decide to switch to another type of coffee machine, Sara Lee will lose all sales from the Single Serve

segment

7.3 OPPORTUNITIES

Related to the weakness of Sara Lee, introducing espresso capsules, compatible with the Nespresso

machines, might be an excellent opportunity for Sara Lee to strengthen its position. Sara Lee has

already successfully introduced L’Or espresso capsules in France and thus has the knowledge to do

this in Belgium as well.

7.4 THREATS

I have already mentioned in the financial information that the price of raw materials has reached an

all-time high in August. If coffee prices continue to be this high or even continue to increase, this is a

major threat for the profitability of SL C&T.

A second threat is private label. Private label products already account for a huge part of the sales in

the coffee category and a further increase of their market share could be a huge threat for SL C&T.

CHAPTER 2: THEORETICAL FRAMEWORK

22

CHAPTER 2: THEORETICAL FRAMEWORK

INTRODUCTION

One important part of the job responsibilities of a Trade Marketer is the evaluation of past

promotions and providing recommendations for the promotion policy of the company. Because I was

closely involved in this process during my internship, I chose to put the focus of this dissertation on

sales promotions. In this chapter, I will give an overview of some important research findings about

promotions. In the next chapter, I will focus on the evaluation of sales promotions at Sara Lee and my

input in the process.

In the first section of this chapter the importance of sales promotions will be addressed. Second, I

will give an overview of the different promotion types that exist and their strengths and weaknesses.

Third, the impact of promotions and both retailers’ and manufacturers’ success is evaluated. Next,

the brand sales increase due to sales promotions is broken up into category demand increase and

brand switching. Fifth, the drivers of category demand elasticity are identified. Subsequently, the

drivers of manufacturers’ budget allocations between advertising and promotions are discussed. And

finally, the reasons why consumers respond to promotions are identified.

CHAPTER 2: THEORETICAL FRAMEWORK 23

1 THE IMPORTANCE OF SALES PROMOTIONS

In the past decades, sales promotions have gained importance in the marketing communications mix.

In the nineteen eighties American companies spent 44% of their advertising and promotions budget

on advertising. Twenty years later, sales promotions still dominate the budgets, even more than

before. The same trend is found in Europe. According to different sources, advertisement took up

60% of the advertising and promotions budget in the UK in the nineteen eighties. Nowadays, the

balance has shifted in favour of the sales promotions, which now represent 70% of the budget. (De

Pelsmacker, 2007)

De Pelsmacker (2007) presents seven explanations for this increased importance of sales promotions.

Firstly, the number of products and brands available has increased tremendously. At the same time

the functional difference between brands have become less important. As a consequence,

manufacturers meet with difficulties to differentiate their brands using advertising. Therefore, they

resort to sales promotions to attract the shopper’s attention and persuade him to buy the product.

Secondly, individual ads get lost in communications clutter and are hardly noticed by consumers. This

can be explained by two phenomena. First, the omnipresence of advertisements can lead to brand

confusion. This means that consumers have seen the advertisement but do not remember the

advertised brand or, even worse, link the advertisement to the competitor. Second, advertising

avoidance is an increasingly important phenomenon and is mostly related to irritation. Consumers

simply do not longer want to watch advertising.

Thirdly, consumers are less brand-loyal and are becoming more and more price-conscious. As a

consequence, consumers are increasingly interested in promotions.

Furthermore, research has shown that the majority of buying decisions takes place in-store. Because

the customers still have to be convinced to buy the product in the retail environment, in-store

communications, such as promotions, have become very important.

The fifth reason for the increased importance of sales promotions is linked to the manufacturers.

Nowadays, manufacturers are more short-term oriented. Because the effects of advertising are only

visible in the long-run, these mechanisms are no longer interesting to the manufacturer. Therefore

they prefer sales promotions, as these have immediate results.

Next, the effects of sales promotions are more easily measured than the effects of advertising. Brand

managers are very pleased with this characteristic.


Finally, retailers have become more powerful. By consequence, manufacturers have to offer them

interesting deals in order to get enough shelf space. Promotions are a frequently used technique to

persuade the retailers.

2 TYPES OF PROMOTIONS

In this section I will give an overview of the different types of sales promotions that can be

distinguished. This overview is based on the classification of De Pelsmacker (2007).

All sales promotions can be grouped in three categories based on the type of incentive they use.

The first category is the sales promotions that use a monetary incentive. These promotions have in

common that they lead to an improved price/quality perception by the consumer by lowering the

price of the product. The following promotions belong into this category:

- Price cut on shelf:

This is a very simple mechanism for the consumer, the retailer and the manufacturer. For the

consumer, the promotion is easy to understand and gives him a direct benefit. For the

retailer this mechanism is interesting because it does not lead to extra workload. Finally, the

manufacturer can very quickly organise such a promotion. However, the use of price cuts

also carries the risk that prices will remain at a low level for a too long period of time, leading

to a loss of income for the manufacturer. Furthermore, the image of the brand may be

damaged as consumers can start doubting the quality of the product when it is frequently

offered at a lower price. Finally, frequent price promotions can alter consumers’ price

expectations and make the normal price seem too high.

- Coupons:

Coupons exist in a lot of different forms. Some coupons have to be collected by the

consumers as they are printed in newspapers or folders. Other coupons are offered on-pack,

in-pack or near-pack. The advantage of couponing for the consumers is that they receive an

immediate discount. Moreover, couponing is interesting for the manufacturer because they

can easily target the campaign. However, couponing also has an important drawback.

Because it is difficult to predict the redemption rate, budgets are hard to estimate.


- Cash refunds:

Cash refunds require some extra effort from the consumers as they are expected to send a

proof of purchase to the manufacturer in order to receive a (partial) refund. This promotion

mechanism is mostly used for new product introductions.

- Product plus or extra volume promotions:

With this type of promotions an extra quantity is offered at the same price. Volume

promotions are mostly used to increase the purchase quantity of the regular buyers. There

are several advantages to these promotions. First and foremost, volume promotions are very

attractive to the consumers because they are easy to understand, offer an immediate

advantage and are unconditional. Second, this promo mechanism can be easily

communicated by the manufacturer and is easy to plan. The big disadvantage of volume

promotions is the high cost as new packaging is needed. Furthermore, the frequent use of

this type of promotions can have a negative effect on consumers’ price expectations.

- Savings card:

With a savings card consumers receive a discount when they have bought a number of units

of a brand during a specific period of time. This mechanism is mostly used by retailers. It is

interesting to them because it allows them to gain useful information on consumer

behaviour.

The second category of promotions is the contests, sweepstakes and lotteries. Contests differ

from sweepstakes and lotteries in that the participant has an influence on the outcome.

Lotteries and sweepstakes are in essence the same. The only difference between the two is

that for sweepstakes the winning numbers are determined in advance. When the prizes are

attractive, these promotion mechanisms can be successful. However, these promotions are

rarely capable of building brand or store loyalty and are therefore less interesting for both

the manufacturer and the retailer.

The last category of promotions is the product promotions. This means that the consumers

receive a free product. One reason to offer a product for free is to encourage people to buy

the product. Another reason is to reward consumers for their loyalty.


- Sampling:

When manufacturers use sampling they offer a smaller version of a product for free. The

sample can be distributed by mail, at events or be attached to another product of the same

brand. This promotion mechanism is perfectly suited to generate trial. The most important

drawback is the high cost.

- Free in-mail promotions:

With this type of promotions, consumers receive a gift after sending a proof of purchase to

the manufacturer. The goal of these promotions is to reward loyal consumers. Although,

these promotions provide the manufacturer with a lot of information about his consumers,

they also have important downsides: there is no benefit for the retailer, the costs for the

manufacturer are very high and the advantage for the consumer is not immediate.

- Premiums:

Premiums are free gifts that are added to a product. These gifts can be in the packaging, on

the packaging or near the packaging. Sometimes, the packaging itself is the premium, for

example, biscuits that are sold in a limited edition metal box.

Most of the times the premiums are related to the products. For example, glasses are

frequently used as a gift in the beverage category. However, sometimes the premium is

unrelated to the product category.

Premiums are usually very effective because consumers love getting things for free.

Moreover, the benefit to the consumer is obvious and easy to obtain. For the manufacturer,

giving premiums is interesting because they can easily control the budget as they determine

in advance how much premiums will be available. But, also premiums have some

disadvantages. When consumers are not interested in the gift, the whole campaign will fail.

Furthermore, giving the wrong premium can damage the brand image. Finally, premiums are

an expensive promotion type and are very challenging from a logistic point of view.

- Self-liquidators or self-liquidating premiums:

These are premiums that consumers can obtain in exchange for a number of proofs of

purchase and a small contribution. The advantage for the consumer is that this promotion

enables them to buy qualitative products for a minimum amount of money. However they

have to go through some trouble to receive the gift. The manufacturer benefits from this

type of promotion because he receives a lot of information about his consumers.

- Savings card:


Savings cards cannot only be used to give a monetary reward to consumers, as mentioned

above. They can also be used to offer a free gift.

The following table from De Pelsmacker (2007) gives a clear overview of the strengths and

weaknesses of the different types of promotions that manufacturers use.

1 2 3 4 5 6 7 8 9 10

Promotion Objectives

Generate trial + ++ ++ -- -- -- ++ -- ++ --

Induce repeat purchase + + ++ ++ -- -- ++ ++ ++

Basket-filling ++ + + ++ + -- +

(Dis)advantages

Direct consumer benefit ++ ++ -- ++ -- -- + -- ++ --

Ease of obtaining benefit ++ + -- ++ -- - ++ -- ++ --

Impact on brand image and brand loyalty -- - ++ - + +

Manufacturer’s workload and problems ++ + - - + -- - -- - --

Impact on consumer’s price perception -- - + - -- + +

Ease of targeting -- ++ ++ -- ++ + ++ - --

Ease of budget planning -- -- -- ++ - + ++ ++ ++ -

Database support -- -- ++ -- ++ ++ -- ++ -- ++

Immediate increase in sales ++ + ++ - +

Impact on store image and store loyalty - ++ -- +

Retailer’s workload ++ - + - - - -- -

++ very positive + positive - negative -- very negative

TABLE 2 OVERVIEW OF PROMOTION TYPES


3 IMPACT OF PROMOTIONS ON RETAILERS’ AND MANUFACTURERS’

SUCCESS

Seen the growing importance of sales promotions in the marketing communication mix and the huge

budgets allocated to them, it can be expected that promotions are an important source of profit for

both manufacturers and retailers.

Research has indeed shown that temporary price reductions have a positive effect on short-term

brand sales. (Blattenberg et al., 1995) However, the long-term effects of sales promotions have been

subject to much debate for a long time. Different researchers have found that short-term promotion

effects die out in the subsequent weeks or months. This period is referred to as the dust-settling. At

the end of the dust-settling there are few, if any, permanent benefits related to the promotion (Nijs

et al., 2001). These results hold important consequences for brand managers. First, because

promotions do not entail long-term gains, the only gain from sales promotions is obtained during the

dust settling. On the other hand, competitive actions also cannot have a long-term effect on the

performance of a brand.

Thus, sales promotions, which are designed to increase product sales, are only able to increase short-

term sales volumes. For the manufacturer, this increase can come from two sources. First, sales

promotions can increase primary demand. When sales promotions have a positive effect on primary

demand, the entire category benefits and as such also the promoted brand. A second source of sales

growth is brand switching. This means that the promotion is able to attract customers that normally

buy a competitive brand. For the manufacturer, promotions are profitable when the volume increase

is large enough to compensate for the margin loss on the baseline volume. (The baseline volume is

the volume that would be sold irrespective of the promotion.)

For retailers the situation is more complicated because retailers’ profit is related to all brands within

the category. Therefore, retailers will benefit from a primary demand increase but not necessarily

from brand switching. Brand switching is only profitable if people switch from a lower-margin

product to a higher-margin product. Furthermore, promotions can have an impact on store traffic

and store revenue. It is the combination of all these effects that in the end will determine the

profitability of a promotion for a retailer.

To exactly determine the impact of price promotions on the profitability of both the retailer and the

manufacturer, Srinivasan et al. (2004) conducted a large-scale econometric investigation. This

investigation confirmed the results of previous research about the absence of long-term implications

of price promotions. However, they did find that promotions generally generate incremental


manufacturer sales and revenue by the end of the dust-settling period. Furthermore, research results

showed that promotions also have a positive effect on the category sales at the retailer. But despite

this volume increase, price promotions do not substantially change retailers’ revenue. The

explanation of this discrepancy between volume and revenue effects is to be found in the price

setting. Prices tend to be below baseline prices for several weeks after the promotion. These low

prices have a positive effect on sales but evidently have a negative effect on revenue. Moreover,

price promotions have a negative impact on the margin retailers obtain. As mentioned above, these

negative results of promotions could be counterbalanced by increased store traffic and store

revenue. However Srinivasan et al. (2004) conclude that this is rarely the case.

The findings of Srinivasan et al. (2004) lead us to conclude that promotions are far more interesting

for the manufacturer than for the retailer. Consequently, manufacturers need to pay the retailers to

compensate them for the losses they suffer.

4 VOLUME INCREASE DUE TO CATEGORY DEMAND EFFECTS OR BRAND

SWITCHING?

Gupta (1988) distinguished three components of household response to sales promotions: category

purchase timing, brand choice and purchase quantity. Several studies have been conducted to

determine the importance of these three effects. On average, brand switching (brand choice),

accounts for the majority of the total brand sales elasticity (approximately 74%). The other 26% is

accounted for by primary demand effects, notably purchase acceleration and quantity increases.

(Van Heerde et al., 2003)

The previous findings have frequently been interpreted as follows. When brand sales increase by 100

units thanks to a promotion, 74 of these units are due to brand switching. This means that the other

brands within the category will lose 74 units. However, Van Heerde et al. (2003) have shown that this

interpretation is not correct because the decomposition of the sales elasticity cannot be directly

translated into units.

In order to have a correct estimate of the impact of promotions on sales volume of competing

brands, Van Heerde et al. (2003) have transformed the sales elasticity decomposition into a unit sales

decomposition. With this unit sales decomposition they came to the conclusion that brand switching

accounts for 33% of unit sales increase. Thus, when a brand gains 100 units because it is being

promoted, the competing brands will only loose 33 units instead of the 74 units predicted by Gupta.


Van Heerde et al. (2003) show that the interpretation of Gupta, which is the dominating

interpretation in the literature, is only correct if category volume is held constant when brand

switching is assessed. The interpretation of Van Heerde et al. (2003) takes into account that not only

the promoted brand but also competing brands can benefit from an increase in category demand.

Therefore the loss for competing brands, as predicted by Van Heerde et al. (2003), is considerably

less.

These results have important consequences from a managerial perspective. When promotions

primarily lead to brand switching, this will lead to increased competition amongst manufacturers. In

order not to lose sales volume, manufacturers will need to match competitive sales promotions.

However, when sales promotions primarily lead to an increase in category demand, competition

between manufacturers will be less fierce. Furthermore, as mentioned in the previous section,

retailers gain more from category expansion than from brand switching. Thus, also from a retailer’s

perspective the results found by Van Heerde et al. (2003) are very interesting. However, the previous

section has already shown that an increase in category sales does not necessarily lead to an increase

in revenue for the retailer.

5 DRIVERS OF CATEGORY DEMAND ELASTICITY

The previous section demonstrated that an important part of the sales volume increase of sales

promotions is related to an increase in category demand. Nijs et al. (2001) further investigated the

price-promotion elasticity of category demand and identified the main drivers.

The key driver of short-term price elasticity of category demand is the large positive effect of

promotional frequency. This means that frequent promotions lead to a large increase in price-

promotion effectiveness in the short run. This relationship can be explained by the consumer

behaviour. When a product category is frequently promoted, consumers will be more motivated to

search for promoted products and to only buy promoted products. However, in the long run this

effect is no longer observable.

Another key driver is advertising. Advertising affects price-promotion elasticity’s in the short-run as

well as the long-run. The effect of advertising is negative, i.e. the higher the advertising expenditures,

the less effective price promotions will be. The reason for this is that advertising focuses on nonprice

purchase motivations. Thus, advertising diverts the attention away from price to other product

features and makes consumers less price sensitive.


The third driver of price-promotion elasticity is the number of new product introduction in the

category. When there are a lot of product introductions in a category, category demand will be less

affected by price promotions.

Finally, the competitive structure has a negative effect on short-run promotional effectiveness.

6 ADVERTISING VERSUS SALES PROMOTIONS

Nijs et al. (2001) concluded that advertising has a negative effect on price-promotion elasticity

because advertising focuses on nonprice product attributes. Furthermore, because advertising

increases full-margin sales while sales promotions decrease unit margins, the two tools are direct

substitutes (Low and Mohr, 2000). Therefore, an important management decision is the budget

allocation to advertising and sales promotions. Low and Mohr (2000) investigated the product and

market factors that influence these budget decisions. In this section I will give an overview of their

findings.

The first factor that influences the budget allocation is the stage of the brand’s product life cycle.

Brand managers will spend more on advertising relative to sales promotions when brands are in the

introduction or growth stage than when the brand is already mature.

Second, budget allocations differ for single brands and family brands. Single brands have a unique

brand name, whereas family brands share a brand name with other product lines in the same

company. Advertising family brands provides economies of scale and scope because the cost is

spread over the entire product range. Therefore, the proportion of the budget allocated to

advertising will be smaller for family brands than for single brands.

Next, the relative price of a product is positively related to brand managers’ advertising allocations

relative to sales promotion allocations. There are two explanations for this relationship. First, higher-

priced products demand more advertising to build the brand image. By building the brand image the

manufacturer can justify the higher price. Second, the frequent use of price promotions may reduce

the consumers’ reference prices, a risky consequence for high-priced brands.

Fourth, the degree of retailer influence is negatively related to the advertising allocations relative to

sales promotion allocations. Because the margins of the retailers are very slim, they heavily rely on

the cash and discounts from sales promotions and slotting fees to improve their profits. (Kahn and

McAlister, 1997)

Fifth, a manager’s experience level with the company is positively related to advertising relative to

sales promotion budget allocations. The reason for this relationship is that it is more difficult to


assess advertising effectiveness. Therefore, less experienced managers will prefer to use sales

promotions because the effects are clearer.

Now that it is clear which factor influence the budget allocations of managers, it is time to examine

the results of these decisions. Low and Mohr (2000) found that high relative advertising and low

relative sales promotion budget allocations are associated with perceptions of higher consumer

attitudes, higher brand equity, higher market share and higher profit. These findings imply that it is

possible for firms to increase the company’s performance on these four variables by increasing their

advertising expenditures. Thus, the common belief that sales promotions are best suited to increase

market share is refuted. The reason for this unexpected result might be that consumers are tired of

sales promotions and therefore these have lost their effectiveness. Alternatively, the high company

spending on sales promotions possibly made consumers more price sensitive and less brand loyal

and thus the perceived benefits of the brands are overshadowed and the overall category sales are

reduced.

In conclusion, companies have to carefully consider their budget allocations to advertising and sales

promotions in order to make the most of their money. They have to take into account that the

frequent use of sales promotions can have detrimental effects on their effectiveness and that it

therefore might be better to shift their budgets from sales promotions to advertising.

7 WHY DO CONSUMERS RESPOND TO SALES PROMOTIONS?

Most studies assume that the only reasons why consumers respond to sales promotions are the

monetary savings. However, Chandon et al. (2000) argue that not all consumer behaviour can be

explained by these savings objectives. For example, why do consumers respond more to on-shelf

coupons than to advertised temporary price reductions that offer the same monetary incentive?

Why do consumers respond to insignificant price reductions and why do consumers switch brands

because of a coupon or a rebate but then not redeem it? In order to explain these seemingly

inconsistent consumer behaviours, Chandon et al. (2000) developed a multibenefit framework. This

framework identifies six benefits sales promotions can offer to consumers.

The first benefit of sales promotions for the consumers is the monetary savings they provide. This

benefit is very straightforward; consumers pay less for the same product and thus clearly benefit

from the promotion.


Second, sales promotions may make it possible for the consumers to buy higher quality products at a

lower price. In the end, consumers do not save money but they benefit from the increased quality.

Third, sales promotions increase the visibility of the brand at the point of sale. This leads to lower

search and decision costs for the consumer and by consequence increases consumer convenience.

Furthermore, sales promotions can enhance consumers’ self-perception of being smart or good

shoppers and provide an opportunity to reaffirm their personal values (the value expression benefit).

Next, because they constantly change, sales promotions can fulfil the consumers’ need for

exploration, variation and information (exploration benefit).

Finally, sales promotions can be a source of entertainment. Many sales promotions, such as

sweepstakes, contests and free gifts are intrinsically fun to watch and to participate in.

These six benefits can be categorised into two main categories: utilitarian benefits and hedonic

benefits. The utilitarian benefits are primarily instrumental, functional and cognitive. They provide

customer value by being a means to an end. Monetary savings, quality and convenience belong into

this category. The hedonic benefits are noninstrumental, experiential and affective. They are

appreciated for their own sake, without further regard to their practical purposes. The entertainment

benefit and the exploration benefit are part of this category. The value expression benefit has both

utilitarian and hedonic characteristics. On the one hand sales promotions can provide consumers

with the moral satisfaction of behaving according to their principles and values. This is a hedonic

benefit. On the other hand, sales promotions can increase the consumers’ prestige and social status.

This is a utilitarian benefit.

Chandon et al. (2000) conducted three measurement studies to examine if the framework they

proposed was correct. The studies showed that consumers indeed perceive all six benefits.

Moreover, consumers use the different benefits to evaluate promotions. The studies revealed that

utilitarian benefits are primarily used to evaluate monetary promotions and hedonic benefits are

used to evaluate nonmonetary promotions.

Because monetary and nonmonetary promotions offer different benefits to consumers, Chandon et

al. (2000) further investigated when manufacturers should use monetary promotions and when

nonmonetary promotions.

Based on different studies they came to the following conclusions:

- On average, sales promotions increase market share for high-equity brands but not for low-

equity brands.


- For low-equity brands, monetary and nonmonetary promotions are equally effective for

utilitarian as for hedonic products.

- For high-equity products, monetary promotions are significantly more effective for utilitarian

than for hedonic products. Non-monetary promotions, on the other hand, are more

effective for hedonic than for utilitarian products.

These results show that it is critical for managers to take into account the types of consumer

benefits provided by their promotions if they want to predict the promotion effectiveness of a

particular promotion. More specifically, monetary promotions are only effective for utilitarian

products and not for hedonic products. When managers want to increase market share for

hedonic products they can better use nonmonetary promotions.

8 CONCLUSION

The previous section showed that three types of sales promotions can be distinguished: monetary

promotions, product promotions and contest. All these sales promotions take up a huge part of

companies’ marketing communications budget. Therefore it is very important for companies to

closely monitor there effectiveness.

Furthermore, research has shown that sales promotion mainly affect short-term brand sales and that

manufacturers benefit more than retailers. By consequence, manufacturers have to recover the costs

of the sales promotion within the subsequent period and they will have to pay the retailers to

compensate for their revenue loss.

Third, the 33% of the sales unit increase from a promotion is due to brand switching, which is

significantly less than the frequently assumed 74%. This means that the majority of the sales increase

is due to an increase in category demand. This is good news for the manufacturers because this

lowers competition.

Fourth, the drivers of category demand elasticity, this is how category demand will react to sales

promotion, were identifies. The key drivers were promotional frequency, advertising, new product

introductions and the competitive structure.

Next, the variables that influence the sales promotions versus advertising budget allocations were

identified. The influential factors are the stage in the product life cycle, single versus family brands,

relative price, retailer influence and manager experience. Moreover, higher advertising expenditures

have a positive influence on consumer attitudes, brand equity, market share and profit.


Finally, six consumer benefits of sales promotions were identified. This lead to the conclusion that

monetary savings is not the only reason why consumers buy sales promotions. If companies want to

fully benefit from these consumer insights, they need to use sales promotions that are consistent

with their products.

CHAPTER 3: THE INTERNSHIP

36

CHAPTER 3: THE INTERNSHIP In this section I will give an overview of the tasks I carried out during my internship at Sara Lee.

During the four months I worked at Sara Lee, I performed a variety of tasks. In the first section of this

chapter I will give a detailed description of the promotion evaluation process. I choose to focus on

this task because I have been closely involved in this process. Furthermore, I will give a brief overview

of my other assignments.

1 PROMOTIONS AT SARA LEE

The research chapter revealed that all promotion mechanisms are based on one of the following

three incentives: monetary savings, product plus or some sort of contest or lottery. Sara Lee mostly

uses promotions based on a monetary incentive. More specifically, the majority of the promotions

are coupons and product plus promotions. Because the Sara Lee brands (Douwe Egberts, Jacqmotte

and Senseo) are high-equity brands, Chandon (2000) predicts that the sales promotions will be able

to increase the market share. Furthermore, Chandon (2000) states that promotions that offer a

monetary incentive will lead to the best results for utilitarian products. Because, coffee can be

characterised both as a utilitarian and a hedonic product, the impact of such monetary promotions is

not clear. However, when looking at the results of the promotions, it is obvious that consumers

respond very well to such monetary incentives.

The Sara Lee products are frequently promoted and, as mentioned in the research section, this can

be a risky strategy. When a brand is promoted to often, consumers will adjust their price

expectations and will wait for the promotions to buy the products. This is one of the reasons why it is

important to monitor the promotion effectiveness and to make sure that the period between

promotions is large enough. In the next section, I will present how the promotion evaluation process

is done at Sara Lee.

2 PROMOTION EVALUATION

In the theoretical section, I already stressed the importance of sales promotions in the budget of

manufacturers. Because of these huge budget allocations, it is extremely important for companies to

closely monitor the performance of their promotion activities in order to make the most of their

money. Therefore, the Trade Marketing team of Sara Lee monthly evaluates the promotions of the


37

previous period. These promotion evaluations are very important because they can reveal ineffective

promotions and make it possible to take the necessary measures. For example, if a certain type of

promotion has not been able to reach the objectives several times, the company can decide to no

longer use this type of promotion. It is the task of the Trade Marketing team to give

recommendations to improve the company’s promotions activities.

During the last four months, I have been responsible for part of the preparation of the promotion

evaluation. The first month, my input was rather limited because, as a new-comer, I did not possess

all the necessary background information. However, the following months my input steadily

increased and although I still need some assistance to make a thorough evaluation, I am able to

create a good starting document.

In the rest of this section I will guide you through a promotion evaluation process and explain the

necessary steps to get to a good evaluation. In Annex you can find an example of how a finished

promotion evaluation looks like. It is the evaluation of a duopack with a coupon of 0,50 euro on

Douwe Egberts 250g. All figures in this evaluation have been altered for reasons of confidentiality.

For the same reason, all comments have been deleted. However, the promotion evaluation in the

annex, gives a good view of how the evaluation process works.

2.1 DATA COLLECTION

The first step in the promotion evaluation process is the data collection. Evidently, the first thing you

need to know is which promotions need to be evaluated. Therefore, you have to take a look at the

national promotion plan of SL C&T. On this plan all national actions are mentioned as well as the

period during which the promotion takes place.

When you have determined which promotions will be evaluated, you have to look at the promotion

plan of each customer. The promotion evaluation is done for the top 5 customers, being Colruyt,

Delhaize, AD Delhaize, Carrefour hyper and GB. It is possible that the national promotion has been

translated in another promotion at a certain retailer. For example, the promotion evaluation in

annex shows the results of a duopack with a bon on pack of 0,50 euro. But GB played a translation of

the national action. At GB, consumers got one Disney pin when they bought 3 packs of Douwe

Egberts.

Once you know which promotion was played at each retailer, the next step is to check how the

promotion was executed. On the promotion plan of the different retailers, you can find if the

promotion appeared in the folder, if there was a display or a floor stand. Because promotion visibility

is one of the drivers of promotion effectiveness, it is important to check what the folder looked like


38

and how the promotion was executed in-store. All store folders are scanned and available on the

internal network of Sara Lee, also photos of the in-store execution are available on the network. The

pictures of the folder and in-store execution are added to the first slides of the promotion evaluation

presentation in order to sketch the context for the audience.

The next step is to look up the necessary figures. At the moment, Sara Lee uses three key figures to

assess the effectiveness of a promotion: selling in, incremental volume, promotion effectiveness and

break-even promotion effectiveness.

- Selling in:

The first figure is the selling in, also referred to as contingent. The selling in of a promotion is

the promotional volume delivered to the retailer. For example, for a duopack of Douwe

Egberts 250g, there might be a selling in of 350 tons. The selling has to be calculated in Excel

and is based on database information. However, this calculation is not possible when the

promotion is played with standard product, for example, the Disney pins action at GB. As

mentioned before, consumers get one Disney pin when they buy three packs of Douwe

Egberts. These packs are standard products, there is no indication of the promotion on them.

For this type of promotion, the evaluation is based on the actual number of units sold on

promotion. The only way to determine this exact amount is to use the invoice the retailer has

sent. However, most of the times the invoice does not arrive at Sara Lee until months later

and thus the selling in is based on the estimate of the key account manager.

- Incremental volume:

The second important figure is the incremental volume. The incremental volume is the extra

volume sold thanks to the promotion. The incremental volume is calculated as the difference

between the volume sold in a particular period and the baseline volume. The baseline

volume is the volume that would be sold anyway, irrespective of the circumstances. The

incremental volume can be found using the promo evaluation tool. This tool is based on the

sales figures provided by Nielsen and contains formulas that calculate the baseline.

For the promotion evaluation the incremental volume obtained in the first three weeks of

the promotion is used.

- Promotion effectiveness:

The promotion effectiveness that Sara Lee uses in the promotion evaluation process is

defined as the quotient of the incremental volume divided by the selling in. By consequence,

there are two factors that influence the promotion effectiveness, but only one of them can

be controlled by the company. The company can increase the effectiveness of a promotion

by carefully planning the selling in. This is certainly not an easy task. If the selling in is too


39

low, the promotion will not be able to boost the volume and if the selling in is too high, the

promotion will not be effective and the promotion will be left in the store for too long which

has a negative impact on the profit.

The other influential factor, the incremental volume, cannot directly be affected by the

company.

- Break even promotion effectiveness:

The last figure is the break even promotion effectiveness. This is the minimum effectiveness

the promotion must have in order to gain the same profit as with regular products. The break

even promotion effectiveness takes into account all costs that are directly related to the

promotion, such as the production costs and the cost of the displays. The break even is

calculated by the finance department and has to be requested via mail.

When all these figures have been collected it is time for the next step in the promotion evaluation

process: creating the template.

2.2 THE TEMPLATE

The promotion evaluation presentation always uses the same template, as can be seen in annex. The

structure of the presentation is as follows. First the national performance of the promotion is

evaluated. Afterwards the performance at the top 5 customers is evaluated.

The presentation template primarily consists of graphs. These graphs are part of the promotion

evaluation tool (the same tool that is used to search the incremental volume). There are graphs

available on company level, brand level and product level and this for all markets. The different

markets that are available in the tool are Belgium, Open Market (this Belgium without the hard

discounters), Hard Discount, F1 (this are the largest supermarkets), F2 (this are the medium-sized

supermarkets), F3 (all stores with a surface of less than 400 m²), and all different retailers in Belgium.

As can be seen in annex, the bars in the graphs represent the weekly sales volume. The bars consist

of two colours: the purple part of the bars represents the regular volume and the green part

represents the promotional volume. Furthermore the graphs contain several lines. The blue line

shows the baseline volume. By consequence, when the bars exceed this line, the company gained

incremental sales. The red lines represent the market share and the baseline market share.

The next step of the promotion evaluation process is to paste all necessary graphs in the

presentation. On the graphs, the promotions are clearly visible by the peaks. In order to make it easy

to compare the performance of different promotions, all promotions names are added above the

peaks. Because it would be very time-consuming to search for all previous promotions, it is easier to


40

open one of the previous presentations and copy the information. Then all figures, which were

collected in the previous step, are added to the graphs.

2.3 ANALYSIS

Now that all the necessary information has been collected, it is time to start the real work, the

analysis.

First, the performance of the promotion is evaluated on Open Market level. To get a first idea of the

performance of the promotion, the peak is compared to the peak of similar actions. For example, the

peak of the duo pack is compared to the peak of previous duo packs. Next, the incremental volumes

are compared to make a more accurate comparison possible. When the performance is under

expectations, the reason for this underperformance has to be determined. This reason can be the

underperformance of one specific retailer, the competitive environment, price positioning, in-store

execution… All these possibilities have to be checked. The last step is to check the cannibalization

between brands or formats. For example, if Douw Egbert’s 250g is being promoted, this might have a

negative effect on the sales volume of Douw Egbert’s 500g. If this is the case, this means that people

that normally buy packs of 500g switch to packs of 250g because they are attracted by the

promotion. Obviously, if a huge part of the volume increase is due to brand switching, the promotion

will not lead to an increase in profit for Sara Lee even though the promotion effectiveness, as defined

in the previous section, might be very good.

In the second step, the same analysis is made for the top 5 retailers. Again the different factors that

can influence the promotion performance have to be checked. For example, if the performance of

the promotion is under expectations at Delhaize, the first thing that has to be checked is the folder

visibility. If the promotion was not visible this might explain the disappointing results. The second

possible explanation is a private label action. As mentioned in the first chapter, private label is the

most important competitor and therefore a promotion on these products will have a major influence

on the results of Sara Lee. Of course, also other competitive actions can have an influence. Another

possible explanation is the price positioning. Therefore, you can check with the Nielsen figures if the

pricing has changed in the last month. The last possible reason for the disappointing results is the in-

store execution. This can be checked by means of the pictures the sales representatives have taken in

the store at the time of the promotion. In-store execution is especially important for promotion that

use standard product, for example promotions that give extra bonus points.


41

2.4 CONCLUSION AND RECOMMENDATION

When all necessary analyses have been performed, all Trade Marketers have a meeting to discuss the

results. Based on the performance of the promotion on both national and retailer level, they jointly

decide if the promotion was able to reach the goals. Moreover, if the promotion has failed to deliver

results, they assess if this was linked to the characteristics of the promotion or if external factors

were the cause. Then based on their findings, they give a recommendation about the promotion.

There are three possible recommendations. First, if the promotion performed well and delivered the

expected result, the recommendation will be to certainly repeat the action. Second, if the promotion

had an average performance and there are no fundamental problems with the promotion, the

recommendation might be to repeat the action but change some details. For example, the

recommendation can be to repeat the action but only if the promotion is played with displays. Third,

if the promotion performed really badly, the recommendation will be to never use this type of

promotion again. Of course, when the recommendation is to remove a promotion from the

promotion plan, it has to be replaced with another action. It is also part of the promotion evaluation

process to suggest a promotion type that will lead to a better performance.

2.5 EVALUATION OF THE PROMOTION EVALUATION PROCESS

The promotion evaluation process as described above is very time-consuming. Especially the data-

collection phase and the making of the presentation template take up a lot of time. Moreover, it is

not only the preparation that is time-consuming, also the presentation itself takes a lot of time.

When you know that every month, on average, 4 promotion evaluations have to be prepared, it is

clear that there is room for improvement.

The Trade Marketers at Sara Lee have realised that the quality of the promotion evaluation has

already increased tremendously in the past years, but that there are still possibilities to improve.

Therefore, one objective in fiscal year 2011 is the re-invention of the promotion evaluation process.

The kick-off of this process was a brainstorming session with the Trade Marketing team and one

colleague from the Continuous Improvement department. In this session, we thought about what the

promotion evaluation would look like in the ideal world. At the end of the session, we had written

down a long list of possible improvements. Examples of the suggestions were: improving the

cooperation with the finance department in order to get the break even more quickly, incorporate

the objectives of the promotion in the evaluation process and add complexity as an extra criterion to

assess promotion performance. This last suggestion is very important because, despite the huge


42

impact of promotion on the supply chain side of the business, no supply chain data are used at the

moment.

Then a next session was planned with the Trade Marketing team, colleagues for Continuous

Improvement, Supply Chain and Finance. The first objective of this meeting was to map the current

promotion evaluation process. The second objective was to agree on the next steps: what should the

promotion evaluation process look like in the future, how can we get from to current process to the

desired state,…

Because the second meeting came to an end before everything was clarified, a third meeting was

planned. The objective of this third meeting is to agree on how we can gradually improve the

promotion evaluation.

I am convinced that the thorough approach of re-invention process will yield good results and that

this will lead to an improvement of the quality of the promotion evaluation in the future.

3 OTHER ASSIGNMENTS

3.1 UPDATING OF REPORTS

Every month, Nielsen provides the company with new sales figures. These figures are used in all kinds

of reports that are used by the Sales department. Therefore, every time new Nielsen figures are

available all sales reports need to be updated. During my internship, I was responsible for updating

these reports. These reports are a valuable source of information for the Sales department because

they allow making an evaluation of the sales results.

Moreover, also the internal delivery data are available at the end of each month. Whereas the

Nielsen data show how much has been sold to the consumers, these delivery data show how much

has been delivered to the different retailers. Again, I was responsible for the updating of the

different reports that are based on these data.

The updating of the reports is a very time-consuming activity because the documents contain so

much information that they push Excel to its limits. Furthermore, it is very important that all figures

are correct as these are used for all kinds of analyses. Therefore, the controlling of the data also

consumes a lot of time.


43

3.2 SALES ANALYSIS

I have made several sales analyses. These analyses were used both internally and for business

meetings with clients. I will give a short overview of some analyses I made, however for reasons of

confidentiality I cannot disclose any details about the outcome.

- Taste analysis:

This analysis was made to check whether there were differences between the taste

distribution (Dessert, Moka, Decaffeinate) between products. For example, is the weight of

Dessert the same for Douwe Egberts pads as for Senseo? Furthermore, the differences

between regions were analysed to get a better view on the regional taste preferences.

- Delhaize analysis:

Since July 2010, Nielsen also provides sales data for AD Delhaize. Before, only data for

Delhaize supermarkets was available and Sara Lee estimated the results of AD based on the

Delhaize data. The objective of this analysis was to control if this estimation was accurate.

- Price analyses:

The objective of these analyses was to check the volume impact of price adjustments. These

analyses make it possible to assess the profitability of a price change.

3.3 CUSTOMER MANAGEMENT HOMEPAGE

In order to improve the accessibility of all available reports (see 3.1), Sara Lee developed the

Customer Management Homepage. This Homepage is a, visually attractive, Excel file that contains

links to all reports. In this way, employees do not longer have to search on the network to find the

file they want; they can easily access it via the Homepage. Part of my job responsibilities was to

install the Customer Management Homepage on the computers of all Marketing and Sales

employees. Furthermore, I made a card that was given, together with a pen, to all users to celebrate

the official launch of the Customer Management Homepage.

3.4 OTHER

The previous overview of my assignments, evidently, is not exhaustive. In the four months that I have

been working at Sara Lee, I have assisted the Trade Marketing team, wherever possible, with their

tasks.

CHAPTER 4: CONCLUSION

44


INTRODUCTION

In this chapter, I will briefly discuss the key learning points I gained from the internship on both a

professional and personal level. Moreover, I will give some feedback about the MTB program.

1 KEY LEARNING POINTS

It has always been my ambition to work at the marketing department of an international consumer

goods firm. During my studies of Commercial Engineering, these multinational firms were presented

as the best companies to learn the job. Therefore I wanted to do my internship in such an

environment in order to find out if this was what I wanted to do.

Although I did not work at the marketing department, the internship gave me very valuable insights

into the functioning of both the marketing and sales department in a multinational company. This

experience made it clear for me that this was exactly what I want to do as a job. I especially like the

fact that you see the results of your work in everyday life. For example, when you go to the

supermarket, you can see how the promotions are executed and if the recommendation you gave

have been put into practice successfully.

Furthermore, the internship has showed me that I like to have some variation in my job

responsibilities. I liked all the different tasks I performed, but I found it easier to perform these tasks

when I could alternate them.

Moreover, I prefer the combination of individual and group assignments. When working individually,

you can determine your own pace and get on with the job. When working in a team, on the other

hand, you depend on the other team members and this might slow things down a bit. However,

working as a team also has important advantages. First, when you work in a team, you can see things

from a different perspective and in this way you can quickly extend your knowledge. Furthermore,

the different perspectives and the team discussions are definitely beneficial for the quality of the

results. Finally, when you take part in a team assignment, you really feel part of the company.

The internship has also confirmed the results of the personality test we did in the MTB program: I am

an analytical person. The results of the personality test did not come as a surprise to me. I have

always liked working with numbers and objective information. Therefore the internship at the Trade


45

Marketing department was perfectly in line with my personality and by consequence I really enjoyed

working there.

Finally, the internship also revealed some of my weaknesses, qualities that I further need to improve

on. The most important one is my insecurity. I tend to underestimate my skills and knowledge and

because of this I am sometimes afraid to speak up and share my opinion. I realise that I need to work

on this because otherwise this insecurity will hold me back from achieving my goals. Of course it will

take some more time to become a truly confident and assertive person, but I certainly intend to get

there.

Another quality I need to improve on is asking for feedback. I find it difficult to judge my

performance and to assess if my superiors are satisfied with it. During my internship I did not always

get feedback on my tasks and did not ask for it because I was afraid it would be negative. In

hindsight, there was no reason to be afraid of the feedback as everyone was pleased with the work I

did. Therefore, I hope that in the future I will be confident enough to ask for feedback if I want to

know how I am doing.

2 FEEDBACK ON MTB PROGRAM

I decided to study MTB because I felt like missing some practical experience to enter the job market.

Furthermore, MTB was an excellent opportunity to improve my language skills. At the end of this

year, MTB has definitely met my expectations and prepared me to enter the job market.

But the internship and the language courses are not the only aspects of MTB that have proved to be

valuable, the different projects were also very interesting. The projects gave me the opportunity to

gain experience with working in diversified teams. This will definitely be helpful in a working

environment. Furthermore, thanks to the projects and the guest lectures, I now have a good idea of

what the communications world looks like. Again, I am certain that this will come in handy in the

future.

Finally, I have one suggestion to further improve the MTB programme. I think it would have been

very helpful if we had gotten some interim feedback on the projects. Now, we have only received

feedback when the projects were finished and we did not have the opportunity to do something with

this feedback. Therefore, I think it would improve the results of the projects when there would be a

feedback moment before the end of the projects, so that the students can incorporate this feedback

into the final presentations.


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3 CONCLUSION

In conclusion, I would like to say that both MTB and the internship were exactly what I expected. In

the past year, I learned a lot, academically as well as personally. Therefore, I am very glad that I had

the opportunity to study MTB and do an internship at Sara Lee and I would recommend this to

everyone.

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BIBLIOGRAPHY

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Consuming It Faster. Journal of Marketing Research , Vol. XXXV, 390-398.

Blattberg, R. C., Briesch, R., & Fox, E. J. (1995). How promotions work. Marketing Science , Vol.14,

No.3, 122-132.

Chandon, P., Wansink, B., & Laurent, G. (2000). A Benefit Congruency Framework of Sales Promotion

Effectiveness. The Journal of Marketing , Vol. 64, No. 4, 65-81.

De Pelsmacker, P., Geuens, M., & Van den Bergh, J. (2007). Marketing Communications: A European

Perspective. Pearson Education Limited, Third edition.

Laroche, M., Pons, F., Zgolli, N., Cervellon, M.-C., & Kim, C. (2003). A model of consumer response to

two retail sales promotion techniques. Journal of Business Research , Vol.56, 513-522.

Low, G. S., & Mohr, J. J. (2000). Advertising vs sales promotion: a brand management perspective.

Journal of Product & Brand Management , Vol.9, No.6, 389-414.

Nijs, V. R., Dekimpe, M. G., Steenkamp, J.-B. E., & Hanssens, D. M. (2001). The Category-Demand

Effects of Price Promotions. Marketing Science , Vol.20, No.1, 1-22.

Srinivasan, S., Pauwels, K., Hanssens, D. M., & Dekimpe, M. G. (2004). Do Promotions Benefit

Manufacturers, Retailers or Both? Marketing Science , Vol.50, No.5, 617-629.

Van Heerde, H. J., Gupta, S., & Wittink, D. R. (2003). Is 75% of the Sales Promotion Bump due to

Brand Switching? No only 33% is. Journal of Marketing Research , Vol.XL, 481-491.

http://www.beursduivel.be, last consulted on August 25, 2010

http://www.saralee.com, last consulted on August 28, 2010

http://www.douwe-egberts.be, last consulted on August 25, 2010

http://www.jacqmotte.be, last consulted on August 21, 2010

http://www.businessweek.com, last consulted on August 26, 2010

http://www.ten-brink.nl, last consulted on August 26, 2010

http://www.beursduivel.be/

http://www.saralee.com/

http://www.douwe-egberts.be/

http://www.jacqmotte.be/

http://www.businessweek.com/

http://www.ten-brink.nl/

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http://www.retailactueel.com/941006/drie-supermarktketens-strijden-om-marktleiderschap-belgië),

last consulted on August 21, 2010

http://www.colruyt.be, last consulted on August 21, 2010

http://www.delhaizegroup.com, last consulted on August 21, 2010

http://www.carrefour.eu, last consulted on August 21, 2010

http://www.marketingonline.nl/nieuws/bericht/economische-recessie-geen-voorwaarde-groei-

winkelmerken/, last consulted on August 21, 2010

http://www.nl.wikipedia.org/wiki/huismerk, last consulted on August 21, 2010

http://be.nl.acnielsen.com/site/documents/Nielsenvoedingsuniversum2009.pdf, last consulted on

August 21, 2010

http://www.rombouts.com, last consulted on 21, 2010

http://www.dolce-gusto.be, last consulted on August 21, 2010

(http://www.trademarketingassociation.nl/index/read/pagesID/105/criteria/definitie), last consulted

on August 22, 2010

http://www.retailactueel.com/941006/drie-supermarktketens-strijden-om-marktleiderschap-belgië

http://www.colruyt.be/

http://www.delhaizegroup.com/

http://www.carrefour.eu/



http://www.nl.wikipedia.org/wiki/huismerk

http://be.nl.acnielsen.com/site/documents/Nielsenvoedingsuniversum2009.pdf

http://www.rombouts.com/

http://www.dolce-gusto.be/

(http:/www.trademarketingassociation.nl/index/read/pagesID/105/criteria/definitie

ANNEX

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ANNEX

EXAMPLE OF A PROMOTION EVALUATION

This presentation is added in order to give the reader an idea of what a promotion evaluation looks

like. However, all figures in this promotion evaluation have been altered for reasons of

confidentiality.

ANNEX

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