Retail Marketing and Promotion
Retail Marketing and Promotion tests how retailers attract and retain customers and how promotions are planned and measured. Expect questions on the marketing mix, target segments, promotional tools, and the difference between sales revenue and profit.
Core concepts
- The marketing mix is product, price, place, and promotion; in retail, people and process also affect the experience.
- Segment by need, budget, age, location, or buying occasion, then choose a promotion that fits the segment.
- Common tools: price discount, bundle, buy-one-get-one, coupon, loyalty points, sampling, and in-store event.
- A promotion should have a clear objective: trial, basket size, clearance, or repeat purchase.
- Measure incremental gross profit, not just sales.
Worked example
An item sells normally at ₹500, costs ₹300, and sells 100 units. Normal contribution = (500 − 300) × 100 = ₹20,000. During a 10% discount, price is ₹450, contribution per unit is ₹150, and sales rise to 150 units: contribution = ₹150 × 150 = ₹22,500. Incremental contribution is ₹2,500. If signage and extra staff cost ₹500, net promotional gain is ₹2,000. The discount is worthwhile here, but it would not be if the extra volume were too small.
Marks traps
Do not compare discounted revenue with normal profit. Do not assume higher sales always mean higher profit. Do not propose a promotion that breaks law or store policy, such as a fake “before” price. Do not ignore the cost of the promotion itself.