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Promotion Management Solution — Transforming the Promotion Process

Promotion Management Solution

Promotions play a pivotal role in the success of a product. When promotion management is done strategically, retailers can expect a positive demand shift.


According to retailmenot, promotions trigger in-store and online purchases by 89-91%


Throughout this article, learn more about:

Table of Contents

What are promotions?

A promotion is a specific tactic within the marketing mix used by retailers and wholesalers to drive sales. This tactic incentivizes shoppers to purchase a product either because of the lower price, or because they receive more value from the sale. 


Promotion is the fourth element of the Marketing Mix (Product, Price, Place, Promotion) and arguably the most important as it creates awareness, persuades the customer to purchase a product, and drives demand. According to Your Article Library, “Promotions are the spark plug of the marketing mix. No business enterprise can sell its goods and services without informing the people about the availability of products and without creating in them the desire to buy them.”


Throughout this article, we will focus specifically on sales promotions– a strategy where a business uses a campaign or offer to increase interest in a product or service. The main objective of a sales promotion is to boost sales.

Promotion Methods

Before deciding on the type of promotion, it is critical for retailers to know what audience they are aiming to reach.

1- Mass Promotions

Mass promotions focus on marketing a product or service to a retailer’s entire customer base. It is not niche-exclusive. 


Mass promotions aim to raise brand awareness and extend advertising reach. 

2- Targeted Promotions

Targeted promotion identifies specific customers and promotes products through various promotion types and intensities. 


There are two perspectives from which retailers can approach targeted promotions:


  • Product Centric –   retailers know the product they want to promote and aim to find the best group of customers to advertise to. Such strategies are often employed in a vendor subsidized campaign or to shift customers towards more lucrative products.

  • Customer Centric –  identifies the group of customers the retailer wants to target and then seeks to find the product that best accommodates the interest of the target group. Retailers often use this strategy to attract new customers or to establish loyal relationships with infrequent customers. 

Types of Promotions

Whether the goal is to reach a mass or targeted audience, there are two types of promotions:

1- Simple Promotions

Simple promotions refer to single-item markdowns or discounts. This type of promotion is often preferred as customers respond to simplicity. 


Examples of simple promotions: 


  • Percentage discount 
  • Amount off
  • Fixed Price 
  • EDLP (Everyday low price)

2- Complex Promotions

Complex promotions involve multi-item buy-get or spend-get strategies. 


Examples of complex promotions: 


  • Bundle 
  • Conditional (loyalty)
  • Rebate
  • Meal Deals
  • BOGOs

What is Promotion Management?

Promotion Management is a strategic method intended to optimize the promotion process. It encompasses defining the promotional objective, setting a budget, engaging and collaborating with various vendors and business units, planning and running campaigns, and monitoring results. 

The purpose of promotion management is to ensure that the promotions align with the business objectives.

Top 6 Promotion Management Challenges

Though promotion management is supposed to improve the promotion process, many retailers find it challenging to coordinate from start to finish due to the following reasons: 

  1. Inadequate data & insights
  2. Broken Processes
  3. Ineffective Collaboration 
  4. Inaccurate promotional forecasts
  5. No ML/AI in promotion calculations
  6. Lack of targeting & personalization

1- Inadequate data & insights

  • Plans are made based on past decisions, however, results were measured without understanding ROI.
  • Promotional data is held across many systems and stored in complex structures without easy access 
  • Lack of understanding of promotional lift due to not having access to historical performance

2- Broken Processes

  • Multiple, outdated legacy systems that do not communicate with each other– causing confusion amongst various departments 
  • Inability to compare merchants/category managers and optimize promotional funding across the different departments 

3- Ineffective Collaboration

  • Inability to collaborate across departments – Spreadsheets are typically managed in different ways, making it difficult for leadership to compare promotions across categories.
  • The lack of pooled results from different departments results in retailers relying on the same budget and promotions each year. 
  • Difficult to collaborate with vendors on promotion funding.

4- Inaccurate promotional forecasts

  • Inability to predict the promotional impact 
  • Current forecasts don’t take into account internal and external factors
  • Inaccurate forecasting results in a major challenge to optimize promotion attributes for the desired KPIs.

5- No ML/AI in promotion calculations

  • Lack of Automation & integration negatively impacts sales cycle duration, productivity, and accuracy. 

Fun Fact: Grocery stores with ~100 locations are faced with over 325 million decisions for mass promotions and 1.25 trillion decisions for targeted promotions. Without advanced technology, it is impossible for a retailer to ensure they make the most effective decision. 

6- Lack of targeting & personalization

  • Retailers are unable to mine promotion and price sensitivity insights from their data, making it difficult to identify effective consumers to target and products to promote.
  • Struggle to optimize targeted and personalized promotions, which impacts brand loyalty

The Impact of a Promotion Management Solution

An integrated promotion management solution ensures retailers that their promotion process will align with their business objectives, and provide the greatest value. 


Rather than relying on manual work and broken processes, a promotion management solution brings everything into one place– making it easy to analyze, plan, forecast, and optimize promotions. 


Retailers can expect to see an improvement in:

  1. Processes 
    1. Automated single process 
  2. Collaboration
    1. Effective collaboration across departments
  3. Results
    1. Sales Increase 
    2. Margin Increase 
    3. Inventory & Waste Reduction
    4. Reduction in labor 
  4. Policy 
    1. Standardized process with built in business rules and approvals.s 
  5. Technology 
    1. Scalable, faster software that adapts to changing technology

Capabilities of a Promotion Management Solution


  • Plan, optimize, and analyze all types of promotions (simple and complex) all in one place
  • Disparate Promotion Planning processes will be aligned to one future state process
  • A simple and efficient infrastructure that automates and supports processes

Targeting & Versioning

  • Target customers with relevant offers that maximize redemption.
  • Shape demand by amplifying promotions.


  • Analyze performance and sensitivity while planning 
  • Evaluate achievement of objectives.
  • Inform strategies that relate to retailers’ metrics and KPIs
  • A complete view of promotion ROI and performance from company to item level.

Planning & Collaborating

  • Collaborate across merchandising, marketing, and vendor partners.
  • Category objectiveswill be more closely integrated into marketing plans (Campaigns & Events) 
  • System enables Merchants and Marketing team members to more closely collaborate and together assess the effectiveness of planned promotions and events
  • Leadership (both Merchant and Marketing) can easily assess the planned and actual performance of promotions and events
  • Collaborate with vendors on promotion funding and Take ownership of vendor negotiations with ROI predictions and past performance.


  • Review recommendations, assess trade-offs, and compare scenarios
  • Maximize promotion objectives that support desired KPIs
  • More accurate forecasts to inform better buying decisions
  • Easily accessible and consumable data enables more informed decision-making by users
  • Target customers with relevant offers that maximize redemption.
  • Shape demand by amplifying promotions.


  • Accurately predict promotion lift 
  • Visibility of  promotion forecasts across all departments 
  • Linking supply chain and merchandising 
  • Lower out of stocks and reduced wastage

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