Determining Promotional Effectiveness in Small Retail Firms: An Empirical Investigation

Abstract

This exploratory study examines how promotional effectiveness is determined in small firms and examines decision‐makers attitudes toward promotional performance and measurement. Although it is commonly believed that small business managers rely upon intuitive methods, this study suggests that most small business managers apply some objective measure of effectiveness to their promotional strategies, typically using multiple methods. Evaluation techniques usually center on measures of financial performance and consumer behavior, with some firms relying on employee input for the assessment of promotional performance. The size of the firm and the gender of the decision‐maker account for significant differences in the frequency and type of evaluation methods applied. The majority of small business managers are somewhat satisfied with how well their promotional efforts perform, however, many experience difficulty in determining the impact of their promotions and could benefit from the development of models and techniques designed specifically for use in small firms.