Price Promotions – the Problematic Child of Marketing

Abstract

Price promotions account for more than half of companies’ marketing budgets, and in many countries, sales from promotions are reaching unsustainable levels despite these promotions’ unsatisfactory results. This paper presents the findings from a single case study on price promotion decision-making at a large consumer packaged goods (CPG) company in Bulgaria. The findings suggest that price promotion decisions made by the company are largely inertial and based on very limited information, promotions are used to maintain leadership in terms of volume market share, and there is a lack of alignment between marketing and financial goals. Combined information on advertising and sales changes following price promotions in nine product categories was employed as additional empirical material.