The effect of in-store promotional activities on brand and sales

Abstract

The thesis titled "The Effect of In-Store Promotional Activities on Brand and Sales" addresses the gap between academic research and practical application of in-store marketing within the retail industry. The primary goal is to investigate the causal relationships between various in-store promotional activities and their impact on both brand equity and sales performance. Methodologically, the research employs a dual approach: a comprehensive literature review and empirical case studies conducted within the Bosnian retail market. The literature review synthesizes existing academic studies and industry reports, providing a foundation that extends beyond conventional focuses on displays and in-store demonstrations. Special emphasis is placed on diverse promotional tools such as point-of-sale materials (POSM), new product introductions, limited-edition offerings, and prize-based activities. This approach aims to uncover insights that integrate theoretical frameworks with practical applications. Empirically, the study analyses anonymized sell-out data from two retailers and brands, comparing periods with and without specific promotional activities to establish causal links between these strategies and predefined goals. By examining real-world scenarios, the thesis explores how various combinations of promotional tactics influence sales metrics and brand perceptions. Notably, the research challenges the predominant emphasis on price-based promotions by demonstrating the significant impact of integrated strategies like shelf expansions and secondary positioning on sales growth. Key conclusions from the study underscore the effectiveness of strategic in-store activities in enhancing both brand equity and sales performance. For instance, findings reveal that secondary positioning plays a pivotal role in driving sales, particularly during new product launches or brand expansions. Additionally, insights from product delisting and assortment changes highlight their positive effects on brand loyalty and market share, emphasizing the interconnectedness between promotional activities and long-term brand health. Furthermore, the research explores the synergies between in-store and out-of-store promotional efforts, illustrating how effective in-store placements can amplify the impact of subsequent out-of-home advertising campaigns. In summary, this thesis contributes to advancing understanding in in-store marketing by providing actionable insights that bridge academic theory with practical implementation. By highlighting the diverse impacts of promotional activities on sales and brand equity, it offers strategic recommendations for retailers aiming to optimize their promotional strategies in an omnichannel retail environment.