Promotional campaigns need strong supply chain support to succeed

Companies are constantly looking for innovative ways of achieving a wholly integrated supply chain.

The relationship between logistical planning and promotional campaigns is no exception to this. Often implemented as a key marketing strategy, promotions have proved particularly successful in helping companies attract new customers, retain existing clients, try out new product concepts, and respond to the ever-changing demands of the consumer. While speciality products and exclusive offers have the potential to build brand revenue, their implementation is not always straightforward. The key is for companies to adopt a holistic approach to promotions, allowing key supply chain management requirements such as fulfilment and distribution to play a vital role in a successful promotional campaign.

If a company’s promotional supply chain is not up to scratch it can face several potential risks. Stock outages are likely to result in consumer dissatisfaction and loss of potential sales, or a delay could lead to legal risks and impact agreements with licensors. These are just some of the examples that demonstrate even the best promotional concepts can only be successful with strong supply chain support.

To achieve success throughout the cycle of a promotion, a close and collaborative relationship between the marketing team and logistics professionals is crucial. Without this, companies run the danger of allowing unknown variables to impact negatively on revenue. Information on availability, in addition to potential challenges and pitfalls for the promotion must be communicated to marketers. This is only possible if logistics planners are included within the planning phase.

When projections are made on the bottom line impact of a promotion, it is too often the case that logistical costs are a mere afterthought. Particularly given today’s unstable supply chain landscape where goods are transported across multiple geographies, logistical planning has never been more crucial. New locations may require new distribution partners, new quality assurance, and in some cases, new customs management. The earlier logistics teams are brought into planning discussions, the sooner the promotion can go from concept to reality.

Moreover, the execution of promotions is equally as important as the planning. Logistics teams need to coordinate delivery of products with distribution partners to ensure items arrive as promised. The best logistical teams often go one step further. To ensure they have the capabilities to handle anticipated volumes, suppliers and logistics partners must have visibility into supply chain data. Only through this approach can organisations guarantee they have the capabilities to meet promotional needs.

Finally, companies must be prepared to react to a variety of scenarios that may occur as the promotion evolves. For example, a promotion may experience high levels of success in certain geographies, and lower levels in others. A hot summer in one region of the country and a cold one in another could impact the success of a frozen food promotion. Early alignment across marketing and logistics teams helps to eliminate these issues, allowing the promotions to realise their full sales potential.

Ultimately, by maintaining close integration throughout the promotion, logistics can play a key role in ensuring that promotional campaigns not only run well, but exceed financial expectations.

Andreas Roeder is a senior director at HAVI Global Solutions

CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates