Sales Promotions in theSwedish Lifestyle Category : An evaluation of promotional effects

In recent years, a secular change in how marketers communicate with its consumers has been observed within the Fast-Moving Consumer Goods (FMCG) industry, sales promotion is now a key driver of marketing expenditure. To retain competitiveness industry incumbents need to accurately measure and evaluate the promotional effects in order to develop an efficient future marketing strategy. This also holds for the Swedish Lifestyle Category – a former niche products market – that has been experiencing a massive growth due to the current health trend. In this paper, the Swedish Lifestyle Category is linked to the two theoretical frameworks; FMCG industry challenges and evaluation of sales promotions. In particular, a customized model framework for measuring sales promotions based on store sales data is developed through a case study of a large Swedish Lifestyle manufacturer. Data was collected through both qualitative and quantitative methods to increase quality of research. Results suggests that the Swedish Lifestyle category in general behaves as other FMCG categories on the topic of statistically significant price promotion effects and decomposition across cross-brand, cannibalization and category expansion effect. However, no consistent pre- and postpromotional patterns were found, which implies that Lifestyle consumer behavior holds a particular set of characteristics. It was also found that there are large statistically significant asymmetries of promotional effect across distribution channels, product types and brands. The results imply that managers should direct extra attention to adapting sales promotions to the particular setting (i.e. brand, product and dist. channel) along with including these asymmetries in estimating return of investment.