A promotion is an activity where a type of marketing communication is used to inform a target audience of a particular product or service, for example that it now has a discounted price. Companies engage in promotions to boost sales and revenue, but also to disrupt customer behavior in their favor. When a company runs a promotion, communication must put that forward to the target audience to ensure the desired uplift in demand for that product or their store.
Promotions also generate a change in market shares. The idea is to permanently disrupt the behavior of the customer, typically for products that are bought routinely. The promotion pushes the customer to try something new, ideally changing their preferences so they will come back to buy the same product later.
A promotion is essentially a negotiation between the retail channel and the brand of the product being promoted. Often, itâ€™s a joint effort between the two to lower the price for the customer, and to advertise about the promotion. The retailers benefit from having more people drawn to their stores and hopefully become loyal shoppers, whilst the brands are getting an increased market share of their brand.
In conclusion, retail channel promotions aim to disrupt customer behavior to their own benefit and brands seek to increase their market share by promoting their product.