The effect of advertising price prototion, and shelf prosition upon product sales.

Significant levels of financial and human resources are committed each year by Fast Moving Consumer Goods companies to attain a competitive advantage in the market place. Traditionally, the greatest proportion of expenditure of effort and resources has been in the marketing mix elements of advertising and price promotions. More recently, some companies have included product shelf positioning or shelf management as a further component of the marketing mix.Until recently and despite the high levels of expenditure and commitment, very little in the way of objective evidence has been available to substantiate the pay back achieved from the various elements of the marketing mix. The introduction of in-store scanners and panel data has allowed researchers to develop the process of establishing generalisations of the effect advertising, price promotions and product shelf position have upon sales.Far from being of academic interest only, the evolution and momentum of Efficient Consumer Response (ECR) makes it increasingly necessary for the manager to quantify the impact elements of the marketing mix have upon sales. This knowledge will serve as the basis for supply of product through the supply system. This study evaluates the impact of advertising, price promotions and shelf position upon sales in the yoghurt category. Results indicate that advertising and price are significant determinants of product sales but shelf position is not. However, the model only accounts for 3% of sales variance. The implications are that other elements perhaps outside of the marketing mix have a significant contribution to sales or that the statistical model used is insensitive as a predictive tool. The result is interesting given the considerable effort and resources the industry places in attaining the "right" shelf position. For marketers of consumers goods this research obviates the need for closer scrutiny of the way the marketing mix is compiled.It will be argued that at the very least marketers and managers should consider employing the use of the variables indicated in this research. Failure to do so will result in the company being at a competitive disadvantage to those firms that do employ a holistic approach to product sales.