Sales Promotion

Adequately and appropriately defining the problem is the key to the case analysis. A problem definition should be framed as a decision to be made. Therefore, “sales have fallen off” is not a properly defined problem. The problem should not be defined so narrowly that good alternative courses of action are not considered. Therefore, “should we increase advertising” is too narrowly defined to result in a thoughtfully considered decision. The problem definition should contain three key elements: decision objectives; success measures; and decision constraints. For example: how can we maintain our quality brand image (objective); and regain our lost market share (success measure); given limited funds for advertising and sales promotion (constraint)? This section should identify the alternative courses of action to be investigated. This section should also list the major dimensions, or states of nature in a decision theory framework, of the decision (i.e., those factors on which the choice of an alternative will largely depend). These states of nature are uncertain and, for the most part, are uncontrollable: competitor actions, consumer needs and response, and turns in the economy are examples. The potential payoff of any alternative depends on the “true” state of nature