A major aspect of many firms’ marketing strategies over the past decade has been the development ofnew products. Consumer-product companies are launching nearly 30,000 new products each year, according to the research firm Marketing Intelligence Service (compared with only 2,689 in 1980). The market has become saturated with new brands, which often lack any significant advantages that can be used as the basis of an advertising campaign. Thus, companies increasingly depend on sales promotion to encourage consumers to try these brands.

Marketers are relying more on samples, coupons, rebates, premiums, and other innovative promotional tools to achieve trial usage of their new brands and encourage repeat purchase. Promotions are also important in getting retailers to allocate some of their precious shelf space to new brands. The competition for shelf space for new products in stores is enormous. Supermarkets carry an average of 30,000 products (compared with 13,067 in 1982). Retailers favor new brands with strong sales promotion support that will bring in more customers and boost their sales and profits. Many retailers require special discounts or allowances from manufacturers just to handle a new product. These slotting fees or allowances, which are discussed later in the chapter, can make it expensive for a manufacturer to introduce a new product.