10 Main Advantages And Disadvantages Of Sales Promotion | What is Sales Promotion? Merits and Demerits of Sales Promotion

Sales Promotion Advantages And Disadvantages: The power of marketing strategies are immense. And in order to be successful, the strategies that you implement need to be carefully crafted and powerful enough for consumers to want to buy your product. This is where sales promotion comes into play. But what exactly is sales promotion?

What is Sales Promotion? Sales Promotion Advantages and Disadvantages 2022

Sales promotion is the set of activities designed to generate sales. Promotion is an investment in time and money that allows the company to compete with its competitors. The goal of promotion is to increase customer satisfaction and loyalty, which serves as a buffer against cost-cutting measures like price discounts.

Essentially, it is a marketing strategy that motivates customer buying through discounts, offers, or other incentives. It can be used to increase sales of existing products and/or services, generate new customers, and create loyalty. Sales promotion usually involves discounts, free gifts, rebates, contests, and more to boost sales. Sales promotion has been around for centuries when merchants would give away items in hopes of selling their products. This was called the “Give-Away Policy.

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Today, companies are still giving away products in hopes of selling them. You should be considering your company’s sales promotion efforts in the following ways.

1. What will be offered?
2. How can customers win?
3. Are there any limitations to what can be offered?
4. How can you tell if the promotion is working?
5. How often should promotions be offered?
6. Is there an expiration date on the offer?

If you answer ‘No’ to any of these questions, you are going to have a hard time promoting your company. If you answer ‘Yes’ to all the questions, you are ready to market your company. Remember that the purpose of a sales promotion is not to be competitive. It’s to make profits in the long run.

• Advantages of Sales Promotion
• Disadvantages of Sales Promotion
• Comparison Table for Advantages and Disadvantages of Sales Promotion
• Conclusion on Sales Promotion Advantages And Disadvantages
• FAQs on Sales Promotion Advantages And Disadvantages

Advantages of Sales Promotion

Following are a few advantages of Sales Promotion:

• Helps to Differentiate: One of the most important aspects of a sales promotion is creating differentiation. If it’s not different, it won’t get noticed. Even though you may be marketing to the same audience, you can still make your promotion more appealing to them by highlighting features they don’t already have or aren’t offered with what they’re already buying.
• Creates opportunity for communication: Every company should have a plan for sales promotion. Whether you sell products or services, you need to create communication opportunities with your customers. This involves advertising, promotions, sweepstakes and social media marketing. Moreover, it can also improve the company’s ROI by increasing customer retention, customer engagement, and customer satisfaction.
• Promotes word-of-mouth: The most important feature of sales promotion is word of mouth. Most people trust the claims and recommendations of people that they know, particularly when it comes to something like a product or service. Sales promotion has many benefits such as building customer loyalty and increasing sales volume, but it can also be used by businesses to establish their brand identity. As a result, this type of marketing is often more cost-effective than other forms.
• Ideal for cross-selling and upselling: One of the most important tools that marketers have is the ability to create cross-selling and up-selling opportunities. When they do this, they are able to maximise their sales without having to go through a lot of extra work. They can also create promotions and incentives for customers who buy products as well as create discounts for those who already own certain products.
• Gives a reason to buy: Another advantage of sales promotion is the creation of a reason to buy. It sparks interest in the recipient’s mind so that they believe that there is a good reason to purchase the product. This can be done through various methods such as AIDA (Attention, Interest, Desire, and Action) or the PAS model (pain-agitate-solution)
• Promotes focused marketing: When it comes to marketing, everyone is looking for that one magic bullet. The answer most people are searching for is that one tool that will help them get more sales or better results with less effort. Unfortunately, there’s no such thing as a “one size fits all” solution and each company has to find the unique approach that works best for their particular industry and product.
• Probability for higher revenue: Creating a sales promotion is the best way to increase your revenue. Offer discounts, coupons, and other incentives to encourage people to buy more items. It is important that you create a promotional strategy so that you can reach as many people as possible with this marketing tool.
• Provides information for your customers: The main advantage of using online sales promotion is that you can create a source of information for your customers. It’s easy to post pictures, videos and descriptions of your products on social media sites like YouTube, Instagram, Twitter, Facebook, etc. This will help increase the number of visitors to your website and make it more visible to people in the search engines. These features also help you promote your brand as well as attracting new customers.

Disadvantages of Sales Promotion

Following are a few disadvantages of Sales Promotion:

• Increased sensitivity to price change: A common disadvantage of this strategy is that the customer becomes more price sensitive and will look for a way to save money, even if it doesn’t affect their quality of life.
• Might cause a negative brand image: Sometimes sales promotions have a negative impact on the quality of the company’s image. For example, if people see a sale on an unhealthy product like potato chips or a soup, they may gossip about it to friends and colleagues. Customers might also think that the company is offering low-quality products if the discount on the product is very high.
• Short term strategy: Sales promotion is not a long-term solution. It should be used to ensure immediate success, but it shouldn’t be the only focus of your marketing strategy. In fact, companies that heavily rely on sales promotion are more likely to see their profits fall. Sales promotion is too short-term in nature and doesn’t address long-term issues for the company such as customer relations, product pricing, innovation, etc.
• Sales promotion might not be able to change customer perception: One of the biggest mistakes that companies make is to think that presenting a promotion will transform a customer’s opinion about their product. If people don’t believe in your product, then your product or even the company may perish. For instance, the popular Note series mobiles from Samsung were found to be a fire and an explosion hazard. This dented the company’s image for a few years.
• Sales promotion cannot save a bad product: Sales promotion cannot overcome product problems. For example, a lack of distribution channels or poor product quality will affect the effectiveness of sales promotion.
• Sales promotion cannot compensate for a poorly trained sales force: There are many reasons why sales promotion is not the perfect solution for all businesses. For one, it can’t compensate for a poorly trained sales force. If a company’s salespeople aren’t properly prepared for their roles, selling with promotions can actually be counterproductive.
• Extra stock could accumulate: Sales promotion may affect your company negatively because it could cause the extra stock to stay out in the market for too long or it could cause other companies to make unauthorised sales of your product.

Comparison Table for Advantages and Disadvantages of Sales Promotion

Following are the advantages and disadvantages of Sales Promotion.

Conclusion on Sales Promotion Advantages And Disadvantages

Sales promotion is a marketing technique with the goal of generating interest and increasing sales. Sales promotions can be classified into either “low cost” or “high-cost.” Low cost promotions include discounts, free samples and price reductions. High-cost promotions include advertising, public relations, and getting in the media. Some businesses have less incentive to use high-cost methods because they do not make as much money as they would if they used low-cost promotions.

FAQ’s on Sales Promotion Advantages And Disadvantages

Question 1.
What is Sales Promotion?

Answer:
Sales promotion is a marketing technique that uses different types of media to encourage consumers to buy products. It can include discounts, rebates, vouchers and special sales.

Question 2.
What are the advantages and disadvantages of Sales Promotion?

Answer:
Sales promotion is a powerful tool for businesses that want to increase their profits. It can be used to entice potential customers to buy a product or service in order to meet the demand, control costs, and generate leads. However, many experts argue that sales promotions have negative effects on consumers. For instance, many promotions can be viewed as unethical or even detrimental to health because they encourage buying behaviour that would not otherwise exist (such as the questionable advertisements of the 19th and early 20th century where radium-enriched water was promoted as a health drink.)

Question 3.
Why are sales promotions important for businesses?

Answer:
Sales promotion is a marketing strategy aimed at increasing market share. It works by promoting the product or service at an affordable price, offering in-store specials and coupons for targeted demographics, and creating urgency by rapid discounts and limited-time offers. Sales promotions can also be marketed as bargains or savings for a specific event such as Black Friday or Cyber Monday.