Pros and Cons of Sales Promotion

Sales promotion is the process of persuading customers to buy a certain product. It is normally designed as a short term tactic that is to be used to boost sales of a certain product. Examples of sales promotions include the use of coupons, contests, and even product samples.

Sales contests are mostly used to attract new customers or to introduce new products in the market. The main purpose of sales promotion is to boost sales of a product by creating a high demand in the market.

Pros and Cons of Small Scale Retailers

Pros of Sales Promotion

  1. To entice customers

Through sales promotion, customers can be enticed to buy a product hence boosting the sales of the company. This is achieved in various ways such as free samples, demonstrations or even price reduction on the product.

  1. Reduce the excess inventory

Sometimes a company may have excess inventory and it wants to clear it or reduce it. Sales promotion will be a better way of doing it so that it cannot go on waste. This will make customers go for the product and in return, the inventory will reduce.

  1. Improves the revenue

When there is a promotion on a product, many people will go for it and this will make the government get high revenue as there will be high sales.

  1. Way of passing information

A company may decide to use demonstration as a way of promoting sales and this will serve as an avenue of passing information to the consumers about the product hence a productive way of increasing sales.

  1. Creates a focused marketing approach

Through sales promotion, the company will aim at increasing the market of its products hence they will not only focus on promotion but also will encourage the customers to keep on using the product.

Cons of Sales Promotion

  1. It is a short term orientation

When a company decides to do sales promotion, it is usually for a specified period of time which is in most cases a short time. The customers may not really know about the product during that time and that may make the company not boost its sales through that short time.

  1. Easy to tarnish the quality of the image

The company may organize for a sales promotion that may at the end be of negative impact to the company as it may end up tarnishing the quality of the image that will result in a company running at a loss.

  1. Increases price sensitivity

The consumers may only be waiting for the time of sales promotion for them to purchase the product and thereafter not purchase it again so the company will use a lot of its resources which will not bring returns at the end hence the sales promotion not being effective.

  1. No guarantee that the sales will increase

With sales promotion, there is no guarantee that the sales are going to increase after that hence it is not a sure way of boosting sales of a product.

Summary

Sales promotion needs to be planned well so that it may create returns to the company as they are likely to use a lot of resources in it.

Leave a Comment