Advantages and Disadvantages of Sales Promotion

Sales Promotion Advantages

The major sales promotion advantages are briefly explained below:

  1. Getting New Customers for Existing Product: Every organization strives to acquire more customers for their existing products. The job of the organization is to extend incentives at the right time so that new customers are attracted to the existing products.
  2. Stimulating Middlemen: It is absolutely necessary to continuously motivate the middlemen to enhance the sales of the organization this is done by giving incentives, discounts, etc.
  3. Motivating Demand during the off-season: It is a proven fact that demand for seasonal products falls after the season gets over. For example, sales of air conditioners and ceiling fans decline after summer it is the objective of sales promotion to try and see that sales do not suffer too much and some uniformity is maintained.
  4. Motivating the Sales Representatives: The sales representatives of the organization need to the motivated always. This is because they play a very important role in increasing sales. Sales promotions result in motivating salespeople.
  5. Facing the Competition: Sales promotion helps in de3signing new and unique ways to enhance sales. Different competitors develop different methods to deal with competition.
  6. Extra Benefits: Different types of benefits at different timeframes are offered to the customers. For example, free samples before the actual purchase, gifts, and discounts during the purchase and after-sales-service after the purchase, are few benefits, which are provided to the customers through sales promotion.
  7. Information of Latest Products: Sales promotion helps in informing the largest customers about the latest products and services of the organization. This helps in increasing the sales of such products and services. By consuming such new products and services, the standard of living of customers increase.
  8. Helps in Managing Budget:   Every customer has limitations on their monthly and yearly budget. It is for the customers to utilize fall in prices and various sales promotion schemes in order to keep their purchases within family budget.

Sales Promotion Disadvantages

  1. Increased Price Sensitivity: Since sales promotions activity is an integral part of marketing and sales, the consumers begin to wait for promotional deals. Branded goods with loyalty are no exception. Hence they wait for discounts, stock clearing sales, monsoon sales, festive promotion deals, etc.
  2. Quality Image may become Tarnished: If an organization focuses less on promotion, it may adversely affect its brand image. Its quality image in the public may become poor.
  3. Merchandising Support from Dealers is Doubtful: There are issues with the dealers as well. They may not pass on the benefit of discounts to the customers. As they may not have sufficient space to store the goods, the product may not be popular in their shops or the benefit offered is less than the effort required, the dealer may not be interested in organizational
  4. Short-Term Orientation: Short-term benefits accrue because of the sales promotion activities. But sometimes, if these methods are not properly applied and implemented then can have opposite effects on the future of the organization.
  5. Attracting New Customers at the cost of Existing Ones:  The organization has to be very careful while making promotional offers. It should not end hurting the sentiments of existing customers. For examples, if an organization offers a discount on its products only for new customers, then the existing customers may feel that they have been ignored. It is, therefore, necessary to make such offers on a personal basis so that only non-customers know about these offers.
  6. Easy Imitation: In case of being highly productive, the sales promotion techniques used by an organization can be easily copied by the competitors. Competitors, generally, imitate successful sales promotions.
  7. Lower Margins: In the absence of exceptional benefits from that of the competitors, customers can be compelled to purchase the product only in case of lower prices during the promotion. However, it results in lower profit margin as well.