Advantages and Disadvantages of Sales Promotion

A brief campaign or offer used by a company to increase interest in or demand for its good or service is known as a sales promotion.

There are various reasons why a company can decide to use a sales promotion (or "promo"), but increasing sales is the main purpose. Increased sales may be required to meet a deadline or spread the word about a new product launched by a company.

Advantages

Creates Differentiation

Differentiation is one of the most crucial components of a sales promotion. It won't be noticed if it's not unique. Even if you could be marketing to the same demographic, you can still make your campaign more interesting to them by emphasising characteristics that aren't included in or not supplied with the products they're already purchasing.

Offers a chance for Communication

A plan for promotional strategy should be in place at every organisation. You must build channels for consumer interaction whether you provide goods or services. Advertising, promotions, sweepstakes, and social media marketing are all part of this. Enhancing client retention, engagement, and satisfaction can also raise a company's return on investment. Also, customers can ask questions and clear their doubts.

Bolsters Word-of-Mouth

Word-of-mouth advertising is the most crucial aspect of any sales campaign. In especially when it comes to something like a good or service, most individuals believe what their friends and acquaintances say and recommend. With the quality of word-of-mouth advertising, sales promotion offers a number of advantages, including improving consumer loyalty and volume of sales. Furthermore, it may also be utilised by companies to create a distinctive brand identity. Therefore, compared to other kinds, this kind of marketing is frequently more economical.

Ideal for Cross-selling & Upselling

The capacity to develop cross-selling and up-selling chances is one of the most crucial tools that marketers have through sales promotion. By doing this, they can increase their sales without putting in a lot of extra effort. Additionally, they can designate discounts for customers who already own particular products and also promotions and rewards for those who purchase products.

Gives consumers a reason to Purchase

Giving consumers a reason to purchase is another benefit of sales promotion. The recipient becomes intrigued and thinks there is a justification for buying the product as a result. This can be accomplished using a variety of techniques, including the AIDA (Attention, Interest, Desire, & Action) or the PAS model (pain-agitate-solution).

Encourages Targeted Marketing

Everyone is searching for one unique marketing solution that will work for them. The instrument that will enable them to get better outcomes or increase sales while exerting less effort is the solution that the majority of people are looking for. There isn't a "one size fits all" method since; regrettably, every business and product is different, and each company must discover its own special strategy.

Probability of Increased Revenue

The best strategy to boost your revenue is to organise a sales campaign. Provide discounts, coupons, as well as other enticements to attract customers to purchase more goods. In order to use this marketing tool to reach as many people as possible, it is crucial that you develop a promotional strategy via a sales promotion approach.

Better Information Sharing

The biggest benefit of using internet sales promotion is how you can give them access to a wealth of knowledge. Social media platforms like YouTube, Instagram, Twitter, Facebook, and others make it simple to share images, videos, and product descriptions. Your website will see a boost in traffic as well as greater visibility in search engine results as a result of promotional strategies. Along with bringing in new clients, these features also aid in brand promotion.

Disadvantages

Increased Price Sensitivity

A common drawback of the sales promotion method is that customers are more price sensitive and will look for ways to cut costs while ensuring that doing so does not negatively impact their quality of life. So, if the brand gives a sale promotional price for some products and later increases the price, customers will usually wait for the specific product to get it at a lower price in future sales, which somehow slows down sales on normal days.

Might cause a Negative Brand Image

Sales promotions occasionally have a detrimental effect on the standard of the company's image. This could harm the brand's reputation. For instance, people might spread rumours to friends and co-workers about a bargain on a product that is harmful, such as potato chips or soup. If the product is being discounted significantly, customers can assume that the company sells low-quality goods.

Short Term Strategy

Sales promotion is not a long-term solution; instead, it is a short-term approach. However, it shouldn't be the exclusive emphasis of your marketing plan. It should be employed to ensure instant success. In actuality, businesses that significantly rely on sales promotion run a higher risk of experiencing a decline in revenues. Sales promotion is too momentary in nature and doesn't deal with the company's long-term problems like client relationships, product pricing, innovation, etc.

Might not be able to change Customer Perception

It's possible that a sales promotion won't be able to alter a customer's view of a product. This is one of the biggest errors that businesses make: they believe that a promotion will change how a customer feels about a product. If consumers don't trust your product, your business or even the product itself may fail. For instance, it was discovered that popular Samsung mobile devices from the Note series posed a risk of fire and explosion. For a few years, this damaged the company's reputation. In such a situation, sales promotion will be of no use.

Sales promotion is powerless to fix a Flawed Product

Sales promotion is powerless to fix a flawed product. The success of a sales promotion may be hampered by, for instance, a lack of distribution channels or subpar product quality.

Cannot compensate for a poorly trained Sales Force

Sales promotion is not really the ideal answer for all firms for a variety of reasons, including the fact that it cannot make up for a badly trained sales team. For starters, selling with promotions may not be the best strategy if a company's salespeople aren't adequately trained for the job.

Extra Stock Accumulation

Considering the future increased sales through sales promotion, if you produce more stock than required in advance, it may have a negative impact on your business as the excess stock may remain in the market for an excessive amount of time. It can block the invested money for some time. Conversely, the excess stock may induce other businesses to sell your product without your permission through their unique marketing techniques and make higher profits.