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DISADVANTAGES OF SALES PROMOTIONS

Discuss DISADVANTAGES OF SALES PROMOTIONS within the Introduction to Advertising forums, part of the BMM Paradise for Bachelors in Mass Media Forum category; DISADVANTAGES OF SALES PROMOTIONS While sales promotion is a powerful and effective method to produce immediate short term positive results, ...

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DISADVANTAGES OF SALES PROMOTIONS
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Abhijeet S
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DISADVANTAGES OF SALES PROMOTIONS - October 11th, 2010

DISADVANTAGES OF SALES PROMOTIONS

While sales promotion is a powerful and effective method to produce immediate short term positive results, it is not a cure for a bad product or bad advertising. In fact, a promotion is speed up the killing of a bad product.

• Increased price sensitivity

Frequently promoted brands in the product category, especially on the basis of price, make consumers and traders more price sensitive not only for the promoted brands but for other brands as well in the same product category.
Consumers wait for the promotion deals to be announced and then purchase the product. This is true even for brands where brand loyalty exists. Customers wait and time their purchases to coincide with promotional offers on their preferred brands.


• Quality image may become tarnished

If the promotions in a product category have been rare, or the product happens to be of high involvement category, the promotions could have a negative effect about its quality image. Consumers may start suspecting that perhaps the product has not been selling well, the quality of the product is true compared to the price or the product is likely to be discontinued because it has become outdated.


• Dealers forward buy and divert stocks


In case of deals for the trade, many dealers forward buy, in excess of their inventory requirements. This is particularly happens if a product is low bulk, much in demand and the inventory holding costs are favourably low. This is true both for wholesalers as well as retailers.


Forward buying of excessive stocks on deals or quantity discounts can lead to diversion of some of the stocks in non-deal areas. Forward buying of excessive stocks on deals or quantity discounts can lead to diversion of some of the stocks in non- deal areas.


Wholesalers and retailers do not hesitate in selling these excess stocks in non- deal areas on prices that are less than the list price, but keeping some reasonable margin for themselves. This is likely to have a negative effect on price discrimination efforts of the company as dealers and those areas would not be buying even the normal requirements from the company.

• Merchandising support from dealers is doubtful

One of the trade promotions tool is to offer promotional allowances to trade people to motivate them to provide merchandising support and to pass on some benefit to consumers. This generally is the condition attached with such promotional allowances. In many cases, the dealers do not cooperate in providing the merchandising support nor do they pass on any benefit to consumers. The retailer might not be willing to give support because he does not have the place, or the product does not sell much in his shop, or may be he thinks the effort required is more than the commission/benefit derived.

• Short-term orientation

Sales promotions are generally for a short duration. This gives a boost to sales for a short period. This short-term orientation may sometimes have negative effects on long-term future of the organization. Promotions mostly build short-term sales volume that is not maintained. Heavy use of sales promotion, in certain product categories, may be responsible for causing brand quality image dilution.


The argument given in favour is that companies should develop superior products or services which are better than competitors and consumer should be convinced through appropriate and focused advertising about the superiority of the product and its image.

This will result in lasting brand identities reflecting consumer values. Then there will be no need to offer any extra benefits; only the lasting brand image will keep customers loyal to the brand.
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Re: DISADVANTAGES OF SALES PROMOTIONS - July 29th, 2014

Thanks for Sharing information on Disadvantages of Sales Promotions
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Re: DISADVANTAGES OF SALES PROMOTIONS - May 21st, 2015

Sales promotion is effective in creating brand awareness and generating brand recall, I am posting some of the advantages of sales promotion:-
Luring New Customers with Price
By offering a reduced price on a popular item, you can lure customers away from competitors, which may ultimately help turn them into regular shoppers. For example, if you own a small electronics store that's competing with a large retailer, offer a discounted price on a popular cell phone model for a limited time. If you serve the customers well during the purchase process, they may be willing to come back.

Gaining Community Favor
Create a good name for your business by staging a promotion that supports a worthy cause. For example, if your town needs a new fire engine or police car, donate a portion of customer purchases at your business to the cause. You'll be helping your community, which is a win-win for everyone and may lead to more business for you.

Encourage Repeat Purchases
Businesses like airlines and hotels successfully use rewards programs to encourage customer loyalty, and you can do the same for your small business. If you own a coffee shop, for instance, give customers a rewards card that you hole-punch each time they make a purchase. After they make five or 10 purchases, they can redeem the card for a free cup of coffee.

Entice Reluctant Consumers
Giving away free products or services is a good way to get people to try them for the first time, which may lead to a purchase. If you own a deli and you've added a new sandwich to the menu, pass out small samples to each of your customers as they come in the door. If you operate a health club, offer a free trial membership or free personal training sessions to get people to give you a try.

Providing Information
A sales promotion can help you provide information to potential customers that aids them in making a decision. This can be beneficial for products or services that are complicated or are unfamiliar to consumers. For example, if you're a financial planner and you're attempting to gain clients in the area of retirement planning, a free seminar allows you to explain what you do and how some of your investment products work.

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About the Author
Chris Joseph writes for newspapers and online publications, covering business, technology, health, fitness and sports. He holds a Bachelor of Science in marketing from York College of Pennsylvania.



Would you please tell me something about sales strategy,technique,marketing and advertising.
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