Advantages and Disadvantages of Sales Promotion

Advantages of Sales Promotion

Sales promotion can prove useful for marketers in several ways. These include:

  1. Helps Create Awareness of New Products  – Sales promotion is a highly effective methods for exposing customers and business partners to new products and for moving customers to take an action (e.g., sample a product).
  2. Strengthens Customer Involvement and Loyalty – Sales promotion can be the primary mechanism organizations use to interact with their customers and ultimately build a stronger connection (e.g., offer customer rewards).
  3. Can Be Quick to Develop – Compared to other types of promotion, some sales promotions can be quickly created and made available within a market (e.g., creation and distribution of email coupon).
  4. Used to Support Other Promotions – Sales promotion is often used as a supporting feature of other methods of promotion (e.g.,  salespeople may give promotional items to give to sales prospects).
  5. Helps Reduce Inventory – Sales promotion can be used to rapidly reduce inventory in situations where product replacement is needed (e.g., products nearing expiration date; clearing inventory to make room for new models).
Disadvantages of Sales Promotion

While the benefits of sales promotion are very attractive to a marketer’s promotional plan, there are downsides to this type of promotion. These include:

  1. May Condition Customers to Wait for Promotion – Repeated use of sales promotion may condition customers to wait until a product promotion is available before making their next purchase resulting in the marketer not maximizing a product’s revenue potential (i.e., customer will not pay full price).
  2. Can Lower Perception of the Brand – The overuse of some sales promotions may condition customers to believe the lower price is the regular price, which may cause them to not believe the product’s quality compares to similar competitors’ products that offer less frequent or no price reductions.
  3. Issues With Promotion Clutter – While in the same way an advertisement competes with other ads for customers’ attention, promotional clutter may also be an issue with sales promotions (e.g., excessive promotion sent by email, postal mail).
  4. Distributors May Not Be Willing to Accept – Some sales promotions targeted to consumers require the assistance of distributors (e.g., retailers), however, not all distributors may accept a consumer sales promotion, especially if the promotion requires the distributor to perform extra work.