Expansion of Production 3. Required fields are marked *. Sales promotion is used to entice customers to buy a product/service. Disadvantages of sales promotion 1. Using sales promotions maturity stage of the product can be prolonged and the firm can generate more and more revenues. Let us now see some of those things which a sales promotion cannot do. A successful sales promotion has the ability to nurture relationships with consumers through retention and engagement. The second disadvantage of personal selling is the high cost in maintaining this type of promotional effort. Branded goods with loyalty are no exception. In other words it is almost next to impossible achieve sustainable competitive advantage through these promotions. The classic research done by Dobson, Tybout and Sternal (1978) argued that use of promotion decrease the brand evaluation. Sales promotion schemes keep name and brand product in the mind of people, which contribute to the Goodwill of the firm. What is Collective Bargaining and Why it is Important to Workers? Promotions offering price deals influence the attitudes of consumers towards buying the brand. Disadvantages. Sales promotion cannot built brand loyalty or enhance brand image. Disadvantages of Sales Promotion. Sales promotion techniques stimulate the desire in consumers to go for promotion product with more quantity. Related: Process of Price Determination with Examples (Step by Step). It provides reluctant decision makers with an incentive to make choices by increasing the value offered by a particular brand. So the selling agent can get instant feedback from the prospective buyer. Personal selling involves an oral presentation of the message in the form of conversation with one or more prospective customers for the purpose of making sales. Excessive price discounting trains buyers to focus on the low price as the source of value with a particular business or good. Top 10 Need & Importance of Workers Participation in Management. Disadvantages or Limitations of Sales Promotion A manufacturer may apply area-specific Strategies for sales promotion.eval(ez_write_tag([[300,250],'googlesir_com-box-4','ezslot_13',120,'0','0'])); It can also be targeted to achieve specific objectives, such as increasing repeat purchase or stock clearing. In fact, a promotion is speed up the killing of a bad product. Sales promotion cannot built brand loyalty or enhance brand image: There are disputes over the fact whether sales promotions have negative effect on brand equity and brand evaluation. It draws their attention to the products/services being offered. i. B) it does not help in building market value. Sales promotion has its own advantages and disadvantages. It also reduces the consumer reference price, which may hamper long-term profitability of the firm, v. It is difficult to decide whether the price discount should be offered in percentage (of real price) terms or in absolute rupees terms. Advertising expenditure can be converted into revenues with the support of sales promotion efforts only. Sales promotion cannot overcome poor product distribution. Advantages of sales promotion . Drives customer decision making – Limited availability offers can create a sense of scarcity in your … ii. In sales promotion efforts many costs, like management/ Salesforce time and effort, do not consider in the direct costs. Sales promotion has grown substantially in recent years. (b) When there is no product improvement. 60% off Offer Details: 15 Main Advantages and Disadvantages of sales promotion. If the attitude toward the brand has been quite low then a sales promotion is likely to encourage a switch to the promoted brand. Despite its recent widespread use as an important element of marketing campaigns, the essence of sales promotion is that it is intended as a very short term influence on ‘sales’. Sales Promotion. 2. c. It is difficult to measure its promotional effectiveness. Sales promotion is an element in competitive age to survive and grow. When sales promotion overdoses, the emotion or the need that surrounds them disappears. ii. In case of consumer oriented deals: i. It is actually suggested that with low involvement product category promotions might actually have positive influence on brand evaluation Scott Davis, J. Inman, L. McAllister 1992). The advantages of our Sales Promotion methods. ... employing a sales force has many hidden costs in addition to wages. TOS 7. DISADVANTAGES OF SALES PROMOTION Limited. More purchase on the part of retailers and Consumers. a. Marketeers can reap the following advantages from the implementation of appropriate sales promotion technique: eval(ez_write_tag([[336,280],'googlesir_com-medrectangle-3','ezslot_0',105,'0','0']));Sales promotion helps in increasing sales in a short span of time. Your email address will not be published. b. The disadvantage of sales promotion though maybe the lack of effectiveness. Sales promotion can be targeted on specific groups especially selected retailers … There is the thing that only 16% of the Trade Promotion events were profitable, based on incremental sales of brands distributed through retailer warehouses. It has the following disadvantages: It is for a short-term. Extreme use of it … One disadvantage of personal selling is that you cannot reach as many customers as quickly. C) it can draw competitors into a price war if overly aggressive sales promotions are used. Top 7 Powerful Techniques of Inventory Control for Stock Management, 18 Major Advantages and Disadvantages of Supermarkets, 31 Factors Affecting the Choice of Distribution Channels (Explained), Process of Price Determination with Examples (Step by Step), 18 Reasons and the Importance of Product Innovation (Explained), 15 Reasons for the Occurrence of Industrial Conflicts, How to Make a Successful Participative Management, 10 Basic Limitations of Workers Participation in Management. Advantage of … First, consumers have accepted sales promotion as part of their buying decision criteria. The costs need to be carefully planned and monitored, or a sales promotion … Customers expect promotions all the time, viii. Disadvantages of Sales promotion Increase Price Sensitivity: Sales promotion is disadvantageous for business organization if it is provided on a regular basis by organization. Sales promotion cannot reverse a declining sales trend: According to research done probability of repurchase after purchasing on deal will vary according to the type of sales promotion and the cues that these promotion sent (Sawyer and Dickson 1984). Notify me of follow-up comments by email. Sales promotion can be targeted on specific groups especially selected retailers and their customers. Generally only short term in their effects, iv. Sales Promotion and Publicity; Advantages of Personal Selling. What are the Disadvantages of Sales Promotion? Customers may become too price-sensitive and wait for promotional deals to be announced by the company. Hence, the increase in sales is only for a limited period of time which can negatively affect the future of these companies and organizations. iv. Before publishing your articles on this site, please read the following pages: 1. Not suitable if there are thousands of important buyers. Regular customer may have some doubts about quality considerations due to excessive sales promotion. There is the thing that only 16% of the Trade Promotion events were profitable, based on incremental sales of brands distributed through retailer warehouses. Disadvantage: Changes Customers' Price Perceptions The short-term motive of sales promotions can work against the typical long-term goals of companies, including creating customer loyalty. It is a general tendency among buyers to anticipate more and more price reductions which are not good for long term reputation of the firm. Copyright 10. Which of the following is a disadvantage of sales promotion as a promotional strategy? iii. 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