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    Importance of Sales Promotion

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    Hajra Khan
    Sales promotions are an important technique that help companies gain a competitive edge and attract new customers by encouraging buyers to try new brands or purchase more of promoted products. While sales promotions often increase short-term sales, their impact on long-term financial performance and profitability is mixed. Additionally, the effectiveness of sales promotion strategies depends on factors like the attractiveness of the targeted brand and type of product.

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    Importance of Sales Promotion

    Uploaded by

    Hajra Khan
    415 views3 pages
    Sales promotions are an important technique that help companies gain a competitive edge and attract new customers by encouraging buyers to try new brands or purchase more of promoted products. While sales promotions often increase short-term sales, their impact on long-term financial performance and profitability is mixed. Additionally, the effectiveness of sales promotion strategies depends on factors like the attractiveness of the targeted brand and type of product.

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    Importance of Sales Promotion

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    Sales promotions are an important technique that help companies gain a competitive edge and attract new customers by encouraging buyers to try new brands or purchase more of promoted products. While sales promotions often increase short-term sales, their impact on long-term financial performance and profitability is mixed. Additionally, the effectiveness of sales promotion strategies depends on factors like the attractiveness of the targeted brand and type of product.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    415 views3 pages

    Importance of Sales Promotion

    Uploaded by

    Hajra Khan
    Sales promotions are an important technique that help companies gain a competitive edge and attract new customers by encouraging buyers to try new brands or purchase more of promoted products. While sales promotions often increase short-term sales, their impact on long-term financial performance and profitability is mixed. Additionally, the effectiveness of sales promotion strategies depends on factors like the attractiveness of the targeted brand and type of product.

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    Importance of Sales Promotion

    Pandey and Mishra (2012) described sales promotion as powerful technique that helps in getting

    an extra competitive edge to attract new customers. Consumer’s price consciousness is an

    important concern of sales promotion strategies, because these encourage the buyers to try

    promoted brads or purchase greater quantity of products. Retailers also add some offers in sales

    promotional activities to target the end customer.

    Rizvi and Malik (2011) describe that when sales promotion techniques are implemented

    effectively they bring often increased sales during short term. This describes the concern of

    organizations to devote a heavy sum funds for launching sales promotional schemes. This proves

    that, effects of sales promotional schemes has not positive impact on the financial position of

    company in the long run, but it has significant impact on firm profitability in particular time

    span.

    Impact of sales promotional strategies varies on the bases of the attractiveness of the

    targeted brand. (Alvarez & Casielles, 2005). These are useful tools that caused increased in

    brand demand that has strong market position less risk associated with the existing brand

    (Blattberg, Robert, & Neslin, 1990).

    The majority of the research studies made on sales promotion based on the use of

    monetary promotions whereas little research is done on the non-monetary promotions and with

    lack of concentration on the Asian market (Garretson & Burton, 2003).

    Research studies in Malaysia discovered that for manufacturer of retailers to encourage

    customers to shop at their counters, sales promotion would appear to be the most suitable way or

    medium (Ndubisi & Chiew, 2005, 2006). Previous studies mentioned that well implemented

    sales promotion methods would help retailer owners or manufacturers to persuade customers to
    patronize their sales counters and to try out the products and services are promoted, and in return

    would facilitate the manufacturers and retailers to get their desired objectives (Alvarez &

    Casielles, 2005).

    According to Kotler and Armstrong (2002) Consumer promotion strategy is employed to

    increase the sales volume of the products. Price packs, free samples, coupons, sweepstakes are

    the techniques of consumer sales promotions. Pauwels, Hansens & Siddarth (2002) has explained

    the impact of sales promotions on the permanent bases on aggregate annual sales for two types of

    products; perishable and storable products. It is found that these types of products have no

    prominent effect of sales promotion techniques. It is also observed that impacts of promotion are

    short lived and remain effective 2 week on average and at most 8 weeks for storable and

    perishable products.

    Sales promotions create two reactions in customers. The first one is increased in

    consumption, i.e. larger quantity of a product is bought. The second effect of promotions is to

    store product for the future use. Chandon and Wansink (1999) compared these effects for certain

    kinds of product. Though, these effects vary depending on the attractiveness of the promotional

    activities employed.

    According to Gupta (1993) it is possible that customers, who do not purchase the certain

    brand, will have a desire to acquire it due to sales promotion offers which attract. However,

    Brandweek (1994) argued that there are some people who often change the brand because of a

    promotion change back to their preferred product brand when purchasing that type of product

    after.

    It is essential to mention that the use of sales promotional tools promotes the brand and

    items purchase and increases consumption pattern. However it is also important to keep yourself
    alert, as the negative effect could be generated on certain times. This may occur when the buyer

    perceives that he is being cheated for unnecessary activities to create the product position. This

    perception then provokes the negative effects to the intended results, i.e. the consumer stops

    purchasing the promoted products and services (Simonson, Carmon & Crry, 1994). It is possible

    too that the consumers avoid purchasing the promoted products because he has not to justify his

    research to their belonging group (Simonson, 1989). Another reason of not getting expected

    results is that the buyer feels that he is being used and will “punish” the seller by not buying the

    promoted product or brand.

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