Top 10 Advantages and Disadvantages of Sales Promotion

Advantages of Sales Promotion

Sales Promotion - Advantages and Disadvantages

Sales Promotion – Advantages and Disadvantages

1. When compared with advertising and personal selling, sales promotional activities are less expensive.

2. It enables both the dealers and the consumers to enjoy certain tangible benefits, e.g., free samples, gifts, price reductions, etc.

3. Certain sales promotional activities also enable the consumers to gain knowledge. For example, displays and demonstrations help them to,understand the product mechanism. The customers can also raise their queries and get clarification immediately. Pamphlets distributed to the consumers also provide useful information.

4. Advertising approaches the buyer indirectly and personal selling approaches the buyer directly. Whereas sales promotional activities involve both direct and indirect approaches.

5. Sales promotion helps to supplement and support both advertising and personal selling. No business can totally rely on advertising and personal selling alone.

6. Most of the sales promotional activities can be undertaken by the manufacturers themselves. Distribution of free samples and gifts, money refund and coupon offers, demonstrations, exchange of old for new and so on can be made by the manufacturers themselves. They may, at the most, need the help of the dealers only. Whereas, in the case of advertisement, media are required, e.g., Radio, TV and
newspapers. Personal selling requires efficient and committed salesmen.

7. The salesmen of a business cannot perform their work effectively without the use of sales promotional tools like pamphlets, audiovisual aids, cell phones and pagers.

8. When compared with advertising, sales promotional activities can create better and quicker impact. Free sample, gifts, demonstrations etc., can induce the consumers to act fast. One can, therefore, say that sales promotion satisfies the ‘A I D A formula’ to a greater extent.

9. The business can have better control over its sales promotional activities. The financial aspects, in particular, pertaining to sales promotion can be effectively managed. This may not be possible in the case of advertisement and personal selling.

10. Measuring the effectiveness of sales promotion can be easy when compared to measuring the effectiveness of advertising and personal selling.

Disadvantages of sales promotion

1. The number of sales promotional activities to be performed are too many, distribution of free samples and gifts, making such offers as price off and money refund, holding contests, participating in trade fairs and exhibitions, display and demonstration of goods and so on.

2. Sales promotion, by itself, cannot produce results. It can only supplement advertising and personal selling which are vital for a business.

3. Sales promotion is non-recurrent in nature. It cannot, therefore, be used continuously. The marketer has to select the most appropriate tool of sales promotion and the same shall be introduced at the right time.

4. It involves additional expenditure on the part of the business. Apart from the heavy expenditure to be incurred on advertisement and personal selling, the business may have to spend further on sales promotion. This leads to an overall increase in promotional costs.

5. The marketer cannot use any sales promotional tool at any time. Certain tools are to be used only in the introduction stage of a product, while others will be used in the growth and maturity stages. Indiscriminate use will not produce the expected results.

6. Another drawback of sales promotion is that there is a tendency on the part of all the competitors to use the same method of sales promotion at the same time. Such an approach may not benefit all. For example, if all the manufacturers of air-conditioners offer off season discount (during winter), the consumer may only decide based on brand popularity.

7. Sales promotion is generally required to promote sales of those brands which are not so very popular. Popular brands move fast in the market without much effort. Brand popularity can be secured mainly by means of advertisement and personal selling.

8. Sales promotion offers such as price cut, discount, free gift etc., may sometimes create an impression that these are being done to sell a poor quality product.

9. As far as the various types of discounts (cash discount, off-season discount and festival discount etc.) are concerned, there is always a feeling that these are not real and the price would have already been hiked.

10. As the sales promotional activities are short-lived, the results of such activities will also be short-lived. The moment the various inducements offered by the marketer are withdrawn, the demand is bound to fall.