Sales promotion is a short-term marketing strategy.
Sales promotion and advertising is a component of the marketing mix, which also includes the product, the method of pricing and the method of distribution. Sales promotion serves the role of enticing a buyer to take a desired action, such as purchasing in multiple quantities or trying a new product. Although sales promotion offers many advantages, there are also some potential pitfalls.
Function
Sales promotion is typically used to achieve a specific purpose. Some common reasons include introducing a new product to the marketplace, attracting new buyers for an existing product, competing with a manufacturer of a similar product or helping seasonal products sell during their off-peak season. Ultimately, the goal of all of these functions is to maintain or increase product sales.
Types
Several types of sales promotional methods can be used. For example, salespeople can attempt to entice a store owner to purchase more merchandise by offering her $2 off a case of a product if she purchases in multiple quantities. A product package may contain extra merchandise for free, such as a bundle of bar soap featuring an extra cake. Another type of sales promotion is to place a coupon on a product package that can be used toward the next purchase.
Benefits
One example of a sales promotion benefit is that it can give a marketer a competitive edge. For example, in the case of the bar soap, the extra cake could make the difference in a customer purchasing one brand over another. It can also generate a sale at a time when customers wouldn't typically think of purchasing a product, such as offering 50 percent off the price of a snow shovel in the middle of summer.
Time Frame
Sales promotions often occur for a limited time. This can create a sense of urgency for the customer to make a purchase before an offer expires. A sales promotion may also be designed to exhaust a supply of discontinued or old merchandise and will expire when the existing supply has been liquidated.
Warning
Although sales promotion offers many benefits, there are also potential drawbacks. Customers may only purchase the products or stock up while the promotion is available, which can lower a company's profit margin. When customers buy the product only for the promotion, they are typically only concerned about price and will not differentiate your products from those of your competition.
Tags: Although sales, Although sales promotion, extra cake, multiple quantities, offers many, product package, promotion offers