ASSIGNMENT – 3

NAME: ABDUL HADI SAHOO

ROLL NO: 2171021
CLASS: BBA- 7TH -A (Morning)
SUBJECT: STRATEGIC MARKETING

SUBMITTED TO: MAM SARAH IMRAN

DATED: 24TH JUNE 2020
ADVANTAGES OF SALES PROMOTION

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

 Increase Product’s Awareness & Sales – Sales promotion is a highly effective

method for exposing customers and business partners to new products and for
moving customers to take an action (e.g., sample a product). It also helps in
increasing sales in a short span of time. It can eliminate idle cycles in some
specific goods.

For Example, due to covid-19 situation, Lays has started sales promotions online
on Instagram and Facebook, that one can buy a whole carton for Rs.540/- while
it was usually for Rs.600/- containing 12 packets each worth Rs.50/-, the reason
behind it can be seen is brand awareness and increase in sales through bulk
orders.

 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). As
promotions offering price deals influence the attitudes of consumers towards
buying the brand and consumer’s price perception has a significant effect on
attitude of the consumer.

For Example, Unilever gives bundle offers in its sales promotions of its Sunsilk
product, where instead of buying a single shampoo and conditioner for their
whole price, consumers can buy them as a bundle with discounted price. This
creates customer value for the company and its product.

 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). Sales promotion can also be used to
achieve other objectives, such as widening distribution or ‘shelf facing’. They may
also help in increasing the effectiveness of advertising.

For Example, Metro cash and carry is always giving newer sales promotions on
different products, in order to attract consumers to buy from it. In dynamic market
changes they are always processing information, that what products are
increasing in demand or what products have cheaper price. Accordingly, they
make their sales promotions, as during Ramadan they give good promotion on
Jam-e-Shireen bottles in bundle offers.
  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).

For Example, Dalda cooking oil gave bundle offers with Lemon Max Dishwasher,
this was in order to market both the products along with purchasable price. And
increase sales by selling both brands in one go. Dalda cooking oil is a leading oil
brand in Pakistan, so this helped greatly in publicity of Lemon Max Dishwasher.

 Reduces 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).

For Example, Outfitters an apparel brand working in Pakistan, offers sales

promotions in different seasons such as Winters/Summers sales promotions. The
aim is to sell their products more and clear out their stocks during these sales
promotions. This saves them a lot of space in inventory for the next season.

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:

 Price Sensitivity – Sales promotion can persuade users to expect a lower price
in the future, and potentially damage ‘quality’. 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).

For Example, Changhong Ruba a legitimate Chinese electronics brand launched

in Pakistan has not been able to make its name until now due to their evergreen
never-ending sales promotions and low prices which have confused people into
thinking that maybe their products are of low quality.

 Decrease in Brand Loyalty – 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. Regular customer may
have some doubts about quality considerations due to excessive sales
promotions.
 For Example, Bonanza a well renowned apparel brand in Pakistan, faced this
back lash due to continuous sales promotion. Which made people question their
quality and thinking that maybe their products aren’t being sold, ultimately
resulting negatively in the sales.

 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).

For Example, Bata shoes along with their different promotion, give sales
promotions along with them. They collide with each other while confusing the
customers and restraining them from buying.

 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.

For Example, Pepsi has its own distribution network, one can see their
refrigerators in retailer shops. This is due to their low margin tradeoffs given to
resellers most of the wholesalers don’t find their products enough profitable to
buy.

 Short Term – The effect of sales promotion is immediate. There is rarely any
lasting to increase in sales when sales promotion discontinued sales become
immediately Low. Heavy use of sales promotion may cause quality image
dilution.

For Example, during Ramadan many brands like Dalda, Rooh Afzah, start their
sales promotions to increase sales. However, these are only restricted to this one
month, once it’s over their sales promotions will be of no use.

Great effort, enjoyed reading your examples.

Sarah Imran.