1.

Is it axiomatic for market laggards to take recourse to sales promotions to improve market
share?

There are three key strategies that market laggards often use to regain market share once it has
been lost: pricing changes, promotional changes, and product changes. Sales promotions like
discounts help to lure customers away from the competitors. But this temporary benefit of higher
market share comes at a cost of lower margins per unit. If a market laggard is already in a cash-
crunch then investing heavily in a sales promotion would cause a further setback with no guarantee
on the success of the sales promotion. This strategy is more plausible for a market laggard that is
financially stable, like large companies that have higher economies of scale that allow them to
operate on either a lower marginal cost than their competitors that make it possible to operate at a
loss if needed.