Merits and Demerits of Sales Promotion
Sales Promotion (Merits and Demerits)
Sales promotion has proved as a powerful tool for increasing sales volume. In addition to this, it is used for variety of purposes. If sales promotional efforts are directed carefully and effectively, a company can have a lot of benefits.
It offers following comparative advantages (merits):
1. Low unit cost
2. Effective sales supports
3. Rapid product acceptance
4. Reduced sales fluctuation
5. Immediate response
6. Better control
7. High flexibility
8. Consumers, dealers and salesmen can be encouraged at a time
9. It is complementary to advertising and personal selling.
10. High suitability
Note that sales promotion is not always useful. It is like a double-edged sword. Company must practice it carefully and consciously. Manager should be aware of possible limitations (adverse impacts) of sales promotion. Improper and excessive sales promotional efforts have adverse impact on sales volume and image of company.
Demerits of sales promotion include:
1. It is not as creditable as advertising and personal selling.
2. It cannot be carried out without advertising and personal selling.
3. Effectiveness depends on active interest of dealers, middlemen, and salesmen.
4. Consumers believe that sales promotion is associated with defective or inferior products.
5. Price discounts and allowances are not real but illusory. Such incentives are offered only after the price-hike.
6. Sales promotional techniques have short life.
7. From social consideration, it is a deceptive device to increase sales volume. It is more beneficial to traders than consumers.
8. It is expensive to a company. Also, it is expensive to consumers as benefits are illusory.
9. Articles and things offered to consumers are useless and of poor quality. It spoils company images and affects sales volume adversely.
10. Misuse of articles and things is very common. Dealers and salesmen sell them and earn money.
11. Immediate and accurate feedback is difficult to be measured.