Cost Of Sales Promotions example essay topic
328 words
The biggest advantage of sales promotions are that, if they are done correctly, they can stimulate and increase consumer purchases and develop or improve retailer or middlemen efforts to stock and sell a product. A sales promotion can be coupons, gifts, samples, in-store promotions, contests or sponsorship of special events (sporting events, fairs, etc.) In markets where consumers may be hard to reach through regular advertising channels, a sales promotion is necessary and very effective. Sales promotions are generally seen as fun and can have long-lasting i favorable mpressions on consumers. In addition, another advantage is that sales promotion activities may be narrowly targeted to consumers and / or offered for only a short time before being dropped or replaced with more permanent efforts. This flexible nature of sales promotions makes them ideal for a marketing campaign tailored to fit local customs and circumstances. For example, Philip Morris, British American Tobacco, & R.J. Reynolds competed in the Taiwanese market by handing out free cigarettes, a practice not utilized in the U.S. market.
Both Philip Morris and R.J. Reynolds built market share by offering Korean consumers free cigarette lighters and desk diaries with the firms' logos in return for cigarette purchases. One of the disadvantages is that the success of a sales promotion may depend on local adaptation. Since cultures have an impact on any type of advertising / promotion, marketers must ensure that the type of sales promotion they have selected for a particular country is not a prohibited activity. Since some local laws do not permit free gifts, coupons, premiums or discounts, marketers must thoroughly research the countries before undertaking sales promotions.
Another disadvantage may be the cost of sales promotions. The up-front costs may be high; however successful sales promotions can reap rewards many times over in the long run. Companies just need to be able to make the investment in the up-front costs.
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