Sales promotion is the process of persuading a potential customer to buy the product.
Sales promotion is designed to be used as a short-term tactic to boost sales – it is not really designed to build long-term customer loyalty.
Some sales promotions are aimed at consumers. Others are targeted at intermediaries (such as agents and wholesalers) or at the firm's sales force.
When undertaking a sales promotion, there are several factors that a business must take into account:
There are many methods of sales promotion, including:
Loyalty cards have recently become an important form of sales promotion. They encourage the customer to return to the retailer by giving them discounts based on the spending from a previous visit. Loyalty cards can offset the discounts they offer by making more sales and persuading the customer to come back. They also provide information about the shopping habits of customers – where do they shop, when and what do they buy? This is very valuable marketing research and can be used in the planning process for new and existing products.
The main advantages and disadvantages of sales promotion are:
Advantages of sales promotion:
Effective at achieving a quick boost to sales
Encourages customers to trial a product or switch brands
Disadvantages of sales promotion:
Sales effect may only be short-term
Customers may come to expect or anticipate further promotions
May damage brand image
Exemplar A grade worked answers to recent AQA GCSE Business Studies Unit 2 exam papers with examiner commentary on how to score top marks