Question

Explain the importance of sales promotion. 

Answer 1

Sales promotion techniques are used to perform several functions and to achieve the following benefits.

1. Provides Information: Sales promotion tools help to inform the prospective buyers about the availability, features and uses of a product. Due to the diversity of the market, the need to spread information has increased. Sales promotion provides support to marketing efforts.
2. Stimulates Demand: Sales promotion activities help to create interest in new products and increase demand. It is a persuasive tool.
3. Creates Product Identity: In sales promotion literature, a firm can explain how its product is better than competitive brands. It can differentiate its products and create brand preference among consumers.
4. Meets Competition: By offering various types of incentives, a firm can maintain its sales volume in the face of cutthroat competition. The stock of existing variety/quality can be sold before introducing the new one.
5. Satisfies Customers: A large number of customers seek a greater quantity at a given price. Sales premiums and other incentives help to satisfy these customers. Sales promotion devices are the only promotional tools at the point of purchase. These devices help to remove customer dissatisfaction with a product.
6. Permits Control: Sales promotion permits the firm to keep an effective check on the results achieved. The management can analyse and compare the costs incurred and the benefits obtained through sales promotion.