Sales promotions are vital for companies to increase sales and protect their brand names. While sales promotion is an influential and effectual technique to produce instant short term optimistic results, it is not a cure for a bad product or bad advertising. Sales promotion has its own advantages and disadvantages. When sales promotion overdoses, the emotion or the need that surrounds them disappears. In fact, promotion is speeding up the killing of a bad product.
Disadvantages or Limitations of Sales Promotion
- Reflects Crisis
If a firm frequently relies on sales promotion, it may give the impression that it is unable to manage its sales or that there are no takers of its product.
As with the majority of sales promotions, either the dealer or the business that offers the product do not benefit as much like before. Sales promotion is a calculated risk, but it needs to be carefully planned and managed to be truly effective. Sales promotions should be advertised to let the customers know of the special offer.
- Can Lower Perception of the Brand
The overuse of some sales promotions may condition customers to believe the lower price is the usual price, which may cause them to not believe the product’s superiority compares to comparable competitors’ products that offer less frequent or no price reductions.
- Short-term orientation
Sales promotions are usually for a short duration. This gives a boost to sales for a short period. This short-term direction may sometimes have harmful effects on the long-term future of the organization. Promotions generally build short-term sales volume, which is hard to preserve.
- Price sensitivity
Sales promotions can be disadvantageous when they are offered quite regularly. The key to success with an effective sales promotion is its irregular supply, and when it is a surprise for the customer. Consumers wait for the promotion deals to be announced and then purchase the product. If it is done too often, it creates price sensitivity among customers. This is true even for brands where brand loyalty exists.
- Issues with Promotion Clutter
While in the same way an advertisement competes with other ads for customers’ concentration, promotional clutter may also be an issue with sales promotions (e.g., excessive promotion sent by email, postal mail).
- Spoils Product Image
Continuous use of sale promotion tools also affects the product image. If the promotions in a product category have been rare, the promotions could have a negative effect on its quality image. The customer may develop the impression that “products sold through sales promotion are overpriced & of poor quality etc.” The use of sales promotion tools may affect the image of a product. The buyers may start feeling that the product is not of good quality or is not appropriately priced.