What are the perverse effects of the promotion?

There are many preserve effects of promotional and marketing strategies, some are expounded as follow:

First:  Marketing promotions might endanger short-term revenues of the business, although the goal is to improve long-term profits. For example, a promotional effort might convince people to try your product or service for the first time,  If they like what your business offers, they’ll keep coming back after the promotion ends. But even tried-and-true marketing and promotional strategies can backfire, so monitor each campaign carefully to minimize your risk.

Second: An obvious adverse effect  of a promotional strategy is its potential for failure. For example, you could invest time and money designing and advertising a sale, and sacrifice normal profits during the promotion, only to achieve moderate results. Worse, your long-term benefits might not offset the costs of the promotion. Careful research and expert advice from a marketing consultant can help maximize your chances for success, but nothing’s guaranteed.

Third: An obvious drawback to a promotional strategy is its potential for failure. For example, you could invest time and money designing and advertising a sale, and sacrifice normal profits during the promotion, only to achieve moderate results. Worse, your long-term benefits might not offset the costs of the promotion. Careful research and expert advice from a marketing consultant can help maximize your chances for success, but nothing’s guaranteed.

Fourth: If your promotions occur in a predictable pattern, potential customers might wait for a sale rather than buy the product or service at full price now. For example, if a retail clothing store offers a sizable discount on most holidays, sales will be low between holidays, and relatively few customers will ever pay full price.

Fifth: New customers might learn to love your product or service and become long-term clients. Or they might abandon you as soon as the promotion is over and continue to hunt for bargains. Converting bargain hunters to permanent customers depends on developing brand loyalty. For example, if your excellent customer service or high-quality products impress them, they are more likely to stay with you after prices return to normal levels.

Sixth: The benefit of using celebrities to endorse your brand is you can capitalize on the goodwill they elicit from the public. The disadvantage is your brand identity is vulnerable to their public relations problems. Research celebrities carefully to increase the chances their public images will always be worth your investment.

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i. Sales promotion cannot built brand loyalty or enhance brand image: There are disputes over the fact whether sales promotions have negative effect on brand equity and brand evaluation. The classic research done by Dobson, Tybout and Sternal (1978) argued that use of promotion decrease the brand evaluation. This was supported by self-perception theory – psychological model of response to sales promotion suggested by Sawyer and Dickson (1984).

However the further research on this issue (Neslin and Showmaker 1989; Scott Davis, J. Inman, L. McAllister 1992) shows the absence of the negative effect on the brand evaluations. It is actually suggested that with low involvement product category promotions might actually have positive influence on brand evaluation Scott Davis, J. Inman, L. McAllister 1992).

ii. Sales promotion cannot reverse a declining sales trend: According to research done probability of repurchase after purchasing on deal will vary according to the type of sales promotion and the cues that these promotion sent (Sawyer and Dickson 1984).

iii. Sales promotion cannot change basic consumer non-acceptance of the product

iv. Sales promotion cannot compensate for inadequate levels of consumer advertising.

v. Sales promotion cannot overcome product problems in pricing, packaging, quality or performance.

At the Trade end:

i. Sales promotion cannot compensate for a poorly trained sales force.

ii. Sales promotion cannot overcome poor product distribution.

iii. Sales promotion cannot compensate for a lack of consumer advertising.

Some other disadvantages of sales promotions are as follows:

i. Can cause problems with marketing intermediaries regarding issues like payment

ii. Malredemption of coupons by retailers, even when the consumer has not purchased the promoted product, can jeopardise the main objective

iii. Generally only short term in their effects

iv. Price discounting can have an adverse effect on the image of the brand and can have negative implications on brand preferences. It also reduces the consumer reference price, which may hamper long-term profitability of the firm

v. It is difficult to decide whether the price discount should be offered in percentage (of real price) terms or in absolute rupees terms. Under such circumstances, it becomes critical to understand how consumers evaluate promotions at different promotional benefit levels

vi. Short-term sales peak caused by sales promotions may be followed by a trough as the consumers go on using the stocks, over-purchased during the offer period

vii. Customers expect promotions all the time

viii. Moderately high probability of return of unsold stock from retailers and distributors at the end of promotion

ix. Ineffective promotion may cause the extra stock to stay too long on the shelves, so that they could be in poor condition at the time of purchase, leading to consumer dissatisfaction

x. Bring about a competitive response leading to more promotional activity

xi. Wholesalers and retailers do not always deliver their promises when given incentives such as extra discounts

xii. Difficulty in exciting consumers with clichéd promotional offers