Marketing Research

Week VII Assessment Question 12

Several factors that account for the rapid growth of sales promotion accounts in companies are “promotion became more accepted by top management as an effective sales tool, the number of brands increased, competitors used promotions frequently, many brands were seen as similar, consumers became more price oriented, the trade demanded more deals from manufacturers, and advertising efficiency declined” (Kotler & Keller, 2009). The major down fall associated with sales promotion programs include, “incessant prices off, coupons, deals, and premiums that may devalue the product in buyers’ minds” (Kotler & Keller, 2009). Knowing this, marketers must use caution when placing products on sale. The text book uses the example of automobile companies utilizing 0% loans and cash back incentives to spur sales during a weak economy but the down side is that in a strong economy when automobile dealers do not want to offer such promotions are stuck with still having to offer them as consumers now expect them.

What makes a sales promotion a better marketing tool than advertising is with advertising you have a harder time measuring how effective the advertising campaign really is. With sales promotions you can measure effectiveness by many different ways such as coupons, rebate offers, product warranties and frequency programs to name but a few. When a company knows how many rebate offers were issued they can measure the effectiveness when the rebate offer is redeemed. I know from personal experience Verizon Wireless is an excellent example of rebate offers. This information lets Verizon know who their customers are, what kinds of products and services the customer is interested in, and what the customers spending habits are related to wireless devices. An advertising campaign may or may not realize much of the hard data retrieved from the simple rebate offer on the latest technology cell phone.

With increased competition...