What Are the Advantages and Disadvantages of Sales Promotions?

advantages-disadvantages-sales-promotions Credit: Dan Kitwood / Staff/Getty Images News/Getty Images

Sales promotions may help businesses gain exposure, clear out old inventory and boost revenue, but they are not ideal for attracting new customers. Sales promotions are most valuable to small businesses and can help businesses develop key relationships with local consumers and business allies. However, sales promotions may only drive sales in short bursts, leaving companies with an effective short-term growth plan but no sound marketing solution for the long haul.

Sales are difficult to predict: they vary from year to year and even from product to product. Companies that earn revenue primarily from selling market goods and materials, such as clothing, shoes and other retail items, often experience slow and stagnant sales periods. Adding sales promotions to the mix may boost sales during slow times: promotions can give companies a way to achieve more predictable sales volumes year round. During slow periods, having promotions can help to get rid of old and outdated inventory and makes it easier for managers to have consistent monthly budgets. However, promotions will not eradicate underlying issues of bad products and poor marketing strategies and are often only short-term solutions for business growth.