Your business is new, not many people know it yet. The product or service is really good, but how do you tell the masses about it? Organizations big or small all rely on marketing strategies for product and services promotions to get a word about their brand out in the market. That’s how people come to know about new products and services and their benefits. As a result, companies pour in millions of dollars in marketing strategies for product and services promotions hoping it will yield them an increment in the sales figure. Sometimes, it works, and sometimes, it just doesn’t, sending all the hard-earned millions down the drain. One should be wary of the pitfalls and disadvantages of these marketing strategies for product and services promotions to survive and grow in the market.
The cost to quality perception
How often do we see an item on sale or its price chopped off significantly? Pretty often. Companies hope to increase their sales volume by lowering the cost, thinking the simple demand-supply equilibrium will fetch them extra dollars. But often it so happens that a consumer sees it as a sign for reduced product quality. For instance, supermarkets often mark down the price of a product when they are about to expire. So a consumer will think twice before buying a marked down product.
Customers get habituated to promotions
One of the major disadvantages of marketing strategies for product and services promotions is that over time, consumers will get habituated to it. For instance, if a consumer knows that a certain store always offers 50% discount, then the consumer would be unwilling to buy when stores sell products in MRSP. They will even be hesitant to buy undiscounted products in the future as they already set the base price they are willing to pay for that product.
Dubious long-term success
Apple products barely go on discount. If your store were to sell Apple products with 30% discount, then there will a long queue of customers waiting to buy the product from you. It boosts your sales; however, you might not gain much in profits. A pressing question to ask here would be, will the customers come back to make a purchase if the offer was reverted? They will either go the Apple store or go to another retailer who may offer some discount. As a result, the long-term success of marketing strategies for product and services promotions seems dubious.
It is only natural for the demand to go up when the price is brought down by promotions. Sometimes though, such a growth in demand could go out of control. Suddenly, customers who weren’t even interested in the brand would jump on the opportunity to buy the product. Customers who actually were thinking on the purchase may miss out on this opportunity and the company may thus alienate loyal customers. Running out of inventory causes trust issues and negatively impacts the brand.
When you come up with marketing strategies for product and services promotions, your competitors won’t stay quiet either. They would most likely respond to a price drop with higher price drops. This, in turn, leads the company into a downward spiral for price reduction which affects the profit margin over the long-term.
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