247EBook Lecture: The Effect Of Promotion On Demand, Price And Consumer

Effect of sales promotion on demand:

Sales promotion makes a good impact on demand for goods and services. The only way that a firm can obtain a more total revenue is to charge a higher price for each unit of its outputs. By pointing out the advantaged of the product or enhancing its image in a way that its of value to some consumers, sales promotion is worth the price charged.
Some products are more sensitive to increased sales promotion than others. That is, more demand can be stimulated for some products than for others. This situation involves the concept of expansibility of demand which exist when the use of sales promotion will bring about an increase in the total demand for a product.

Effect of sales promotion on profit:

Where sales promotion differs from the belief on norms of consumers, it would naturally not achieve its aim, such sales promotion is wasteful, profits may be overlooked in the short-run to obtain other worth while objectives, such as market penetration nevertheless, further profits are paramount in the manager's thinking plannings, sales promotion may affect the profit performance of a business firm.

Consumers - stimulation to demand:

Sales promotion surely makes the consumer to buy a product. Some management members of Cadbury Nigeria Plc where my case study was, believed that sometimes consumers depend on sales promotional tools before purchasing a product, lies on where the product is new in the market and where substituted and competitors exist.
Moreover, where a consumer has natural likeness for a product, it would be a surprise seeing such a consumer to depending on sales promotion tool. In the above aspect, consumers rely on the three channels mentioned below, which are follows:- Personnel, expert ans social channels.
Consumers that do not purchase, get their information through the personnel who are also advocate.
In second aspect which is the expert channels, they are made up of experts who write on their experience or knowledge on the use of such products on a newspaper page or talk on them over the radio or television.
Lastly, is the third channel, which is known as social channels which consists of opinion leaders, reference groups, neighbour or peers.


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