Designing a profitable sales promotion campaign is difficult, yet generally, sales promos make up big part of any company’s marketing budget.
You may think that even a poorly designed sales promo will lift your company’s gross revenues in the short-term, perhaps for a period of 2-3 months.
Having said that, a supposedly very well thought out, at least on paper, sales promotion can hurt your company’s both short- and long-term profitability, brand loyalty, and brand equity, as well as long-term overall gross revenues.
So, be careful with promotions; your company may have started its life as a differentiator but after so many promotions your company will become a commodity supplier that cannot command any price premium and dwindle, waging promotion and price wars.
I will briefly investigate and provide examples from my childhood heroes, namely Sega and Nintendo.