It is typical to promote products every now through occasions such as Stock Clearance, New Arrivals, and special discounts. Promotions are lucrative as Brands generate more revenue in the short run due to increased sales volume. These short-term sales figures seem attractive. The lack of proper insights cause companies to lose money by promoting their products and how successful companies deal with this problem. In this article, we will unfold the best way to promote products of your own.
Why do Businesses Spend Big Bucks to Promote Products
Promotion is a way of interaction between the buyer and the seller where the latter tries to persuade the buyer to purchase their products. It increases the awareness of a product, service or Brand. It also enhances the public image of a company. This method of marketing creates interest in the minds of buyers and generates a dedicated user base. The following are the objectives that a Brand wants to fulfill through Product promotion:
- To provide information about the availability of the features and uses of the product to the prospective buyers.
- To stimulate the demand for a product by creating awareness and interest among the customers.
- To differentiate the product from the competitor’s product by creating brand loyalty.
- To stabilize sales by highlighting the importance and features of the product.
Product Promotion can be Informative, Persuasive, Reminder, Buyer Behavior Modifications. Sales promotion majorly includes Advertising, Personal Selling, and Sales Promotion.
How Can Product Promotions Go Wrong
Product promotions always do not prove beneficial especially when it is not done the correct way. The following are the reasons for unsuccessful Product Promotion:
- Your target audience might not be optimized
- Your product pricing may not be optimized based on current market trends
- You may not have analyzed the market demand data well, and your product may be less in demand than you anticipated
- Your ads might not have updated inventory data, and you might be running Ads of products that are actually out of stock
- Your competitors might have come up with a better product.
- Your logistic partners might not deliver to the geographical locations in which you are running your ads
- You might be running ads on the wrong platform, and an alternative platform might have yielded better ROIs
- You may be spending more money on a product that is not getting traction and spending less on the one which is.
- You might have missed out on a lot of hidden costs while calculating your ad budget and as a result might end up having negative ROIs from your promotions.
The hidden costs involved in Product promotions can be listed as:
- After-sales service costs
- Installation cost
- Extended warranty costs
- Logistics charges like Express Shipping
- Product return charges
- Discounts and cashback offered
- EMI charges involved
- Payment Gateway charges involved
Challenges that Companies face to Promote Products
Companies usually use a lot of apps and tools to automate, optimize and manage their various processes like using inventory management apps like Olabi, Vinculum, Unicommerce, CRMs like Salesforce, Zoho, Leadsquared, Online advertising platforms like Google Ads, Facebook, Twitter, Linkedin Ads, e-commerce platforms like Shopify, Magento, Woocommerce, Amazon, Flipkart, payment gateways like Razorpay, PayU, Chat Interfaces like Zendesk, Tawk.to, cloud telephony services like Exotel, Knowlarity to name a few.
Now separate sheets need to be downloaded from all these different sources from which detailed reports need to be created. So all of the inventory data, customer feedback, customer behavior data, and payment gateway data need to be appropriately analyzed to develop a consolidated picture based on which product promotion campaigns need to be optimized. This process takes a lot of time and manpower to execute manually and most of the time, leaving room for improvement. Moreover, the time lag involved from data mining to data analysis costs a lot of money as the promotional activities keep on running the entire time.
How Daton Helps Brands to employ the Best Way to Promote Products
Daton is an automated data pipeline that easily integrates with various sources a company may use. It can automatically store data into a data warehouse without the need for any coding, enabling the creation of reports in a quick time that can be easily analyzed to optimize the product promotional campaigns to maximize ROIs from them.
Brands cannot survive in the market without having a good outreach. Without Product Promotions, they cannot inform customers about the unique benefits of their products and lose out to other market players.
Click Here to get a free trial of Daton and learn more ways in which Daton can prevent you from bleeding out the money in product promotions developed by Saras Analytics which is Unified Data Platform for Global Commerce
- What is product promotion, and why do businesses spend money on it?Product promotion is a way for businesses to interact with potential customers and persuade them to purchase their products. The objective of product promotion is to increase awareness of a product, stimulate demand, differentiate the product from their competitors, and stabilize sales by highlighting product features. Businesses spend money on product promotion to generate more revenue in the short run due to increased sales volume.
- What are the reasons for unsuccessful product promotion?Product promotion may not prove beneficial if it is not done the correct way. Unsuccessful product promotion can occur due to several reasons, such as incorrect targeting, pricing, demand analysis, outdated inventory data, stronger competition, logistical limitations, wrong advertising platforms, insufficient budget allocation, and hidden costs such as after-sales service and product returns.
- What are the hidden costs involved in product promotions?The hidden costs involved in product promotions include after-sales service costs, installation costs, extended warranty costs, logistics charges such as express shipping, product return charges, discounts and cashback offered, EMI charges involved, and payment gateway charges involved.
- What challenges do companies face in promoting products?Companies face challenges in promoting products, such as the need to integrate multiple apps and tools, download separate sheets from different sources, analyze data from various channels, and develop a consolidated picture to optimize product promotion campaigns. The manual execution of these processes takes a lot of time and manpower, leading to a time lag and increased promotional costs.
- How can Daton help brands employ the best way to promote products?Daton is an automated data pipeline. It simply integrates with different sources a company may be using. It can automatically store data in a data warehouse without the need for any coding. This enables reports to be formulated quickly and they can be analyzed at once to enhance the product promotional campaigns to exploit ROIs from them. Daton helps brands prevent losses in product promotions by providing insights into customer behavior, inventory data, and payment gateway data, enabling informed decision-making to optimize promotional campaigns.
