READ CAREFULLY AND ANSWER THE QUESTION AT THE END: You have read that sales prom
ID: 338367 • Letter: R
Question
READ CAREFULLY AND ANSWER THE QUESTION AT THE END:
You have read that sales promotions (i.e., short term incentives) are an effective way to increase sales/revenues.
Tom, an employee at a retail store noticed that, when certain products/brands are put “on sale”, many customers who patronize that store buy more than usual and “stock up”. As a result, immediately after the sale period, these customers do not buy as much of the product/brand. Tom approaches the store manager, Mr. Edwards, questioning the logic of offering sales promotions. Tom complains that “The increase in sales during the period in which the product is on sale is probably cancelled by the dip in sales in the following period.” Further, he argues that “In the long run, all of these positives and negatives cancel out – and there is no net long term effect of the sales promotion! So why do we offer them?”
Do you agree with Tom’s argument? If you were Mr. Edwards, how would you defend your decision to offer sales promotions? Please explain/justify clearly any opinion you may have (300 words or less)
Explanation / Answer
READ CAREFULLY AND ANSWER THE QUESTION AT THE END:
You have read that sales promotions (i.e., short term incentives) are an effective way to increase sales/revenues.
Tom, an employee at a retail store noticed that, when certain products/brands are put “on sale”, many customers who patronize that store buy more than usual and “stock up”. As a result, immediately after the sale period, these customers do not buy as much of the product/brand. Tom approaches the store manager, Mr. Edwards, questioning the logic of offering sales promotions. Tom complains that “The increase in sales during the period in which the product is on sale is probably cancelled by the dip in sales in the following period.” Further, he argues that “In the long run, all of these positives and negatives cancel out – and there is no net long term effect of the sales promotion! So why do we offer them?”
Do you agree with Tom’s argument? If you were Mr. Edwards, how would you defend your decision to offer sales promotions? Please explain/justify clearly any opinion you may have (300 words or less)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.