It helps in trial, stock clearance, and festival sales.
It can attract new customers and re-activate inactive buyers.
However, it should be used wisely to avoid price dependency.
Good promotions increase footfall and conversion quickly.
High Complexity (Analysis & Scenario-Based)
Q6. Two similar products are in the market: one is a strong brand at a higher price, and the other is a generic at a lower price. Analyse which one might sell more and why.
Answer:
A strong brand may sell more due to trust, quality perception, and status.
It often offers warranty, service, and consistent performance.
Risk-averse buyers prefer reliability and are ready to pay more.
The generic may win among price-sensitive customers who want value.
If the price gap is large, the generic can capture volume.
Final outcome depends on income levels, usage needs, and reviews.
Promotions and availability also influence the decision.
Q7. A local bakery runs a “Buy One, Get One Free” offer for a week. Evaluate the short-term and long-term effects on sales, image, and loyalty.
Answer:
Short term: footfall rises and more people try new items.
Sales volume increases, and old stock may get cleared.
It creates buzz and improves visibility in the locality.
Long term: if repeated too often, it may hurt perceived quality.
Customers might wait for offers, reducing regular margins.
For loyalty, pair offers with great taste and service to keep buyers.
Track daily sales, repeat visits, and feedback to judge success.
Q8. A news channel praises a new eco-friendly product. Explain how this non-paid publicity can be leveraged better than paid ads.
Answer:
Publicity is non-paid and often seen as more credible than ads.
Positive coverage boosts reputation and awareness at low cost.
The firm should share the news on social media and its website.
Use the mention in in-store displays and packaging for proof.
Prepare for a demand surge by managing stock and service.
Combine with gentle advertising to remind and educate buyers.
This mix builds trust and drives sustained demand.
Q9. A fashion brand changes its logo and brand mark frequently. Analyse the impact on recognition and suggest a better strategy.
Answer:
Frequent changes reduce recognition and recall among buyers.
Shoppers may get confused and miss the brand on shelves.
It weakens loyalty and wastes promotion done earlier.
Costs rise for packaging, signage, and communication updates.
A better strategy is a consistent core with minor, gradual refreshes.
Keep familiar colors and shapes to maintain identity.
Plan changes with clear reasons and strong customer communication.
Q10. During a festival, a smartphone brand plans a price cut plus free earphones. Analyse the combined effect of pricing and sales promotion, and the risks involved.
Answer:
Price cuts increase demand by improving affordability.
Free earphones add value and attract switchers from rivals.
The combo boosts traffic, trials, and market share quickly.
Risks: price wars, lower margins, and trained buyers who wait for deals.
It may harm brand image if overused or too deep.
Use limited-time offers, clear terms, and focus on bundles over heavy cuts.
Track sales, profit per unit, and post-festival returns to refine strategy.
