Advertising vs Promotion

Advertising

• longer term effect on the brand
• long term strategy to build and protect the brand
  

Promotion

• greater impact on immediate sales figures
• move lots of volume, stimulate short-term sales
• quick fix to make the numbers
  

Advertising expenditure to sales promotion ratio (Prof. Shravan Rungta)-
US and Europe is 30: 70 (developed countries)
China and India is reverse 70: 30 (developing)

• It seems as the retailer’s power increases and competition becomes tougher, there is a shift toward higher sales promotion as companies are forced to focus on short-term gains rather than long-term profits.
• Promotions supposedly reward “loyal” buyers, but also encourage consumers to be “unfaithful” to other brands