A common marketing strategy for big companies is to introduce various offers and discounts. However, these strategies may have an impact on their reputation. What are some of the impacts? Support your views with examples.
PTE = 20 minutes; 200 to 300 words.
IELTS = 40 minutes; 250 words at least.
Let me present an essay with a clear structure:
Corporate houses have huge marketing budgets that are spent on numerous media in offering discounts and deals to attract customers. Though the purpose of such promotions is to familiarize the customers with products, they have certain drawbacks.
Body Paragraph 1: (Two shortcomings – inferior and bad precedent)
Researchers have proven that customers usually perceive heavily discounted products as inferior or non-authentic. They often value a product based on its price. Consequently, the targeted customers do not purchase these products. Moreover, this sets a bad precedent for a business’s future customers. It sets a habit among customers to wait for the next round of discounts.
Body Paragraph 2: (Profit)
Managers often focus on a company’s revenue rather than its profit. In a rat race to increase revenue much more than competitors and to satisfy stock market’s expectations, managers offer a discount. Unfortunately, this practice compromises the most important thing in business – profit. For instance, Indian largest online retailer Flipkart has grown by leaps and bounds by offering heavy discounts during the past decade. However, the company has never reported a profit.
Body Paragraph 3: (Benefits)
On the flip side, offering deals to customers on various platforms such as Amazon and Groupon helps companies not only in selling their existing stock but also attracting new customers. Moreover, this is a suitable strategy when a company is in recession, and it wants to improve cash flow by reducing inventory.
In conclusion, while there are a couple of benefits of discounts and deals, they adversely affect companies in several ways and end up reducing the sales. Instead of offering discounts, corporate players should focus on promoting their product’s value.
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