The elasticity of sales to sales promotion is _________ that of advertising.
|A. Less than|
B. Equal to
C. Greater than
D. Inversely proportional to
The Correct Answer Is:
- C. Greater than
The correct answer is C. Greater than. The elasticity of sales to sales promotion is greater than that of advertising. Elasticity, in the context of economics and marketing, measures the responsiveness of one variable (in this case, sales) to changes in another variable (sales promotion or advertising).
A higher elasticity value indicates that sales are more responsive to changes in the promotional efforts, making the impact of sales promotion greater than that of advertising. Let’s explore why option C is correct and why the other options are not suitable:
C. Greater than:
When the elasticity of sales to sales promotion is greater than that of advertising, it means that changes in sales promotion have a more pronounced effect on sales compared to changes in advertising.
In other words, consumers are more responsive to sales promotions, such as discounts, special offers, or incentives, when making purchase decisions. These promotions lead to a more significant increase in sales volume than equivalent changes in advertising spending.
This phenomenon can be explained by the immediate and tangible benefits consumers perceive in sales promotions. Sales promotions typically offer consumers a direct financial incentive, such as a lower price or a free item, which can drive an immediate increase in demand.
As a result, the elasticity of sales in response to sales promotion is often higher because consumers are more likely to adjust their buying behavior in response to these promotions.
Now, let’s discuss why the other options are not correct:
A. Less than:
If the elasticity of sales to sales promotion is less than that of advertising, it would imply that sales promotions have a weaker impact on sales compared to advertising efforts. In this scenario, consumers are less responsive to sales promotions, and changes in advertising spending have a more substantial effect on sales.
This outcome would be counterintuitive because, in practice, sales promotions are typically designed to yield more immediate and pronounced results compared to advertising. Therefore, this option is not accurate.
B. Equal to:
If the elasticity of sales to sales promotion is equal to that of advertising, it would suggest that both promotional efforts and advertising have an identical impact on sales. While advertising and promotions can both influence consumer behavior, they serve different purposes and are typically expected to have distinct effects on sales.
This is why they are allocated different budgets and strategies within marketing plans. Hence, this option does not accurately represent the typical relationship between sales promotion and advertising.
D. Inversely proportional to:
Saying that the elasticity of sales to sales promotion is inversely proportional to that of advertising implies that as one increases, the other decreases. This would suggest an inverse relationship between the effects of sales promotion and advertising on sales, but this oversimplification does not accurately reflect the real-world dynamics of marketing.
Sales promotion and advertising efforts often work in conjunction, complementing each other to drive sales. Therefore, this option is not a suitable representation of the relationship between sales promotion and advertising.
In summary, the correct answer is C. Greater than because it accurately represents the typical scenario in which the elasticity of sales to sales promotion is more significant than that of advertising.
Sales promotions, with their immediate and tangible incentives, often lead to a more pronounced increase in sales compared to advertising efforts, making consumers more responsive to these promotions.
This phenomenon is an essential consideration in marketing strategy and budget allocation, as it helps companies understand the relative impact of different marketing tactics on their sales.