Short-term incentives can spur immediate purchases. Sales promotion is the set of those incentives—coupons, discounts, contests, free samples, loyalty rewards, and trade allowances. Unlike advertising, which builds longer-term brand preference, sales promotion aims to produce a quick behavioral response.

Consumer promotions target the end buyer; trade promotions target retailers and distributors. Both can increase volume in the short run. The risks include training customers to wait for discounts, eroding brand equity, and simply pulling sales forward rather than creating incremental demand. Measurement of true incremental lift is therefore important.

Sales promotion is most effective when it is coordinated with the rest of the marketing mix and when the offer is relevant to the target audience. Used sparingly and creatively it can clear inventory, encourage trial, or reward loyalty. Used constantly it can become an expensive habit that weakens pricing power.