- Written By: Felicia Dye
- Edited By: Heather Bailey
- Last Modified Date: 15 May 2012
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Copyright Protected:
2003-2012 Conjecture Corporation
Promotional pricing is a sales and marketing technique. It involves reducing the price of a product or service to attract customers. This technique can be effectively used across numerous industries including food services, cosmetics, and household cleaning supplies.
Promotional pricing often involves reducing prices to unsustainably low levels. In some cases, products and services may be sold at or below cost. A buy one get one free scheme may even be used. When this is done, interest in goods can be greatly increased, meaning sales are also likely to increase dramatically.
This technique may be used by retailers or by producers. When it is used by retailers, the goal is generally to attract attention to the business and to attract regular customers. When the technique is used by producers, the goal is generally to attract customers to a product or brand and to encourage brand loyalty.
For example, a clothing store may offer clothing at prices that are below the manufacturer’s suggested retail price. Shoppers, attracted by the low prices, are likely to remember that store and visit again when they have apparel needs. A cosmetic company may offer two compacts of eye shadow for the price of one. When women need eye shadow again, it is hoped they will be motivated to buy that brand again.
What customers are likely to find when they return for a future purchase is that the prices of these goods have increased. Promotional pricing is usually temporary. This means that in most cases, quality and experience need to complement this pricing strategy. If it does not, and customers do not feel there is anything significant about the product or service, it can be very difficult to get them to purchase it at higher prices.
There are other reasons the use of promotional pricing must be used wisely. If it is not, it can amount to a company losing a great deal of money without the expected return. If the technique is used too often, for example, consumers may anticipate the price lowering and refuse to buy goods at the normal price.
Promotional pricing is also likely to attract some customers who are more concerned about the price than the product or service. When the product or service is needed again, these people are not likely to be motivated by past experiences. They may buy any similar goods that are cheaper.
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suntan12
Post 4 |
I sometimes watch those infomercials and after a while I do feel like buying the product. I love the buy one get one free specials that they offer at the grocery stores.
These price promotions might be offered at a below cost value like many of the initial specials during the Black Friday Christmas shopping season.
Retailers use this strategy to take a financial hit on the discounted items that are sold below cost, in order to obtain the necessary traffic to make up the difference and gain additional revenue.
Sometimes a store will offer a price promotion that reads buy one gets the next one at 50% off. Payless Shoe Stores does that a lot, but if you really think about it that means that you are only getting a 25% discount which really does not seem that exciting.
The problem is when we see the 50% off we pay more attention even though that it is off the second product.
Retailers use these promotions and play on words and numbers to get you excited about the sale. Price promotions almost always include while supplies last to create a sense of urgency for the consumer. |
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oasis11
Post 3 |
Sunny27-I love promotion marketing because you sometimes get to try new products that you would normally never know about with those free cosmetic gifts.
I know that sometimes marketing branding is important especially if you are a relatively new business.
Creating an image in the potential consumers mind is important. Infomercials are a great way for consumers to learn about your brand in a direct format.
Usually there is a product price promotion that will offer the product at a discounted price and then if the consumer orders immediately then an additional bonus would cause the consumer to think that the product was offered at a good value. This raises the chance of the consumer purchasing the product.
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Sunny27
Post 2 |
Anon83213-Promotional marketing helps to bring in additional consumers.
Cosmetic companies often have their gift with purchase promotion several times a year.
Here the cosmetic companies offer a cosmetic bag full of samples with a full size lipstick with a qualifying purchase.
Consumers often purchase in excess of the minimum offering a huge profit for the cosmetic companies. They also have a staff of makeup artists to help customers pick appropriate make up selections.
In addition, companies also offer a purchase with purchase product price promotions in which the consumer is offered a makeup bag full of products for a sale price as long as they make the minimum qualifying purchase.
This is different than the gift with purchase price consumer sales promotion because the consumer actual has to purchase the sale or reduced price gift and does not get it free.
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anon83213
Post 1 |
Wisegeek has all the answers i need. a big thanks to wisegeek. |
