Instead of a particular product or brand, the price discount is given on many products so as to get the customer to buy a variety of things from shop.
Retailers
The act of offering a lower price temporarily in orfer to enhance the effectiveness or product sales efforts to cost sensitive customers.
Price promotions
The rationale behind giving price discount.
Any loss experienced would be compensated
Why should care about price promotions as a marketers?
- Consumers love discounts
- Encourages cost-sensitive consumers to buy
- Help businesses meet sales goals
To make customers aware of a particular product line or services or a particular brand.
Manufacturers
Price promotion can improve profits by driving marginal sales from customers with a lower willingess to pay.
However excess price promotions can have a negative impact on profits, encouraging loyal customers to buy on price rather than value.
Managing vagueness
Where promotions no longer excite people.
Discount fatigue
(4) Key principles of price promotion design:
- Targeted
- Temporary
- Special
- Regular
Keep the timing unpredictable or unexpected so customers don’t wait for the next promo.
If customer can predict when the next promotion will happen, they delay their purchases and only buy when there’s a sale. This timing keeps them on their toes.
Irregular
REMEMBER THIS!
(4) Designing a winning price promotion:
- Target the right customers coz not all deserves a discount.
- Make it temporary so customer will buy now, not later.
- Ensures it feels special not just another sale.
- Keep it irregular so customers don’t wait for the next promo.
Not for everyone, only for specific customers.
A good price promotion should be targeted at a specific customer segment rather than given ro everyone. This prevents unnecessary profit loss from discounting for people who would have bought for a full price.
Targeted
Short term, not permanent.
A promotion should have a clear start end end date. If it lasts long, customers wait for discounts instead of buying at regular prices.
Temporary
Must feel exclusive and valuable.
The promotion should feel like a rare and exciting opportunity, not something routine. If customers see the same promo every month, it losses impact.
Special
What type of price promotion design is this?
Apple never discounts its iphone regularly. Instead, it partners with banks for random cashback offers, making promotions feels unpredictable but valuable.
Irregular (unexpected, not predictable)
What type of price promotion design is this?
Grab’s discounts codes are often personalized for users who haven’t booked a ride in a while, encouraging them to return without devaluing the service for regular users.
Targeted (not for everyone, only for specific customers)
What type of price promotion design is this?
Shoppe’s 11.11 and lazada’s 12.12 sales create urgency-people rush to buy because they know the discounts won’t last forever.
Temporary (short term, not permanent)
What type of price promotion design is this?
Starbuck’s “Buy 1 Get 1” on new drinks is positioned as a limited-time treat, making customer feel privileged to try something exclusive.
Special (must feel exclusive and valuable)
(4) Examinations of popular forms of price promotions:
- Coupons
- Trial offers
- Rebates
- Promotional bundles
Offers a discount on a future purchase, often requiring customers to take action.
Coupons
Free of heavily discounted product/service samples to encourage first time use.
Trial offers
Customer pay full price upfront but get a partial refund after proving their purchase.
It sound like discounts but requires customers to take extra step.
Rebate
Instead of discounting a single item, brands bundle products together at a lower total price, increasing the average order value.
Promotional bundles
(4) Psychological pricing strategies:
- Artificial time constraints
- Charm pricing
- Innumeracy
- Price appearance
Also a psychological game that influences how customers perceive value, urgency, and affordability.
Price
