PRICE PROMOTIONS

Price Promotions and Discounts Are Popular With Consumers and Can Also Be Highly Effective

Price Promotions and Discounts Are Popular With Consumers and Can Also Be Highly Effective

Introduction

This paper will discuss price promotions and strategies of price promotion. It will also discuss how Price promotions and discounts are popular with consumers and how they are highly effective. Also, this paper will answer questions pertaining to the effectiveness of using price promotions? In order to understand, the effectiveness of price promotions and discounts we will discuss these strategies in this paper.

Typical forms of product promotion can vary, depending on the level of market development and characteristics of the market. Thus, the traditional structure of the complex has the greatest advance practical significance for Russian companies operating in the consumer market. In the markets of developed countries allocate a separate element of the complex sales promotion direct marketing because of its growing importance, in retail. Merchandising ("atmosphere" of the store), in-store and on packaging, advertising in local sales and event marketing, cheers Reviews of satisfied buyers product, promotion, aimed at minorities, exhibitions, demonstrations, handing out gifts, service policies, development of trademarks, corporate identity and packaging (Walters, 1991, 18).

Price promotions and Discounts

It is almost safe to say that today the probability of finding a supermarket without daily price reductions in some of their products is almost zero. The economic rationale behind this action is clear: when the price decreases, the demand increases. There remains, however, the issue of whether the reductions in price are profitable (Walters, 1991, 17). In order to assess their effectiveness, it is necessary to understand the different impacts generated by the use of this promotional tool. This is far from a trivial job. Moreover, it is often the case in which the discounts are accompanied by other actions, such as advertising and displays at the point of sale. When this combination of tools is used to determine correctly the effectiveness of promotional price, becomes more complex. Some methodologies used to determine the impact of price promotion results may be useful to begin by mentioning the different potential impacts of promotional pricing.

Impact on sales as a result of price promotions

Price promotions can take many forms. The most familiar is obviously reduction. The reductions may be advertised as a percentage of the price regular or as absolute. The clothes are typical percentage, for example, the price of a sweater is reduced by 30 percent. While, the absolute practiced by example in supermarkets (the price of a brand of tequila is reduced from 119 to 99 dollars). This distinction may seem unnecessary at first glance, since both types of reductions are arithmetically equivalent. From this perspective, it is absolutely true. From the field of consumer behavior, apparently the two positions are not perfectly equivalent (Mulhern & Leone, 1991, 63).

Coupons are a second form of price promotion. The impact of such sales tool can be extremely different to that generated by a direct reduction in the price (equal to the value of the ...