Promotional Pricing: Markdowns

The most common method for stimulating customer interest using price is the promotional markdown method, which offers the product at a price that is lower than the product’s normal selling price. There are several types of markdowns including:

  • Temporary Markdown – Possibly the most familiar pricing method marketers use to generate sales is to offer a temporary markdown or "sale" pricing. These markdowns are normally for a specified period of time the conclusion of which will result in the product being raised back to the normal selling price.
  • Permanent Markdown – Unlike the temporary markdown where the price will eventually be raised back to a higher price, the permanent markdown is intended to move the product out of inventory. This type of markdown is used to remove old products that: are perishable and close to being out of date (e.g., donuts); are an older model and must be sold to make room for new models; or are products that the marketer no longer wishes to sell.
  • Seasonal – Products that are primarily sold during a particular time of the year, such as clothing, gardening products, sporting goods and holiday-specific items, may see price reductions at the conclusion of its prime selling season.

0 Comments

Add Comment

 

KnowThis: Marketing Basics Book

396 pages - Only $25

KnowThis: Marketing Basics Book Our first book offers in-depth coverage of marketing and is ideal for the marketing novice, the marketing educator, the marketing professional and anyone else who needs to know about marketing. This book includes more than 50% new material not found on KnowThis.com. For more information including taking a look inside, Click Here.

Samples of Marketing Tutorials

Importance of Internet Strategy: Part 2
Extreme Target Marketing The most efficient way for marketers to spend money is to direct spending to those who are most likely to be interested in what the marketer is offering. Unfortunately, efforts to target only customers who have the highest probably of buying has not been easy. For instance, consider how much money is wasted on televis…

Read more...