Sales Promotion

Promotional Pricing

One of the most powerful sales promotion techniques is the short-term price reduction or, as known in some areas, “on sale” pricing. Lowering a product’s selling price can have an immediate impact on demand, though marketers must exercise caution since the frequent use of this technique can lead customers to anticipate the reduction and, consequently, withhold purchase until the price reduction occurs again.

As we will see in the Setting Price Tutorial, promotional pricing is also considered within the framework of the Price marketing mix component.  More on of this technique is provided in that discussion.

Trade-In

Trade-in promotions allow consumers to obtain lower prices by exchanging something the customer possess, such as an older product that the new purchase will replace.  While the idea of gaining price breaks for trading in another product is most frequently seen with automobile sales, such promotions are used in other industries, such as computers and golf equipment, where the customer’s exchanged product can be resold by the marketer in order to extract value.