Promotional Pricing: Sales Promotion

As we noted in the Sales Promotion Tutorial, marketers may offer several types of pricing promotions to simulate demand. As we noted in Chapter 14, marketers may offer several types of pricing promotions to simulate demand. While we have already discussed “on-sale” pricing as a technique to build customer interest, there are other sales promotions that are designed to lower price. These include rebates, coupons, trade-in, and loyalty programs. To manage these promotions, marketers often utilize campaign management software that incorporates customer identification and tracking to determine the best opportunities for offering special promotions.

For online retailers, identifying and tracking customers may be relatively easy if customers have previously purchased and their login information is retained by their web browser or on the retailer’s mobile app. In situations where customers are not easily identified, a retailer may place a small data file, called a cookie, or other device identifiers on a visitor’s computer or mobile device. These identifiers enable retailers to monitor users’ behavior, such as how often they visit, how much time they spend on the site, what information they access, and much more. For example, the marketer may offer a special promotion if a visitor has come to the site at least five times in the last six months but has never made a purchase.

At brick-and-mortar retail stores, campaign management software is also used to offer customers price reductions or other incentives. For example, a sales promotion may be triggered when customers use a store loyalty card. If a customer’s characteristics match requirements in the software program, they may be offered a special incentive, such as 10 percent off if they also purchase another product.

Promotional Pricing: Loss Leader
Promotional Pricing: Bundling Pricing