Trade-In Promotions and Promotional Pricing

Trade-In Promotions

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 smartphones, where the customer’s exchanged product can be resold by the marketer in order to extract value.

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: Part 2 Tutorial, promotional pricing is also considered within the framework of price setting. More on of this promotional method is provided in that discussion.

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