Price discounts or price-off deals

 

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Price deals are probably the most commonly used promotional techniques. A price deal for a customer means a reduction in the price of the promoted product and the consumer saves money on purchase.

Such a deal is designed to:

 

  • Stimulate customers to try a new product,
  • To encourage new users to try an existing product
  • To encourage customers to continue product patronage,
  • Increase purchase quantity,
  • Purchase multiple units and
  • Accelerate usage rate.

 

  • All Out mosquito coils have a bumper offer, 30 hi-power mats originally priced at Rs.45 are available at Rs.27 only.

Objective: To create brand preference.

It is very important to have sales promotions in the mosquito coils segment. This is because in mosquito coils there is hardly any product differentiation and so it becomes necessary to give the consumer a reason to buy. Hence sales promotions play an important role in increasing your product sales.

 

  • Colgate fresh energy ice blue gel (Colgate India) 50 gm pack, Rs. 5.50 off on normal price, now available at Rs. 12.50 only.

 

  • Lux soaps (HLL) 125gm pack, Rs.5 off.

Objective: To increase sales and to encourage new users.

 

  • Duracell plus, special offer a pack 2 batteries, Rs.20 off on MRP.

 

  • Bajaj started the scheme on 20th august 2001, where by if you buy a Bajaj Spirit two-wheeler you get Rs.3000/- off, valid only in Ahmedabad.

 

  • Aptech

On the complete ACCP 2002 course, save upto Rs.33,600/-

 

  • Woodland

On woodland shoes and apparels get upto 50% off.

 

Price discounts are communicated through POP advertising, window displays, sales people, advertising in newspapers, magazines and TV ads.

 

Determining the quantum of discount depends on the consumer’s price perceptions and may be difficult to decide.

 

Such promotions work very well in gaining the attention of consumers, particularly at the point of purchase among similar brands and may also encourage unplanned or impulse buying. If there are three different models of a product and because of the discount offered the price of the higher end model is appears, not too high to the consumer as compared to the lesser priced model, then the consumer may buy the higher end model.

Titan watches

Objective: make the high end product seen cheaper.

Branded watches are a high value product. Titan watches are expensive compared to many other branded watches available. Hence in case a sales promotion offer like some rupees off is available on the watch, the consumer finds the high priced high quality product cheaper and so buys that instead of the cheaper one.

 

The main advantage of this tool is that it has a very Strong consumer response

Such discounts offer immediate value and strong consumer response.

The Flexibility and convenience of implementation is another advantage. Price offers are extremely flexible in the sense that the producer has total control on the number of units being promoted and the market area in which the offer will be given. If different packs of the same brand are available, the marketer can choose the one size that is not selling well.

 

A discount offer may rapidly lose its advantage if competitors announce a similar offer. In fact, competitors are very likely to retaliate leading to the danger of triggering a promotion wall in which no one benefits except the consumer.

 

Such discounts are short term and are unlikely to produce any long-term gains because the incentive is to purchase now by creating sense of urgency. When the discount is withdrawn the sales may fall below the level of pre-promotion period.  And in the long run the sales would return to pre-promotion period level.

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