Promotional Pricing

Promotional Pricing

Introduction:

Promotional pricing is a short-term pricing strategy employed by businesses to stimulate sales and attract customers for a specific period. This strategy involves temporarily reducing prices through various means, such as discounts, special offers, or the distribution of vouchers or coupons.

Key Points

• Temporary Price Reduction: Promotional pricing is characterised by the temporary lowering of prices for a defined period. Businesses use this strategy to create a sense of urgency and encourage customers to make purchases during the promotion.

• Sales Stimulus: The primary goal of promotional pricing is to boost sales, particularly during specific seasons or events. It can attract customers who are looking for bargains or value for money.

• Media Attention: Promotional pricing often generates media interest and publicity, further increasing its effectiveness in attracting customers. For example, Black Friday and Cyber Monday sales garner significant media coverage.

• Clearing Old Stock: Businesses frequently use promotional pricing to clear old or obsolete stock, preventing it from occupying valuable storage space. For instance, January sales are common for retailers to sell leftover holiday inventory.

Example

In summary, promotional pricing is a short-term strategy that involves temporarily lowering prices to stimulate sales and attract customers. It is often used during specific events or seasons and can generate media interest. This approach is effective for clearing old stock and driving customer engagement during promotions.