Many modern products have been found thanks to the efforts of marketers. Advertising is a centuries-old experience, so it is difficult to give an exact date of appearance. However, it began to take shape in the late 19th century, due to marketing and the advent of production in most developed countries. An integral part of it is the pricing strategy, which includes discounts. These methods of increasing sales are mostly ancient and almost occurred with the advent of trade. A discount is the simplest advertisement for a product.
In Simple Words
A discount is a discount on a product, service, or price. It should normally be kept profitable or set to zero (minimize losses). It is used to stimulate demand and increase sales. Discounts are often reported in advertising supplies or grocery stores. In principle, it can be installed and cleaned several times a day, and in practice the price changes in both directions. Often, such discounts are used by grocery stores to stimulate demand at different times of the day or days of the week. From an accounting point of view, this will not affect management in any way. As a rule, not only the purchase price, but also the profits received are fixed. Typically, stocks that have fallen in price surround us everywhere (eg discounts in supermarkets or cafes).
Going deeper into marketing, you can distinguish different pricing strategies. The following are directly related to discounts:
- Sliding, Falling Prices – A gradual decline in the price of a commodity allows you to cover a large market share, earning additional revenue after making a major sale.
- Favorable prices in relation to competitors are a great way to discourage customers or attract new ones. You need to optimize your costs in such a way that the price is lower than that of other companies.
- Price Differentiation of Related Products – For example, a discount on toothbrushes is rewarded with expensive toothpaste, which is a great way to increase the price of related products and increase your base product to earn more.
Nevertheless, the most primitive but effective method is to price unreasonably high on the main price tag and use the word “discount” to make subsequent declines. This is very common in many department stores, consumer electronics stores and supermarkets. You can work in a small store, but it has a lot of traffic and gets a lot of customers.
percentage discount. In general, it may vary depending on the original price. No one is banning 1% and 99% cuts, which can get a lot of attention and come out with a good advertising campaign. However, it can scare consumers, so you have to do it wisely. The most common option is 10-25%, you can often find these discounts in supermarkets.
It’s generally not recommended to use percentage discounts. It makes it difficult for buyers to calculate prices and turns a trip to the store into solving a mathematical problem. And this is not much different with customers. In this case, it’s a good idea to at least take note of the differences the buyer will save.
price rounding. Numbers are especially important when it comes to discounts. Buyers respond better if the seller sets the exact price for the goods (for example, 793 rubles 35 kopecks, not 794 or 792). In the latter case, the amount is small. However, in the presence of more precise amounts, consumers have the feeling that sellers carefully analyze the costs and costs associated with the production or sale of goods.
Another way is 9. Effective in expensive products such as household appliances. If your TV costs 10,000 or more, it’s 9.999. At the same time, the purchase price is 7000, the initial price before the discount is 14000. Buyers perceive the first figure of cost more easily, there is a sense of economy, and goods go faster when the initial price is inflated.
Discounts on margins of profitability, zero, or even minus Why? These skids are a great way to empty a warehouse or shelf for other products. This happens often, especially in stores. For consumers, this is a great way to get the items they need cheaper, and for sellers, it’s an amazing way to get rid of excess products and reduce or eliminate possible losses.
It can be divided into separate groups, just price cuts and full advertising campaigns. This is a great way to attract additional customers. There is a full service of selling coupons, profit for discount sales. As a result, the buyer can get the goods and get half of the value. But with one buyer, most likely others will come. Also, rare customers don’t like to receive coupons that offer discounts. This increases sales and customer loyalty.