A large number of modern products find their consumers thanks to the efforts of marketers. Advertising is a centuries-old experience, it is difficult to establish the exact date of its appearance. However, marketing began to take shape at the end of the 19th century in connection with industrialization and the formation of production in most developed countries. Its integral part is the pricing strategy, and they include discounts. Similar ways to increase sales are almost the oldest and arose almost simultaneously with the advent of trade. A discount is the simplest advertisement for a product.
In simple words
A discount is a reduction in the price of a product, service or work, but as a rule with maintaining profitability or to go to zero (minimize loss). It is used to stimulate demand and increase sales. Often discounts are reported in an advertisement for a product or, for example, a grocery store. As a rule, they can be installed and removed several times a day, and in fact are a change in prices in both directions. Very often, such discounts are used in grocery stores to stimulate demand at different times of the day or days of the week. From the point of view of accounting, this will not affect its management in any way, as a rule, only the purchase price is fixed, as well as profit. In general, promotions with lower prices surround us everywhere, such as discounts in supermarkets or cafes.
Pricing
If you delve into marketing, you can identify many different pricing strategies. The following are those that are directly related to the discounts:
- Moving, falling price - a gradual decrease in the price of goods, to cover a larger market share, allows you to get additional profit after major sales
- Preferential price over competitors is a good way to discourage customers or attract new customers. It is necessary to optimize costs so that the price is lower than that of other firms
- Differentiating the prices of related products is a great way to get more profit by raising the price of a related product and lowering the basic price , for example, discounts on toothbrushes are offset by expensive toothpaste.
Practical tips
The most primitive, but, nevertheless, effective way is to establish an unreasonably high price on the main price tag and its subsequent reduction with the word "discount". This is very common in many department stores, consumer electronics stores, and supermarkets. It may work in a small shop, but subject to high traffic and a large flow of customers.
Percentage discount. In general, it can be anything, depending on the initial price. No one forbids making a decrease of 1% and 99%, which, by the way, will attract a lot of attention and can turn out to be a good advertising campaign, but this should be done wisely, as this can frighten off consumers. The most common options are 10-25%, you often find such discounts in supermarkets.
In general, it is better not to write a percentage discount, as this makes it difficult for the buyer to calculate the price and turns the trip into a store into solving mathematical problems. And your customers will not like this. In this case, it’s worth at least writing the difference that the buyer will save.
Rounding prices. The numbers matter, especially when it comes to discounts. Buyers respond better when the seller sets the exact prices for the goods, for example, 793 rubles 35 kopecks than 794 or 792. In the latter case, the amount is less. However, in a situation with more accurate amounts, the consumer has the feeling that the seller carefully analyzes the costs and expenses associated with the production or sale of goods.
Another method is nines. Works great with expensive products, such as consumer electronics. A TV cost of 10,000 is more likely to be bought for 9.999. Moreover, its purchase price may be 7,000, and the initial price before the discount of 14,000. The buyer perceives the first figures in cost more easily, and a feeling of economy is created, and if the initial price is overestimated, the goods will go even faster.
The discount is on the verge of profitability, zero and even minus. What for? Such a skid is a great way to empty a warehouse or shelves for other goods. This happens, and quite often, especially from manufacturers of goods, and not from stores. For the consumer, this is a great way to buy cheaper, and for the seller it is an equally wonderful way to get rid of excess products, reducing or even covering possible losses.
Discount coupons
You can separate it into a separate group, as this is not just a price reduction, but an entire advertising campaign. This method is a great way to attract additional customers. There are entire services selling coupons, they make a profit on the sale of discounts. As a result, the buyer can receive the goods for half its value. However, with one buyer, most likely, many others will come. In addition, a rare customer does not like to receive a discount coupon. This increases sales and customer loyalty.