Here Are Some Reasons to Use Promotional Pricing

The most powerful strategy that is used for sales today is referred to as Promotional Pricing. In this type of pricing, price of a particular product is reduced by a certain percentage for a limited period of time and that particular item is considered to be in sale for that period of time. This is very effective in increasing the demand of a particular product.

Some companies adapt this strategy to improve sales of a newly launched product. The motive behind giving this type of a discount is to compensate the amount of loss that might happen during this period, by increasing the volume of sales.

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• Increased Traffic

If you do a proper research then you will be able to understand the fact that the number of budget- conscious customers are much higher as compared to customers who have unlimited money to spend.

As a result of this, promotional pricing can be a very attractive option for most customers. In many cases retailers undertake a number of promotional activities in their retail stores in order to attract customers. This is done with the belief that customers will not only buy products from these stores for the promotional offers but will also maintain a long term relationship.

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• Increase in value perception

Promotional Pricing has a psychological effect on customers and if there is a red or a yellow tag on the product then customers tend to believe that the shop is providing a better rate as compared to other shops selling same or similar products. But in actuality, in most cases the products that are within this offer have a slightly lesser price as compared to the similar products sold in other shops. Therefore this promotional pricing definitely helps in an increased volume of sales which in turn helps in generating higher revenue.

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• Helps in customer loyalty and Retention

There are times when companies give promotional offers to customers who are regular buyers of their company products. This definitely encourages customers to buy goods from the same company and thereby increases the loyalty of the customers and also helps in a better retention.

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