6. The Effects of Discounting Prices
Introduction
Another important function of a marketing manager is to determine any
discounting of prices of the goods and services of a business.
Every business discounts the price of its offerings. Some businesses do it only
occasionally and some do it as part of a planned marketing strategy.
Many businesses discount their offerings either as a
reaction to competitive activity or to penetrate a
new market.
Before doing this they often do not think through
what the effect on their business will be of
discounting their offerings.
Discounting offerings can be effective but it must be
done in a planned and controlled way and with a clear
objective in mind.In Effects of Discounting Prices, we will examine some of the effects on the
business of discounting prices. We will discuss some of the key factors that a
sales and marketing manager must consider before implementing a discount
strategy.
How to use this information
Do you consider the effects of discounting prices beforehand? Do you know in
advance, what the effects of discounting prices will be on the sales and profits
of your company?
Here, we will examine the effects of discounting prices. There are often very
good reasons for discounting prices, but the reasons have to be thought out and
the results of the action considered.
As you go through this material, consider how you presently make decisions on
discounting prices.