Sales & Marketing Management

3. Regular on-sale strategy

With the regular on-sale strategy philosophy, the consumers are told that most
days throughout the year products are sold at competitive prices.

However, at regular intervals, there are lower or discount prices on

merchandise. Some of the reasons for the lower prices may be:

Û The products are seasonal such as snow shovels, garden products, or

summer fashions

Û To clear out remaining seasonal products before the next season

Û To clear out damaged merchandise

Sales of this nature are very predictable and, consequently, some consumers
will wait for the sale and never buy at the regular price.

For that reason, it is important to control the timing and length of these

sales in order to obtain the desired result but maintain an overall

gross margin.

4. Discount/clearance prices everyday

The discount/clearance prices everyday pricing philosophy tells the consumer
that the lowest prices are available everyday on products sold at the business.

A business taking this approach must sell large volumes of merchandise to

compensate for the low gross margins on the goods sold.

However, some businesses may be acquiring low-quality goods or perhaps

low-priced inventory from bankruptcy sales, thus may enjoy normal gross

margins even at the apparently low prices.

This pricing philosophy attracts the bargain hunter rather than a loyal

customer who responds to quality and service.

There are very good reasons for a business to discount merchandise
periodically, but think out the effect that discounting price will have on the
business before you do it.

We will discuss the effects of discounting in more detail in Pricing Policy.