Preparation for discounting prices
Examine how you currently price the offerings in your business. Look over the
past year or so at all the times you have discounted your prices.
First, ask yourself:
Examine each sale event where you discounted your offerings.
Now ask yourself:
Were prices reduced in response to seasonal price variations in your
industry?
Were prices reduced in a planned and organized way as part of an
overall marketing strategy?
How many times did you discount offerings as a reaction to competitor
prices?
How many times did competitors reduce their prices in reaction to you
discounting your prices?
What did you expect to accomplish in the short term each time prices
were discounted?
What did you expect to accomplish in the long term each time prices
were discounted?How much revenue was generated directly from the offerings that were
discounted?
What was the gross margin generated on these sales?
How much revenue was generated from accessory or related products
during the discount period?
What was the gross margin generated on these offerings?
If you combine the sales of the discounted products and the accessory
and related products, how do these sales compare to a similar
period when offerings were not discounted?
How does the overall gross margin during the discounted period
compare to the gross margin in a similar period when offerings
were not discounted?
How many times was total average inventory value turned over before
offerings were discounted?
How was the rate of inventory turnover affected by discounting
offerings in the previous year?