OnDemand WTP Pricing Research

Discounting pricing strategy – detrimental to retail brands | Truly Deeply/Madly

When a brand continually discounts its goods or services do you ever want to pay full price for those same goods when they aren’t on sale? Every time I visit Katmandu they are having a sale and its usually a substantial one with discounts of 40-70% off. The full price on the tag has become meaningless to me because I know that this must be inflated to counteract their continual discount strategy. This leaves me never wanting to pay full price because I know there will be a sale coming up. So is a discounting price strategy detrimental to your brand and what are some other strategies to build brand loyalty and repeat purchase?

When you continually discount consumers no longer feel like the sale is special, they come to expect it and become reluctant to pay full price which means you become stuck in a perpetual discounting cycle. Just think of the Pizza price wars, when brands such as Dominos and Pizza Hut started lowering their pizza prices consumers were no longer willing to pay full price so the discount strategy had to remain in place. Discounting erodes the value of your brand in the minds of your customers. It devalues the price that a customer is willing to pay.

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Discounting pricing strategy – detrimental to retail brands.

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