How to set discounts for various related products | New Neuromarketing

So, what makes a specific chocolate bar different or better compared to others? Why would some shelves sell out immediately and are some shelves gathering dust? Well, we can think of many reasons like flavor (caramel seasalt, yeah!), brand, but for a large part: price.

Unfortunately, a pricing strategy can be challenging, complex, and offers no shortcuts. This reality makes “winging it” an enticing option when you don’t know where to begin. Offering discounts are an extremely valuable asset to your pricing strategy, knowing consumers love discounts. And discounts stand out. But what’s the best way to place discounts on your products?

The results from Sinitsyn (2016) serve as a guidance for pricing managers on how to coordinate price promotions of multiple products within a firm’s product line. Here’s what he has found:

If the brand name is the more important determinant of consumer choice than product characteristics, then you should avoid simultaneous promotions of your products to curb cannibalization effects.

  • If the product characteristics are more important than the brand name for consumer choice, then you should consider promoting your products together.
  • The greater the importance of product characteristics is, the more often you should employ joint promotions using larger discounts.

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How to set discounts for various related products – New Neuromarketing.