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21 Examples of Price Promotion

 , July 26, 2020
A price promotion is a reduced price that is intended to increase sales. This often increases revenue in the short term at the expense of profit margins. Alternatively, a price promotion can be part of a strategy to maximize long term returns by acquiring and retaining customers. The following are common types of price promotion.

Sale Price

Putting items on sale by offering a percentage or a dollar discount such as 50% or $50 dollars off.

Multi-Buy Promotion

Offering a deal with multiple purchases such as buy two get one free.

Loss Leader

A loss leader is a very low price for an item that is designed to get your customers to visit.

Coupons

Issuing coupons to customers. This is a form of price discrimination as price insensitive customers may not bother looking for coupons.

Deal of the Day

Regular deals, often loss leaders, that are designed to encourage regular and habitual visits.

Regular Sale

A big sale whereby all items or most items are discounted that occurs at regular and predicable intervals. For example, a grocery store that is 5% off on Tuesdays. This implements price discrimination as price sensitive customers will show up at the sale and price insensitive customers will shop at their own convenience.

Sales Event

A sale that is combined with promotional features such as contests, free food and giveaways. For example, a vehicle dealership that provides free food at a sales event combined with a variety of one-day-only price discounts.

Clearance Price

Steep discounts for unpopular or out-of-season items that are designed to clear inventory.

Seasonal Sale

A sale that attempts to prevent inventory problems by discounting seasonal items in the middle of the season. Common in the fashion industry.

Limited Time Offer

An offer that expires very quickly so as to create a sense of urgency. For example, an ecommerce page that places a countdown timer in an ad for a 12 hour sale.

Algorithms & AI

Complex pricing strategies that are implemented as a process of testing and refinement using automation. For example, an algorithm that offers discounts when inventory is high for an item and scales back these discounts as you begin to sell out.

Volume Discount

A discount for buying a number of items. For example, buy 10 and get 10% off.

Spending Threshold

A discount for spending a preset amount such as spend $100 and get $20 off.

Progressive Discount

A discount that goes up as you spend more. For example, spend $100 get 20% off, spend $200 get 30% off.

Psychological Discounting

Discounts based on psychological pricing for example $19 may be perceived more positively than $18.99 because it feels honest and has less digits.

All Inclusive Pricing

Guarantees that the customer won't be hit with extra fees at check out. For example, free shipping on an ecommerce site.

New Customer Promotion

A price promotion that is only available to new customers.

Subscription Deal

A price that is only available if you subscribe to regular automatic purchases that can be canceled at any time.

Contract Deal

A large discount for locking into a contract. This may be prohibited in some cases. For example, telecom companies are prohibited from locking customers into their services in some countries.

Targeted Deal

A deal that is only available to a targeted group of customers such as "Kids Eat Free" that targets a family demographic. Such offers can also target individual customers such as a large discount for people who stayed at a hotel chain regularly in the past but have suddenly discontinued this purchase behavior.

Financing Deal

Reductions in interest rates that emphasize that you can buy without paying much now.

Notes

Pricing practices are often regulated such that various laws may apply to promotional practices in your jurisdiction.
Overview: Price Promotion
Type
DefinitionThe practice of reducing prices to achieve marketing objectives.
Related Concepts

Pricing

This is the complete list of articles we have written about pricing.
Algorithmic Pricing
Bargaining Power
Benchmark Price
Commoditization
Cost-plus Pricing
Customary Pricing
Decoy Effect
Everyday Low Price
Marginal Utility
Willingness To Pay
Dynamic Pricing
High-Low Pricing
Market Value
Flat Pricing
Loss Leader
Predatory Pricing
Price Discrimination
Snob Effect
Market Price
Price Competition
Price Leadership
Premium Pricing
Price Economics
Price War
Revenue Management
Veblen Goods
Price Floor
Price Promotion
Price Sensitivity
Price Skimming
Price Umbrella
Pricing Power
Pricing Strategy
Sticky Prices
Value For Money
More ...
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Cost vs Price

The key differences between cost and price explained with a comparison table.

Loss Leader

An overview of loss leaders with examples.

Marketing Environment

An overview of the marketing environment with examples.

Sales Promotion Examples

An overview of sales promotions with examples.

Cost Plus Pricing

An overview of cost-plus pricing with detailed examples.

Price Floor

An overview of price floors with examples.

Pricing Strategy

An overview of common pricing strategies.

Value Pricing

The definition of value pricing with examples.

Marketing Management Examples

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Customer Incentives

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