Sale Price Factors & Sale Strategies
The internet provides a healthy medium for competition. This is especially true for price and sale promotions, through incentives like coupons, free shipping, and multiple purchase discounts. Marketers know that buyer decisions are based largely on pricing, sale pricing (all else equal)
There are rationale related to the pricing strategy that companies are aware of, that fall under the auspice of 'sale'. Knowing these can help you get the better deal. Mainly, those related to the a) price floor; the bottom price that the company does or should know what it can sell the product/service for, and still stay afloat, and the b) list price: that price at which it is normally sold.
price cut - where the companies want to take the competitors business away. Spotting this can mean there is chance of comparable deals existing; where companies respond to others with price cuts, etc. (competitors also conceal this by the offer of 'free giveaways' that is really a tactic to preserve their prior pricing) Noticing this, may be as simple as seeing an advertised "price cut" if in fact it has been cut.. You may want to wait or keep looking for the better deal if the particular sale doesn't agree with your budget
price reduction - this is more benevolent. It is typcially introduced to bring in the numbers for the company. The occurance of the price reduction can sometimes mean a more reliable source to come back to, time and time again. Remarkably though, some businesses continue using the reduction throughout the year, from one season to the next, which makes the buyer question. To help uncover this, notice companies and sources that discount periodically with posting sale prices.
psychological pricing: the $9.95 routine, is it really that much less? The mind has a set pattern and many relailers know this. Avoid getting caught in this snare. It helps to be at least little calculating and move on. You can always come back.
loss leader pricing: selling intentionally at a low advertised price simply to show you other product lines. Bread in a grocery store is a common example, another is the product giveaway. [free glass vase with a dozen roses]. Many prices have this integrated into their design, and many buyers respond well to this tactic. But deciding if you want to buy, or else wait, can be simplified by just telling yourself, and the company " all I want is the original offer" and stick to it before even seeing other offerings. Also, don't be afraid to question if there are any additional related obligations with the offer. Don't be afraid to back out. Remember, they intend to develop a strong primary interest through you with an abiding loyalty.
slide down pricing: this is lowering of prices to bring in dollars from consecutive layers of demand. Sounds a little complicated, but this could be tactic by companies stable in their environment, when detectable areas of demand seem to be going unmet. Should you buy or should you hold off, as is always the question? You may want to seek out this strategy if your targeted purchase is a higher ticket item. Does the company you are shopping from offer broad product lines, or at least represent them to help enable this?
skim the cream pricing: usually happens when there is a unique product that is perceived to have a high worth with little or no competition. Such as a new product being introduced to the market, a next generation product. This happened with the first companies introducing DVD PC writers, or many computer technologies for that matter. For finding sale prices on these products, unless you are sure of your purchase and price is a secondary consideration -- a wait and see approach might possibly be instrumental in finding larger savings. Too it might help to try to sense if other buyers for the same product(s) who don't mind paying the premium, have reached or are nearing some general degree of satisfaction [like though customer reviews posted onsite, search engines, industry or consumer reviews, etc.] If this leans toward a yes, prices are likely to drop so wait.
Above all, know that some of the most successful sellers who are customer/buyer-oriented actually base their pricing strategies on what you perceive the value of the purchased item or service to be. Companies who are aware of buyers that shop price, use many incentives at their disposal.