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Chapter 8
6.5 Discount pricing
Discount pricing is the long-term pricing strategy based on low cost, high volume and
low margins.
Products are priced lower than the market norm, but are put forward as being of
comparable quality. The aim is that the product will procure a larger share of the
market than it might otherwise do, thereby counteracting the reduction in selling
price.
However, care must be taken to ensure that potential customers' perceptions of the
product are not prejudiced by the lower price.
The consumer will often view with suspicion a branded product that is priced at even
a small discount to the prevailing market rate.
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