Definition Discount Pricing. Description.
Discount Pricing is an approach to pricing that sets artificially
high prices and then offers large discounts to attract customers looking for
a bargain. It is a modification to the basic price. Purposes of this approach
are to increase short-term sales, move out-of-date stock, reward valuable
customers, and encourage distribution channel members to perform a function.
Some regular types of discounts are:
Seasonal discounts (Synchromarketing).
Forward dating (The date on the invoice is moved forward
and the buyer doesn’t pay for the goods until well after they arrive).
Promotional allowances (Price reduction given to the buyer
for performing some promotional activity).
Trade-ins (By offering more for a trade-in than it is actually
The biggest advantage of this type of pricing is that it encourages
additional sales without lowering the basic price or standard price or list
Although price discounting often results in additional sales in the short term, care must be taken not to harm the (long term) value of a brand as perceived by customers.
Discount Pricing Special Interest Group
Compare with: Marketing
Mix | Promotional
Pricing | Competitive
Pricing | Cost-plus
Standard Cost Pricing |
Marginal Cost Pricing
| Penetration Pricing
| Target Pricing
| Price Skimming
| Perceived Value