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Are Price Promotions a Blessing in Disguise or a Waiting Disaster for Business Owners?

Price promotions are for many business owners a blessing in disguise. On the other hand, it may turn out to be a disaster for your business after a while. After all, the value of using price promotions is that it may render a quick remedy when you cashflows and revenues are lagging behind.

However, if you rely too much on price promotions to get business, you may put your business in danger over the long-term. In fact, you may turn your loyal customers into greedy bargain hunters.

So, please view the video (above) for a richer experience of this discussion…

What are price promotions?

Price promotions happen when business owners reduce the selling price of a product or service to entice customers to buy.

For example, you may give price promotions during festive times such as Christmas. Or, you may target specific customer segments like students or pensioners.

Price promotion strategies

So, what are the different price promotion strategies that you can use (SheerID)?

Buy One Get One Free…

This strategy is used often when the business wants to get rid of inventory, for instance when it wants to replace summer clothing with winter wear…


A coupon is a voucher that entitles the holder to a discount for a particular product. Hence it is usually mailed to the customer or it may be dished out at the checkout point.

Flash Sales

Here, for a very short time—sometimes just hours—businesses will slash their prices to unload excess inventory, acquire customers, or lift profits.

Loyalty Programs

A loyalty program is a reward program a business offers to its customers who frequently make purchases.

Seasonal Tie-Ins

Huge, industry-like, and highly advertised price promotions that take place certain times of the year, such as Black Friday.

Segment-specific price promotions

An effective promotional pricing strategy that targets certain buyer segments, such as students, teachers, seniors, or the military.

Pros and cons of using price promotion

Here are some of the pros and cons of using a price promotion strategy (Marketing Essentials Lab)


  • It urges the buyers to act in a now;
  • It draws new buyers to the brand;
  • Gives you a price advantage over your competitors;
  • Drives better revenue and cash flows for the short term;
  • Helps to get rid of old inventory;
  • Opportunity for upselling and cross-selling.


  • May affect your customers’ price perceptions and loyalty.
  • Frequent promotional pricing creates a lot of confusion with some customers, because they expect price discounts every time…
  • Long-term success is seldom the result of promotional pricing.
  • Promotional pricing can also hamper your relationships with your competitors.


Although price promotions are great to pick up your business when it’s needed, too much of it can be an absolute disaster.

Read also:
  1. Pricing Strategies for Small Businesses – Dynamic Pricing
  2. Pricing Strategies for Small Businesses – Competitive Pricing
  3. And, Pricing Strategies for Small Businesses – Cost plus Pricing

Baker, M. and Hart, S. 2008. The Marketing Book, Routledge.


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