Discountisabusinessmeansofattractingcustomersandenhancingtheirdesireofpurchasing.Butnowdiscountislosingitsappealafteryears’crazeaboutit.
Therehavebaanseveralreasonsforthis.Foronething,customersaremorematureandsensible.Theyaremorecarefulabouttheirmoneyandhaveamorereasonablebudget.Soitisnotsoeasyforsellerstopersuadethemtopurchasesomeuselessthingsforthesakeofdiscount.Foranother,customersbegintosuspectwhatisbehindtheattractiveappearanceofdiscount.AsWecansee,moststoresclaimtheyareofferingadiscountalmosteveryday.Howmucharetheitemsonsalereallyworth?Andhowmuchmoneymaythesellersearniftheysellatoriginalprices?Thereforediscountseemstothemmorelikedeceptionthanagoodbargain.
Inmyview,discountisnotacure-allforsellers.Ascustomersandthemarketbecomeincreasinglymature,thesellershavetoadaptthemselvestothechangefromacustomer—orientedpointofview.
Asacrucialpartofpricingstrategy,discountmustbemanagedfromastrategicview.However,accordingtoasurvey,lessthanaquarteroffinancialexecutiveskeeptrackwiththetotalamountofnegotiateddiscountgiven;almostnonemeasurehowthesediscountaredistributedaccrossvariouscoutomersegmentsandovertime.
Tocultivatediscountawarenessanddiscipline,managersshoulestartbyaskingthemselvesthefollowingquestions:
1.Arediscountbeinginvestedincustomersegmentsorproductcategorieswithgreateststrategicvalue?
2.Dodiscountlevelsassociatedwithaparticularcustomersegmentsorproductcategoriesvarywidely,beyondwhatcanbeattributedtothedifferencesindealsize?
3.Arediscountlevelsfairlyconsistentovertime,ordotheyrisesharplyattheendofthequarter?
4.Isexcessivediscount