Price-Adjustment Strategies
{"Image DocumentName": "Price-Adjustment Strategies", "Image ImageDescription": "Risks of promotional pricing. Used too frequently, and copies by competitors can create deal-prone customers who will wait for promotions and avoid buying at regular price. Creates price wars. Promotional pricing, however, can have adverse effects. During most holiday seasons, for example, it\u2019s an all-out bargain war. Marketers carpet-bomb consumers with deals, causing buyer wear-out and pricing confusion. Used too frequently, price promotions can create deal-prone customers who wait until brands go on sale before buying them. In addition, constantly reduced prices can erode a brand\u2019s value in the eyes of customers. Marketers sometimes become addicted to promotional pricing, especially in difficult economic times. They use price promotions as a quick fix instead of sweating through the difficult process of developing effective longer-term strategies for building their brands. For example, as we learned in JC Penney story at the beginning of Chapter 10, before announcing its turnaround pricing strategy, Penney\u2019s developed an unhealthy reliance on coupons, markdowns, and nonstop sales, which accounted for the vast majority of its revenues. But companies must be careful to balance short-term sales incentives against long-term brand building. Some promotional pricing can be an effective means of generating sales in certain circumstances. But as JC Penney learned, a steady diet of promotional pricing can be destructive to a brand\u2019s image and profitability.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}