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Depends on following few conditions; how mature your market is, your product, your target audience, the competiotion you are facing, etc, and there had been instances when lowering the prices have actually resulted in decrease in sales (but this phenomenon actually happens with premium products where people attach there self esteem).
In FMCG and electronics equipment : it works100 % - sometimes sales increases from100 to1000 % and this statement is based on MIS - facts and datas gathered during the past10 years in Africa's largest group of hypermarket and supermarket Shoprite Checkers South Africa in20 countries.
I have personally experienced this when doing massive promotions of known valued items and branded fmcg products.
2 concrete examples :
In1988 as sales manager for Canon Business equipment products in Mauritius , Canon Business equipment was phasing out fluorescent display calculators replacing it with LED display calculators. I made a deal with Canon and bought a stock of10,000 calculators and promoted it at half the price. From1987 when the product was launched to mid1988 we had sold only1200 units. When the calculator was promoted with a50 % discount, we sold the10,000 units in the next2 months and went out of stock.
In2007, Procter and Gamble was marketing intensively Bonux washing powder4 Kg packs on the local market. I made a deal with them and bought10 containers at a heavily discounted price backed by a consumers coupon. Sales on the Bonux washing powder4 kg varied from600 to800 units monthly until Feb2007. On the31st of March2007, I promoted Bonux washing powder4 kg at half the normal price and did a masssive promotion for one day. It was the talk of the town and attracted huge unseen crowds at Shoprite hypermarket and we established a new sales record for the day. We sold8 containers in one day and as from March2007 monthly sales of Bonux4 kg shot to5000 units monthly and this positioned Bonux for the next3 years as the best selling washing powder in Mauritius.
It depends on the type of customers you are targeting.
Not necessarily. It depends on the elasticity of demand of the product. Some products are elastice which means that changing the price results in proportional changes in demand. Other products are not as elastic.
Lowering the selling prices sometimes is a requirement to stay competitive in changing markets and to show the consumer that your products are affordable to them but keeping in mind to stay profitable and not to jeopardize the quality.
Its depends on the following subjects:
1- Market trend.
2- Availability.
3- The number of competitors, their strengths and market shares.
4- The nature of the target market.
5- Your stock volume.
6- Market consumption.
Low price doesn't give a continuous sale. Our products/services should be good enough to match/exceed customer requirements, then there would be no doubt in continuous sale.
not all the time but it is factor can support .because lower price can allow alot of people to get the product. but if the product jeaber and the qualty is bad then the sale will not increase.
Yes, it is necessary where others are competing to market the same quality products. Standard Oil used to have this trick to win its oil market in1890s. It would slash prices in markets where other group was competing and subsidize the price cuts by rising prices where other were not present. You may say this is unethical but I gues this really works.
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