Price reduction is a tool for companies to encourage the sale of their products. However, to generate greater effectiveness from promotional campaigns, there are several key questions that must be answered when designing and implementing promotional campaigns, as the author explains.
There is an assumption that certain low-cost providers (think Costco, Amazon, Target, or Walmart, for example) must necessarily have the lowest prices on a given item. However, that assumption is often false. Brands count on customers being sticky and not comparison shopping for every single item. The presence of a membership fee makes that stickiness even truer, as the author explains.
Jos Eeland is Director at Simon-Kucher & Partners, Amsterdam, and also part of the firm's global Competence Center Consumer & Retail. Franka Reuvers is a Senior Consultant with Simon-Kucher & Partners, Amsterdam, who focuses on focus on marketing and brand strategy, value-based pricing and promotion excellence. Görkem Erdem is a Senior Consultant at Simon-Kucher & Partners, Amsterdam, focusing on value based pricing, promotion strategy and product management. Mark Helder is a Consultant with Simon-Kucher & Partners, Amsterdam, with expertise in portfolio optimization, promotion excellence and value based pricing.