Question: Write a 3 page on discount as a marketing strategy and instances of how it can be applied effectively in business using real or hypothetical examples.
Academic level: College
Discipline: Business 101
Paper Format: APA
Discount as a Marketing Strategy
Discounting is essential in marketing because it enables firms to increase their sales, attract new clients, and achieve customer loyalty. Nagle and Müller (2017) explain that discounting is a popular marketing strategy used by successful firms such as Coca-Cola to help them gain a competitive edge in the market. The authors opine that 95% percent of shoppers like discounts and approximately 60% look for items with discounts. In this regard, the authors suggest that the regular use of discounts helps firms to create a constant stream of customers and increased sales. Besides, discounts can improve a firm’s market area by attracting new customers and maintaining old ones. However, it is essential for firms to plan before issuing discounts because they should know their current breakeven point, current profit margin, and markup (Gabler et al. 2017). Planning also enables businesses to calculate the best discount price to maintain a favorable profit margin. This paper explores how discount marketing can be used by start-up firms effectively to help them gain a competitive advantage in the market. Discount marketing can be used by new firms to attract and maintain clients by providing a sign-up discount. However, the sign-up discount should be determined by offering different discount variants before the firm decides the standard sign-up offer.
How to determine the Right Discount Rate
Discount marketing can be used by new firms to attract and maintain clients by providing a sign-up discount. Nagle and Müller (2017) argue that discounts are important to firms because they help them to move stock, attract new clients, and reach their sales target during low peak periods. In this regard, the authors suggest that new businesses can use personalized incentives to attain customer loyalty. The authors explain that personalized incentives can help firms to collect… Cont