Author Topic: Discount and Branding Strategy  (Read 89 times)

Offline Maruf Reza Byron

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Discount and Branding Strategy
« on: May 28, 2017, 12:10:34 PM »
Discount means reductions to a basic price of goods or services. On the other hand, the basic motive of a company to go for branding is to charge premium (higher) price for its products. Apparently it may seem that these two are contradictory marketing techniques. However, in reality discount may sometimes help to build up and maintain strong brand equity. Basically, a company may offer discount for several reasons: to face an economic recession, to enter into a new market or market segment, to clear stock lot of an old version of a brand, to increase market share in a short term, to face the challenge of severe competition, or even it may use discount as a promotional tool of its IMC program. By this way a company may use discount in its branding strategy effectively. In offering discount of a premium brand a company has to keep one thing in its mind: it has to offer discount in a way that it does no harm to the high image of its brand. The company must convince the customers that discount will not shrink the high perceived quality of its brand. Last but not the least, to be effective discount should be offered only for short-term perspective.