Promotional Pricing Strategy: Definition, Types, Strategies, Examples

Are you also looking for a Promotional Pricing Strategy for your business?

If yes, then you’re at the right place

Promotional Pricing Strategy refers to a sales strategy where companies and brands lower their product prices for a short period to increase sales. Implementing promotional pricing in any business can help it grow exponentially. Thus, if you are also planning to implement pricing and promotion strategies in your business, read the article thoroughly. 

Because this article has mentioned everything you need to know about promotional pricing strategies before implementing them in any of your businesses. 

Let’s begin the article!!

What is Promotional Pricing?

Promotional Pricing definition refers to a strategy implemented by companies temporarily, during which they reduce their prices to attract potential customers and purchase their products or services. When any brand lowers the cost for a short period, they increase the value of products or services by implementing a sense of scarcity. These pricing and promotion strategies support customer acquisition by bringing many cost-conscious customers to your brand. It will also help you build customer loyalty, increase revenue, and improve short-term cash flow. 

Promotional Pricing Strategy
Promotional Pricing Strategy

Promotional Pricing strategies are only helpful in the short term for any company. If any brand uses it too many times, it will adversely impact the brand’s money power. It might also lead your brand customers to attach only to the sales period of your brand. And it will also fall your brand into a crowded marketplace, where all brands utilize the discounting pricing strategy.

Promotional Pricing Types 

Businesses try at their peak to attract customers. For this, they use various kinds of promotional tactics. Promotional pricing strategy is one of the most used 4P’s marketing tactics – product place price promotion. We have mentioned different 4ps promotion techniques below:

Promotional Pricing Types
Promotional Pricing Types


You may have observed that some products are offered at lower prices if you purchase them in bulk or if they are about to expire. It generally happens in vegetable supermarkets at the end of the day. It also sells in the form of buy one and gets one free. In such discounts offered, customers receive a 25% discount while it depicts as a 50%; it is a simple psychological impact. 

Flash and Seasonal Sales:

Flash sales are considered under the discounted price for a short period only. For instance, you have seen various flash sales on the sites like Amazon, Flipkart, etc., for 2-3 hours. At the same time, seasonal sales take place for days and weeks in a particular month of the year during a specific season. You would have seen seasonal sales in various malls or other local businesses. 

Loyalty Programmes:

So many giant businesses offer loyalty programs. It works on maintaining an existing customer instead of acquiring a new one. In these loyalty programs, loyal members have various special deals and offerings. One of the best examples of loyalty programs is Amazon Prime Membership.


Coupons are one of the oldest forms of making customers return to the company for more shopping. For instance, coupons offer a 10% additional discount on orders of $50, which makes the customer spend $50 upon your company to grab that 10% discount. It simply delivers $50 revenue to the company. 

Free Delivery:

Free delivery option is mainly welcomed by the customers because it minimizes their costs. Customers don’t have to pay extra money for their product to get it delivered to their place. It often suits well for oversized furniture and home appliances. 

Gamified Promotion:

Most online businesses and stores promote their products through gamified. It happens in the form of lucky draws or providing feedback to receive discounts. Gamified promotions engage the customers in various activities and encourage them to buy the products or services after providing decent discounts. 

Multi-stage Validation:

Many organizations have loyalty programs under which they offer membership cards to their selected users. Here, customers win loyalty points when they shop with a brand or group of brands. Once customers collect specific issues, they can use them for various promotional prices. Credit cards providing cashback are one of the best examples of a multi-stage validation pricing strategy. In such an offering, customers generally hold a particular credit card or a type of card.

Promotional Pricing Strategies 

There are various pricing and promotion strategies that the company uses. Promotional pricing strategies are top-notch. 

Promotional Pricing Strategies
Promotional Pricing Strategies

1. Describe the Objective of the Promotional Pricing

It is required for any business to decide its output from implementing any business strategy. Whether the main motive is to attract new customers or clear the inventory, all the companies do not implement the strategy for the same purpose. Thus, it would be better to pre-determine your ultimate goals. Then, you need to think about your resources, too. Are they enough for you to implement a decent promotional pricing strategy?  

2. Plan Implementation of Strategy

During the primary steps, deciding which products should be promoted is essential. You should analyze and determine if you need to initiate brand awareness of any new product or clear the stock of old products. It would help if you also studied whether you would be local or national. When you know the answers to all these questions, you should jump into deciding your promotional channels. It would help if you determined whether your promotion should be valid for online stores or physical stores. Then, it would help if you decided on all the other strategies and 

3. Choose the Right Time

Launching any new deals or sales should have a suitable time. For instance, most sales take place during the festive seasons and holidays. However, several companies also implement their promotional pricing strategies when no other competitor does in the market. When you decide on the time for promotion, you should also determine the duration of the promotion. 

4. Select the Correct Customer Segment

Promotional pricing adversely affects the relationship with existing customers. Since so many customers see 

 promotional pricing offers from various companies in the market. It attracts the old customer to newer companies because of their heavy discounts. Some companies running campaigns consisting of deals for new users only attract most customers from various places. 

5. Decide a Fixed Budget 

Every business should work on its budget. Thus, all of them should have a pre-determined budget for promotional pricing. You should include the marketing cost and customer acquisition cost in it. 

6. Collect Feedback

Businesses must gather feedback from their customers. It provides them with valuable insights. Companies can collect this data along with their campaigns to know whether they need to carry on or try something new later. You should also use analysts’ help to evaluate the data, like how frequently your items are sold and how much time it took for them to decide. 

Promotional Pricing Examples

Various real-life promotional pricing examples would help you understand how to set up your business’s promotional pricing. Let’s have a look at them:


Besides the best-selling products, Nike has also excelled in providing customers with the best possible experience. With the help of Nike products, customers can have a better experience. Nike’s promotional pricing strategies are mind-blowing. For instance, Nike has launched its Nike+ Run Club application, which allows all the members to interact even with each other. Between these conversations, Nike introduced its essential products, which brands excessive sales for them. They mainly offer a limited-time deal, which increases the scarcity of customers. 


If buyers are offered a free shipping service, there are 93% more chance that customers will buy the product. And, Vinomo does the same. After every successful purchase, Vinimo offers free shipping services to its customers. They even utilize personalized subject lines, where they receive an email consisting of promotional deals and free shipping for a specified time frame.

Tarte Tarte 

Tarte Tarte utilizes the multi-stage validation technique that helps persuade customers to purchase more products from the company. People like to buy the items more as Buy 1 Get 1 Free. It subconsciously encourages the customer to spend more on your business. 

Final Words 

Promotional Pricing Strategy is one of the top-notch strategies in the market. It helps any business grow at a good pace. All the strategies mentioned in this article will help you implement practical tactics in your industry. We hope you like this article and find all the necessary information to establish your promotional pricing strategy. 

Leave a Comment

Some common BI Tools