Do discount campaigns really work

Why do sellers in Turkey strongly resist to decrease prices? Why do we need sales and discounts campaigns all the time? Are these campaigns an effective way to win customers?

Let’s take a quick look at the housing sector first: Currently, we’re facing a situation where home prices are rising while home sales are falling. As a matter of fact, this trend hasn’t change a bit for months now. And the reason for that is the fact that house owners or project owners do resist to offering discount despite a decline in house sales. They also do not want to get into conflict with the persons to whom they’ve previously sold houses. A lot of contractors believe that they don’t need to offer discounts, especially “zero interest rate” campaigns, and keep their prices unchanged.

Discount campaigns are an old tradition. Back in the day, those who sell their products in exchange for foreign currency would say “We’ve fixed the exchange rate” as a marketing tactic, thus could keep the prices in Euro or Dollar intact. The same thing goes for today. Almost everyone, from Automotive sector to Housing, keep their business floating through campaigns such as “zero interest” or “make your down payment, get the deed/car!”.

“Financing needs attention…”

I’ve recently noticed a sales campaign where the company would give a coffee maker for free to customers who buy 30 boxes of coffee. To tell you the truth, this offer seemed quite appealing to me as I’m a regular coffee lover and coffee capsules can stay fresh for months. I said to my son Kerim, “We already consume 3 capsules of coffer per week. I’ve bought a big coffee stock that would last two and a half months, and on the upside, I have a new coffee maker. It’s a win-win!” Neither the price of the coffee nor the price of the coffee maker has fallen.

The biggest side effect of a lack of demand is the fact that sellers are forced to offer discounts. Selling goods and products, which became 2 or 3 times more expensive due to high exchange rates, by offering discount campaigns in favour of both the seller and the consumer might be considered a good reflex.

When it comes to financing of goods and services, things do not seem easy at all. Attempting to design a sales campaign without creating specific models to share the risk between the producer, the seller and the buyer may lead to unstable results. We also need to offer a diverse set of products, appealing choices of financing for the customer so s/he can buy the product or service of his/her choice. Considering the fact that the duty of a seller is to make sure that the consumer buys something, then the goods-cash flow must be designed skilfully.

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