Prices: Discounts in Times of Pandemic?

In the current complicated context, companies must reconsider their strategies so as not to fall into the error of making aggressive discounts, since they could affect the positioning of their products in the medium and long term.

Wednesday, April 8, 2020

Ariel Baños, a specialist in price management and founder of Fijaciondeprecios.com, explains some of the important conditions that must be considered when deciding to make discounts in an environment of high uncertainty such as that which has generated the current crisis of covid-19.

According to Baños, the idea of making aggressive discounts can be attractive, and even convenient, since the flow of money is very welcome in a crisis situation. The problem occurs later, in the medium and long term. The crisis due to the pandemic is not going to last forever. Eventually, companies will have to think about more than covering fixed costs, and attend to the violent fall in margins generated by the huge discounts announced.

The article adds that "... Price is one of the main references for the positioning of our product or service. It conveys a lot about our value proposal, and the confidence we have in it. In an environment of uncertainty, and this is certainly the case, a surprisingly low price can send the wrong message to my potential buyers."

Details of the conditions to be met in order to make discounts that benefit the company in the medium and long term:

1. Generating a positive feeling in our clients, which means that we empathize and want to help them in this difficult time.
2. Communicate that we also need help, but nevertheless we maintain our dignity and our principles, we are not "giving away".
3. Everything must have a limited duration and scope, conditions that have to be clearly communicated in advance.
4. Actions should not affect our positioning for the medium and long term.

See full article at Fijaciondeprecios.com.

Central American companies and covid-19: How to face the new commercial reality?

We prepared for our clients the report "Information System: Covid-19 and Business Outlook" which helps companies to measure the impact that the crisis will have on their activity in the coming months and what opportunities will arise in the context of the new commercial reality.

Click here to request access to this report.



More on this topic

Market Changes: Threats to Profitability

May 2020

Discounts and offers, increase in the price level generally and the rise in operating costs due to new health and safety protocols are the main threats to the profitability of companies in this new commercial reality.

Given this context of economic and health crisis, which derives from the outbreak of covid-19 at the global level, Ariel Baños, a specialist in price management and founder of Fijaciondeprecios.com, explains what are the main threats that could affect the profitability levels of companies, and details some strategies that could be applied to mitigate the adverse effects.

Pricing Strategy in Times of Crisis

March 2020

Demonstrating solidarity with customers through reasonable prices and preventing monopolization to ensure greater market coverage are some of the strategies that experts recommend to companies in contexts such as the current one.

Ariel Banos, specialist in price management and founder of Fijaciondeprecios.com, explains three strategies generating responsible behavior in an environment of high uncertainty as the current crisis of the coronavirus.

When to Increase Prices?

November 2019

Convincing the sales team that the increase in the price of the product is necessary, and that they are able to convey the message to customers correctly, is essential when it comes to increasing prices when production costs rise.

Ariel Banos, specialist in price management and founder of Fijaciondeprecios.com, explains five strategies to increase product prices successfully, maintaining profitability and ensuring the viability of the company in the face of rising costs.

Lowering Prices is Not Always the Answer

June 2018

When sales fall, changing prices and holding discounts and promotions is usually the first step companies take, but it is often done without considering the possible consequences.

In his article on pricing strategies in times of crisis, the expert in price management, Ariel Baños, explains the reasons why lowering prices is not always the best solution in a scenario of slowing sales.

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