Promotions can’t compensate for high prices
Promotions are a time-honored strategy businesses use to boost sales, attract new customers, and reward loyalty. However, there’s an ongoing debate about their effectiveness, especially when products are priced higher than competitors. In this blog post, we’ll delve into why promotions might not be the silver bullet for high product prices and explore alternative strategies businesses can use to remain competitive.
Brands are learning that the high prices are leading to a decline in market share as consumers trade down to more value. Kraft, for example, is seeing a significant loss of market share because it raised prices, and consumers refuse to pay more for items they see as interchangeable. Supply issues were cited as the reason prices increased, but those supply issues, for the most part, have retreated. Unfortunately, prices have not decreased because they have become addicted to higher profits.
The Allure of Promotions
Promotions come in various forms, from discounts to buy-one-get-one-free offers. They’re designed to create a sense of urgency and incentivize quick purchases. The logic is simple: offer a temporary deal to get more people through the door or to the checkout cart.
