Question

1. What are the possible consequences a salesperson might experience when using low-price tactics?   Be very specific and give detailed examples.

Answer 1

Following are a few list of examples a salesperson might experience when using low price tactics -

1. Low Customer Satisfaction -
   1. A famous study shows that customers are more likely to display satisfaction when products are priced reasonable i.e. nether too high no too low.
   2. A price that is niether too high nor too low sends a positive massage about the quality of the product to the customer and value of their purchase.
   3. Also price is a crutial factor as both a too high or too low price might limit the growth by creating negative market impact.
2. Economis of scale -
   1. However a low pricing startegy can benefit when a salesperson wants to achive the benefit of scale as a low price might attract masses.
   2. For example - If you sale/market a product at a discounted price, say 20% discount. It attracts the customer and results in a positive sale transaction.
3. Market Penetration -
   1. For any new product, if the product is marketed as free or discounted or offer price; it attracts the attention of the potential customers and help in marketing the product. As a customer is not necessarily ready to change his preferance or comfort product by taking risk at the same or high price.
   2. Hence, in case a saleperson uses the low price or offer price strategy in case of new launch, it would benefit the sales.