In promotional pricing i can't understand the cash rebets , loss leaders and low interest financing kindly tell me in easy way.
In Promotional pricing companies can use several pricing tactics in order to stimulate early purchase. Loss leader pricing, cash rebates and low-interest financing all come under the category of promotional pricing.
In Loss leader pricing supermarkets or departmental stores often lower prices on some well-known brands order to attract store more customer to the store. This is done so that customers buy loss leader items along with other products. This strategy pays if revenue generated by sales on other products compensates for the lower margins on the loss-leader items.
In cash rebate money is refunded to customers who buy goods from dealers or retailers within specified period of time. E.g. a car dealer may announce that anyone who purchases a certain car within the month of July at a price of Rs.600000 will receive a cash rebate of Rs.250000. This is done in order to clear inventories.
In low interest financing instead of cutting prices, the company can offer customers merchandise at low interest rates. This lowers their monthly payments. Auto makers usually offer cars to their customers at low interest rates in order to stimulate purchase among their customers.
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