The advantages of comparison discount pricing are highlighted are as follows:
Cost-efficient: Comparison discount pricing enables consumers to save money in the buying process. Such discounting type offers an advantage to consumers in purchasing any product at the lowest possible price as per the budget.
Buying alternatives: Comparison discount pricing offers various buying alternatives to customers. To illustrate, consumers can either receive 70% direct off on buying two products or a 50% off on buying a single product.
Higher usage: Comparison discounting also offers higher consumption to customers by allowing them to buy a product at a lesser price with more profitability. Since utility is compared with the purchasing price of a product.
Higher customer gratification: Comparison discount pricing gives various alternatives to consumers, thus leading to customer gratification.
Comparison Discount Pricing Protocols
The different stages that are implemented by customers for comparing prices are, the customer first notices the marked or listed product price that is labeled on the packaging. Secondly, they considers the discount rate offered on buying one unit, two units, or more of the product. Thirdly, the customer evaluates the actual discounted product price by multiplying the product price with the marked price. The actual sales price of the product is derived by deducting the actual discounted price from the listed/marked price. Lastly, the consumer makes a buying decision based on comparative analysis by comparing the discount and sales price of all the products.
The listed price of Product X is 500 dollars, and Product Y is 600 dollars. The discounting rate of Product X is 10% and Product Y is 15%. The derivation of the actual discount is as follows:
Product X is equal to 500 dollars multiplied by 10%, gives a discount of 50 dollars. While, Product Y equals 600 dollars multiplied by 15%, arrives at a discount of 90 dollars.
The derivation of actual sales price, Product X is 500 dollars less than 50 dollars, gives selling price of 450 dollars. Product Y is 600 dollars less than 90 dollars, arriving at a selling price of 510 dollars. Upon comparative analysis, the selling price of Product X is less than Product Y. Lastly, the consumer will purchase Product X as it is cheaper than Product Y.
The consumer uses comparison discount pricing to make the purchasing decision. The actual selling price for both products is evaluated by reducing the listed price of the product with the discounting percentage on each product. As the selling price of Product X is less, the customer purchases Product X. Irrespective of the fact that the discount price for Product Y is more, customers purchase Product X as the actual selling price of Product X is less and offers a cost-advantage to the customer.