[et_4]

Is there a specific month to look out for Pentax discounting their camera bodies in the UK? Just interested to find out if they have a ‘summer bonanza’ on the horizon

[AfterPentax Mark II]

Is there a specific month to look out for Pentax discounting their camera bodies in the UK? Just interested to find out if they have a ‘summer bonanza’ on the horizon

Usually at the beginning of a new season, Pentax.eu has offers. The last one ended April 16th...

[biz-engineer]

One question we could ask ourselves is why a company would drop prices and lose money?
Dates are decided either to achieve market penetration (as part of promotion costs), or to stimulate sales at times of sales slumps.
From marketing standpoint, discount dates should be unpredictable, otherwise predictability would defeat the purpose.

[et_4]

You mean like Black Friday ….

[AfterPentax Mark II]

One question we could ask ourselves is why a company would drop prices and lose money?
Dates are decided either to achieve market penetration (as part of promotion costs), or to stimulate sales at times of sales slumps.
From marketing standpoint, discount dates should be unpredictable, otherwise predictability would defeat the purpose.

You mean that prices are actually too high and that at certain times the products are sold for the price that they are really worth? You do not really think that they would make these kind of offers it they would lose money by it?

Dates are decided either to achieve market penetration (as part of promotion costs), or to stimulate sales at times of sales slumps.

Do not think that Ricoh has market penetration in mind and I can believe that sales slumps could be a reason for Canon, Nikon, Panasonic or Sony to have a kind of offer, but not Ricoh with its Pentax brand, because with their market penetration they must be used to constant sales slumps. The other ones have variable kind of constant offers. Come to think of it, only Ricoh has some periods that they do not have an offer. Does that mean that only the other ones suffer from sales slumps or are they more in need of market penetration?

[biz-engineer]

You do not really think that they would make these kind of offers it they would lose money by it?

Dropping the price is a relative loss for each product unit sold, but overall profitable operation. This refers to the notions of "cost" vs "marginal cost" and "price elasticity of demand" i.e. how much more quantity is sold by dropping the price. During the time limited promotion, they move the volume vs profit margin tradeoff to a different point, but that point can only be sustained for a limited amount of time because sales volumes decrease again after the initial period of limited time offer. The money lost by selling at lower price is offset by the additional quantities sold and the value of future sales achieved via market penetration (e.g capture of new customers triggered by promotional prices). All this is about sales tactics.

The notion of marginal cost: If you run a restaurant, you have to pay for the floor, tooling, personnel (fixed costs) and raw materials (variable costs). Your costs are made of raw materials and fixed cost. So, if, some days of the week your restaurant is not full and you still have to pay for fixed costs, any price drop some food (e.g special promotion) that brings more customers, while still above the cost of raw material, will achieve more profits than keeping prices high.