Promotional pricing refers to temporarily pricing products below the list price and sometimes even below cost to increase short-run sales and to create buying excitement and urgency.
Promotional pricing takes several forms. A seller may simply offer discounts from normal prices to increase sales and reduce inventories. Sellers also use special-event pricing in certain seasons to draw more customers. Thus, large-screen TVs and other consumer electronics are promotionally priced in November and December to attract holiday shoppers into the stores.
Promotional pricing is the special deals in price that retailers use to encourage a first purchase, to encourage repeat business, or to close a sale.