Price promotions are a major category of sales promotions where companies reduce the selling price of a product or service to entice customers to buy. While each approach is unique, pricing incentives are generally intended to bring in customers, drive revenue and cash flow and turn over inventory.

Online Promotions

Remember snipping coupons from the weekly mailers? Today's coupon is still presented to consumers through print media, but is also widely recognized as a popular Internet and email promotional feature. Likewise, coupon apps make it easy for consumers to save money at the till, using their handheld devices to show coupon codes. Loyalty membership cards remain popular, too, offering bargains to repeat buyers, reward points toward products and a more attractive digital punch card that reduces wallet clutter. Free shipping on minimum order amounts is another form of online promotion used by savvy e-retailers and some brick-and-mortar companies, alike. Offering free shipping may even reduce the rate of shopping-cart-abandonment on e-commerce sites.

Point-of-Sale Discounts

An amount-off or percent-off point-of-sale discount is the simple type of price promotion method. With this approach, once a discount price is determined, employees change the price on the product bar code and on shelf signage. The point is to convey better value because of the lowered price. Companies often promote an in-store discount through weekly ad mailers or newspaper inserts. In some cases, the deals are offered as a surprise in-store special.

Bulk Buys

Other price promotions are driven by volume purchases. A common retail promotion is buy-one-get-one-free, or BOGO. In this scenario, a customer purchases one unit of a product and gets a second free. Similarly, companies may offer promotions such as buy two, get the third one free. Frequency shopper programs or loyalty programs similarly offer price incentives to customers who make frequent or large purchases. With the Best Buy rewards program, for instance, buyers get gift cards as they accrue points through purchases. A number of supermarkets began joint ventures with gas stations in 2012 and 2013, whereby in-store purchases led to cents off at the pump.

Trade Promotions

Price promotions are also offered in the business-to-business market. Businesses that buy for consumption receive similar incentives to consumers. Trade buyers that purchase products from suppliers for resale receive several distinct price promotions. Off-invoice discounts are simply offers of a certain percentage off a given order. Bulk buys are a common trade market incentive. In this case, companies that order larger quantities get volume deals, such as 10 to 20 percent a certain minimum order size.