PGA Level 2 Merchandising and Inventory Practice Exam 2025 – Complete Prep Guide

Promotional pricing refers to the strategy of temporarily reducing prices in order to stimulate consumer interest and increase sales volume. This tactic is often used during special events, holidays, or to clear out inventory, making products more attractive to potential buyers. By lowering prices, retailers can create a sense of urgency and encourage quicker purchasing decisions among consumers, which can lead to increased sales in both the short and long term. This technique allows businesses to promote specific products, increase foot traffic, and enhance customer acquisition, often resulting in higher overall revenue during the promotional period.

In contrast, increasing prices for high-demand items or raising prices for lower demand products do not align with the core concept of promotional pricing, which revolves around offering discounts. Moreover, setting a fixed price for every product is unrelated to the temporary nature of promotional pricing strategies, which are inherently about adjusting prices dynamically to respond to market conditions or consumer behavior.