It is an undeniable fact that markets in India offer discounts as a business strategy to attract the customers and boost up the sales considerably. Of course, it remains the most dynamic principle of core sectors like commerce, industry and business. The customers are naturally curious about finding the offers from time to time.
They often visit the malls in the hope of discount offers as a pleasant shopping experience. Discount offers always attract customers. ‘Buy one and Get two” is usually catchy where the customers are tempted to purchase them at discount rates. Why do Indians look at discount offers?
Inarguably, the Indians become so passionate because it is deeply rooted in their culture of bargaining and negotiating prices. Haggling (Bargaining) is expected. Discount can best be seen as a normal part of the purchase exercise to save money and get the maximum deal. It is a sort of human behavior that focuses on value for money.
If bargaining is looked at the most common practice in India especially in local markets, the sellers usually expect the customers to negotiate prices. Bargaining is typically done in market places where product prices are not fixed.
In the quality analysis, it is found that brand reputation is largely affected. Price sensitivity in Indian markets is highly influential. Discounts help in retaining the old customers back. Thus they lure new customers to shop on E –commerce platforms wherein they get high discount and free home delivery.
But offering discounts can influence positive and negative impacts on a company’s profits. Discounts can attract and reduce profit margins. Any discount offer can make the customers feel like they gain something.
Discount sales can be seen as a sense of promotional campaign in the market. For consumers, it triggers curiosity and encouragement. For businessmen, it offers a temporary boost in revenue.
The Darker Side of Discount Culture: The very risk of damaging the reputation of brand is directly affecting quality. Customers are habituated to the ‘waiting game’ for discounts before the purchase. Usually, there emerges a clash between price war and competition.
Profit margins experience huge losses if discount culture continues unabated. This can devalue the company’s brand. Excessive and constant discount can damage brands.
Yet beneath the surface, lies a hidden reality, which is the culture of endless sales and discounts erodes brand value. Experts wonder whether short term benefits of discount are worth the quality to brand perception. Credibility of the brand is always compromised.
While the discounts attract the customers they often come at any invisible cost. These include reduced investment in critical areas such as employee training, customer experience and innovation.
Over a period of time, this ‘race to bottom’ erodes brand equity. This is what is exactly taking place in markets now. There is another biased story to this discount culture. This mainly exists between opportunistic buyers and loyal customers.
Moreover the customers are highly price-sensitive. They always prefer to chase the best deals. But loyal customers pay full price and feel overlooked and undervalued. Here brand quality and pricing strategies prioritize the loyal customers. Further, frequent discount culture may attract more sales but diminish vale beyond expectations. This trend confuses the customers about the brand’s position and rating. Brand reputation is integral to the pricing integrity.
There is another side of discount culture that is psychological pricing strategies, such as discounts. They risk long term brand equity. Loyalty initiatives help retain customers, promote brand quality and preserve pricing consistency.
The discount culture may boost up sales.
But they can undermine long term goals. Balancing short term gains with long term vision is one of the challenges for any brand to sustain its mobility in the market. They do add quality features like quality, craftsmanship, and innovations are always preferred. Thus innovation becomes a powerful solution to discount dependency.
It may foster adaptability and ensures relevance in an ever-changing market. The social media acts as a catalyst agent for personalized expenses and meaningful interaction with the customers. The companies build stronger relationships with the customers. The social media is thus a platform to derive loyalty on customer satisfaction. The discount cycle is, however, difficult to escape from Indian markets. Brands and branding have become buzzwords through media advertisements.
Brand integrity has been challenged when threatened by the so called discount culture. At this juncture, feedback from the customers remains crucial for staying attuned to their evolving preferences. Their expectations are always on brand quality. Trust, loyalty, adaptability, competition remain relevant in the markets.
The endless saga of discount culture may focus on short term gains but often comes at the expense of long term brand sustenance. A temporary sales spike or building lasting value is the sole question of today’s markets. True brand strength is its unparalleled quality standards.
Brands can position themselves as valuable investments in their customer’s lives by rejecting the discount traps. Price wars become regular obstacles in the competitive markets. Endurance in the marketplace is subject to doing away with discount culture. Goods would no doubt lose the quality.
P.V. Laxmiprasad is an author and editor of 44 books in English Literature
