What pricing strategy is used to temporarily reduce prices to stimulate product demand?

Promotional pricing is a strategy specifically designed to temporarily lower prices to boost demand for a product. This approach is commonly used during sales events, holidays, or product launches, where businesses aim to attract new customers, clear inventory, or increase market share by creating a sense of urgency. The reduction in price can entice consumers who might otherwise be hesitant to purchase, thus driving both traffic and sales volume in the short term.

Moreover, promotional pricing can enhance awareness of a product, allowing consumers to try it at a reduced cost. This strategy plays a crucial role in marketing campaigns, as it effectively combines price sensitivity with promotional activities to stimulate interest and encourage quick purchasing decisions. By leveraging this tactic, businesses can create excitement and a buzz around a product while achieving immediate sales objectives.

Other strategies, while they may also influence pricing or demand, do not specifically focus on the temporary reduction of prices to stimulate demand in the same manner as promotional pricing does.