We all know that nothing in the world can be produced without a cost. But customers are very interested in purchasing products at discount and are crazy about free offers. Business men who know the psychology of buyers are using different discount and free offers options to attract customers. They will add the complete cost of all products including free gifts and will earn good margin also. Buyers are very happy to receive discount and some free stuff.
Why shop owners are not offering discount on gold and diamond products? Why shares are not selling at discount in stock exchanges? Why buildings and vehicles are not selling at discount? In fact prices of these items are increasing and people know the standard product. So there is no option or sellers to give discount or free items.
Free offer and discount offers are just like Indian government policy for increasing prices. If they want to increase 25% price they will increase 30% and when agitation start it will be reduced to 25%. People are very happy about the decrease and will forget about the increase.
We had some interesting experiences. Few weeks back, due to clerical mistake of our computer operation the price of a laptop costing Rs. 52,500/- was uploaded as Rs. 34,000/-. We have received many queries for that product. But nobody was ready to purchase that product at the listed price, even though most of them have better understanding of that product. All most all customers demanded more discount; but they were aware that even the manufacturer is not able to sell this product at this cost. Sometimes we feel that business is all about discount and free offers.
Another interesting thing in online marketing is customers will see the offers and call to our sales department. The first question they ask will be "how much is the discount". They will not even enquire about the product description. Sometimes we ask them to ask at least any question about the product also.
Another interesting story is when one customer came to purchase a computer; the price he offered was even less that of the price of a processor. People think that computer is the cheapest product available in the market and one can purchase it at any cost.
Many shop owners know the psychology of the customers and they will make the product according to the price offer of the customers. Customers will get the discount demanded by them. If it is a computer product you can surely expect used components in place of your new one.
Discount and free offers is the most useful marketing tool being used by many shop keepers. They may argue that their offers are genuine. But how can somebody give a product free of cost when we cannot produce anything without a cost. In fact product which we bought in a discounted price may be of outdated or with inferior quality.
Another interesting marketing method is to print the price of ordinary product at par with branded products and give 3 or 4 items free in the same price. E.g. if you visit readymade garments shops in Central Market, New Delhi, the printed price of shirts will be Rs. 2950/- or Rs. 3550/-. They will offer you 4 shirts free for purchase of one shirt. That means you will get 5 shirts for the cost of 1. You will definitely calculate the average price and realize that the average price is not so low. But on the other part the shop keeper made an impression that they are selling a costly product with a discount. Most of the customers will feel in their trap, because there are two benefits, one is you are getting a costly product at cheap rate and you are getting 4 more products at the cost of one.
But what is the fact? If you visit a genuine readymade garment shop and check the prices you will understand that even after getting discount and free items the average cost of product is 50% or 100% more than the same quality product in the market.
So beware of discount and free offers. If you want to purchase genuine and quality product, forget about discount and free stuff.