Price discounts as a goods promotion factor in Latvian retail trade

Abstract

Retail trade plays a significant role in the economy of any state. In business, a relationship between the company and the consumer is formed and both sides have their own certain benefits they wish to acquire from this relationship. For the company the main goals are to increase the turnover and gain profit, however, for the consumer aims may vary. In order to attain their goals, being the increased turnover and incoming profit, the companies can use different tools to stimulate the consumer's choice of the product. Sales promotion is exactly what ensures the opportunity for the retailer to attract customers and motivates that particular choice of the purchase, what furthermore ensures competitive advantages over other competitors. The globalization of the market also affects the retailing companies more and more and, therefore, pushes them to find new solutions to ensure their competitiveness and development. To identify the factors that guarantee the competitiveness, the authors have established the research of price discounts as a tool for sales promotion and its effect upon the activity of the retail companies as their research focus. Furthermore, the authors will research the form of sales promotion-theoretical basis of usage of price discounts as a part of marketing communication. Moreover, they will also analyse tendencies of development of retail trade in Latvia, as well as, clarify the consumers' attitudes towards the price discounts and the impact of them on making purchases at retail outlets in Latvia by conducting a consumer survey. This research will offer an understanding about the impact of commodity price rebates on consumer behaviour and point to the specificities of this process in retail to the retail companies. From the scientific point of view in this work the authors have collected the analysed theoretical aspects and have defined a united approach for building up the discount policy for retail businesses. As a result of the research, the authors conclude that by examining consumer attitudes towards the commodity price discounts and their use, companies can manage this process and perhaps it may become one of their tools for maintaining competitiveness.

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“…The topic is gaining in importance, especially in the context of retail. Linina, Bruksle, and Zvirgzdina [31] state that retail plays an important role in the state economy, as the relationship between the customer and the company is created within the business. Both parties find benefit from this relationship.…”