Most businesses sell their items, whether they are expensive automobiles or inexpensive services, based upon price.
[4] Consumers and business-to-business buyers alike may be easily enticed to buy based upon price.
Businesses know that offering the lowest price gives them a competitive advantage against other similar products the customer may be looking at.
[7] In the USA, Lowe's Home Improvement Warehouse is an example, as the company frequently states that it has the 'lowest' price stores, and that they will match their competitors.
It is an anti-competitive tactic that warns competitors not to attempt to steal market share by undercutting prices.
However, many big-box retailers work directly with manufacturers and sell products with unique model numbers.
[10] Even if all criteria are met, retailers grant price-matching requests on a case-by-case basis at the discretion of store employees.
[12] The effect on consumer redemption of coupons has mostly been positive as it attracts customers, and gives them interest in a particular brand.
The clothing retailer reported that their fourth quarter earnings fell 68%, in large part due to the heavy discounting.
[14] According to a Cornell University study, in the hotel business, discounting in attempt to gain more occupancy does more harm than good, lowering the RevPAR and creating less profit.
It is a common practice in real estate negotiations, car purchases, and at informal flea markets—while it is rarely used in retail settings such as at supermarkets, pharmacies, or brand-name clothing stores.
Refusal to provide an upfront price is very hostile to Internet customers who will purchase a good or service elsewhere.
As a result, the customer may lose respect for the business and realize the prices are too high to begin with.