IGCSE Travel and Tourism Practice Exam

What marketing tactic involves reducing prices for unsold items to attract customers?

1. Variable pricing

2. Loss leader pricing

3. Discount pricing

4. Market skimming pricing

The correct answer is: Discount pricing

The correct answer is discount pricing, which is a tactic employed by businesses to stimulate sales of unsold items by offering them at a lower price. This approach is particularly effective in attracting customers who may be hesitant to purchase at full price. By reducing prices, the goal is to increase the volume of sales, clear out inventory, and make products more appealing to a broader consumer base. Discount pricing can take many forms, such as seasonal sales, clearance sales, or promotional discounts, all aimed at driving traffic to stores or websites and ultimately boosting sales. This strategy is widely used in various industries, from retail to travel, where businesses seek to move inventory or fill unused capacity in a timely manner. In the context of travel and tourism, discount pricing might be seen through reduced rates on hotel rooms or flight tickets close to the departure date when demand is lower. The other options represent different pricing strategies that serve different purposes. Variable pricing adapts prices based on demand, loss leader pricing involves selling at or below cost to attract customers, and market skimming pricing involves charging high prices initially before gradually lowering them. Each of these strategies has its distinct operational goals, focusing on market positioning, customer perceptions, or maximizing profit margins, rather than primarily clearing unsold items.