What pricing strategy tends to peak during a discount week, followed by a drop in demand?

The pricing strategy that typically peaks during a discount week and is characterized by a subsequent drop in demand is high-low pricing. This approach involves setting higher prices on products most of the time but offering significant discounts during promotional sales or discount weeks.

When the company employs high-low pricing, it attracts customers with the lure of these discounts, leading to a temporary surge in demand when the promotions are active. However, once the discount period is over, the prices return to their regular levels, often resulting in a decline in sales as customers may have been motivated primarily by the lower prices and may wait for the next discount event.

This strategy is effective for clearing out inventory or drawing in price-sensitive customers, but it also creates peaks and troughs in demand based on the timing of sales promotions. In contrast, other strategies like everyday low pricing maintain more consistent demand without sharp fluctuations, while dynamic pricing relies on real-time data to adjust prices, and penetration pricing focuses on establishing market share rather than creating peaks in demand through temporary discounts.