How do you determine optimal discounting and promotions to avoid margin erosion?

How do you determine optimal discounting and promotions to avoid margin erosion?

• A. Use aggressive discounting to boost short-term sales regardless of profitability.
• B. Consider impact on unit economics, cross-sell effects, customer lifetime value, price image, and post-promotion demand; use test-and-control and calendarize promotions.
• C. Run promotions every week to maintain momentum.
• D. Never test promotions; roll out consistently.

Answer: (B)