What category does a markdown fall under in retail pricing?

A markdown is considered a form of promotional pricing because it involves temporarily reducing the price of a product to stimulate demand, clear inventory, or attract customers. Retailers use markdowns as a strategy to encourage purchases by making products seem more affordable or to increase foot traffic in stores.

Promotional pricing aims to enhance sales for a limited time, which aligns with the fundamental nature of markdowns as a tactic to drive immediate customer interest and create a sense of urgency. This approach can also lead to increased sales volume and can help in managing inventory levels effectively.

In contrast, standard pricing refers to the typical or normal price of products before any discounts are applied, while psychological pricing focuses on affecting customers' perceptions of pricing, like setting a price at $9.99 instead of $10. Promotional pricing, specifically markdowns, are distinct in that they apply bounded reductions in pricing for specific marketing objectives.