Strategy question

How would you determine when to run a price promotion?

Practice this question out loud. An AI interviewer asks it, follows up like a real interviewer would, and scores your answer. Type or speak.

What this question tests

Tests pricing and promotions strategy, weighing when a discount actually grows the business versus just eroding margin.

Clarify the goal: is the promotion meant to clear excess inventory, acquire new customers, or defend against a competitor's move.
List valid triggers: seasonal demand dips, slow-moving inventory buildup, a competitor's price cut, or a strategic push into a new customer segment.
Check the guardrail: promotion should only run if incremental margin from new volume outweighs the discount given to customers who would have bought anyway.
Propose a targeted promotion, like a first-purchase discount for new customers or a clearance discount for aging SKUs, instead of a blanket storewide sale.
Define success as incremental units sold and new-customer acquisition rate, not just total revenue during the promo window.

Names concrete triggers, inventory clearance, competitive response, new segment push, instead of a vague general answer.
Explicitly separates incremental sales from cannibalized full-price sales, the core margin risk of any promotion.
Prefers targeted promotions over blanket discounts to protect margin on customers who would buy anyway.

Running a promotion without checking whether it just discounts sales that would have happened anyway.
Treating all promotions as equally good regardless of the underlying business goal.

How would you measure the true incremental lift from a promotion versus pull-forward demand?
How would you decide the discount depth?