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Deep discounting is a powerful strategy that transcends mere promotional gimmicks, fundamentally reshaping consumer behavior and competitive landscapes. At its core, deep discounting involves selling products at significantly lower prices than usual to stimulate demand, increase sales volumes, and undercut competitors. This technique not only attracts more customers but also encourages them to buy in larger quantities.

By lowering the price point, Dmart not only increases the likelihood of customers purchasing more packets than usual but also positions itself as a more attractive shopping destination compared to its rivals. This results in significantly higher sales volumes.

The real magic of deep discounting becomes apparent when considering the economics behind bulk purchasing. While the local Kirana store sells 100 packets a day at Rs. 14 each, Dmart, with its lower price, can sell 1,000 packets. Despite the lower margin, the sheer volume of sales at Dmart leads to higher overall profits compared to the Kirana store. Moreover, Dmart's ability to move larger quantities typically grants it stronger negotiating power with suppliers, enabling it to secure even lower purchase prices and further increase its margins.

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