Why Pricing strategy (discounts, coupons) in LLD? - Purpose & Use Cases

The Big Idea

What if your pricing could adapt instantly to every customer without mistakes or delays?

The Scenario

Imagine running a small online store where you want to offer discounts and coupons to attract customers. You try to manage all discount rules and coupon codes manually using spreadsheets and emails.

The Problem

This manual method is slow and confusing. You often forget to update discounts, apply wrong prices, or miss expired coupons. Customers get frustrated when discounts don't work, and you lose sales and trust.

The Solution

A pricing strategy system automates discounts and coupons. It applies rules correctly and instantly during checkout. It tracks usage, expiration, and combinations without errors, making pricing flexible and reliable.

Before vs After

✗ Before

if coupon == 'SAVE10' and not expired:
    price = price - 10

✓ After

price = pricingEngine.applyDiscounts(cart, userCoupons)

What It Enables

It enables seamless, error-free pricing adjustments that boost sales and customer satisfaction effortlessly.

Real Life Example

Think of Amazon offering seasonal discounts and personalized coupons automatically at checkout, without customers needing to enter codes manually or worry about rules.

Key Takeaways

Manual discount handling is error-prone and slow.

Automated pricing strategy systems apply rules accurately and quickly.

This leads to better customer experience and increased revenue.

Practice

1. What is the primary purpose of implementing discounts and coupons in a pricing strategy?

easy

A. To reduce product quality

B. To increase the base price of products

C. To make the checkout process slower

D. To attract more customers and increase sales volume

Solution

1. Step 1: Understand the role of discounts and coupons

   Discounts and coupons are marketing tools used to lower prices temporarily.

2. Step 2: Identify the business goal

   Lower prices attract more customers, which can increase sales volume and customer loyalty.

3. Final Answer:

   To attract more customers and increase sales volume -> Option D

4. Quick Check:

   Discounts and coupons = attract customers [OK]

Hint: Discounts attract customers by lowering prices [OK]

Common Mistakes:

• Thinking discounts increase prices
• Confusing discounts with product quality
• Assuming coupons slow checkout

2. Which of the following is the correct way to represent a discount of 20% in a pricing system?

easy

A. discount = 20

B. discount = 2

C. discount = 0.2

D. discount = 200

Solution

1. Step 1: Understand percentage representation in code

   Percentages are usually represented as decimals for calculations, so 20% is 0.2.

2. Step 2: Check each option

   discount = 0.2 uses 0.2 which is correct; others are incorrect as they represent wrong values.

3. Final Answer:

   discount = 0.2 -> Option C

4. Quick Check:

   20% = 0.2 decimal [OK]

Hint: Use decimal for percentage (20% = 0.2) [OK]

Common Mistakes:

• Using whole number 20 instead of decimal
• Confusing 2 or 200 as percentage
• Not converting percentage to decimal

3. Consider this code snippet for applying a coupon discount:

price = 100
coupon_discount = 15  # fixed amount
final_price = price - coupon_discount
print(final_price)

What will be the output?

medium

A. 85

B. 15

C. 100

D. 115

Solution

1. Step 1: Understand the variables

   Price is 100, coupon_discount is 15 fixed amount.

2. Step 2: Calculate final price

   final_price = 100 - 15 = 85.

3. Final Answer:

   85 -> Option A

4. Quick Check:

   100 - 15 = 85 [OK]

Hint: Subtract fixed coupon value from price [OK]

Common Mistakes:

• Confusing discount as percentage
• Adding instead of subtracting discount
• Printing coupon_discount instead of final price

4. In the following code, what is the error that prevents correct discount application?

price = 200
discount = 20  # intended as 20%
final_price = price - discount
print(final_price)

medium

A. Price should be multiplied by discount directly

B. Discount should be converted to decimal before calculation

C. Discount should be added to price

D. No error, code is correct

Solution

1. Step 1: Identify discount representation

   Discount is 20 but intended as 20%, so it should be 0.2 in decimal.

2. Step 2: Correct calculation method

   final_price should be price - (price * discount_decimal), not price - discount integer.

3. Final Answer:

   Discount should be converted to decimal before calculation -> Option B

4. Quick Check:

   20% = 0.2 decimal needed [OK]

Hint: Convert percentage to decimal before subtracting [OK]

Common Mistakes:

• Subtracting integer discount directly
• Adding discount instead of subtracting
• Ignoring percentage to decimal conversion

5. You are designing a system that applies multiple discounts: a 10% seasonal discount and a $5 coupon. If the original price is $50, what is the correct final price after applying both discounts sequentially?

hard

A. $40.5

B. $45

C. $40

D. $42

Solution

1. Step 1: Apply the $5 coupon discount first

   $50 - $5 = $45.

2. Step 2: Apply the 10% seasonal discount

   $45 * 0.9 = $40.5.

3. Step 3: Sequential discounts

   Coupon before percentage discount yields $40.5.

4. Final Answer:

   $40.5 -> Option A

5. Quick Check:

   Coupon then percentage = 40.5 [OK]

Hint: Order of discounts affects final price [OK]

Common Mistakes:

• Applying discounts in wrong order
• Adding discounts instead of subtracting
• Ignoring percentage vs fixed discount difference